Good News for EVs as U.S. Rejoins Paris Agreement

The United States official re-joined the Paris Agreement on February 19, 2021, signaling its renewed commitment to fighting climate change as part of a 200-nation effort to reduce greenhouse gas emissions. (Unsplash)

For 107 days, the United States was officially not a part of the Paris Agreement. The country left the global, voluntary climate change treaty toward the end of President Trump's term, and President Biden promised to return America to the deal. Biden signed an executive order moving the U.S. back into the agreement on his first day of office, but it took until today to make that pen stroke official.

America's re-entry into the accord matters to the automotive industry because it confirms that the U.S. government will be a cooperative player as the world shifts to electric vehicles. EVs can help reach the Paris Agreement's goals, and many EVs and plug-in hybrid electric vehicles (PHEVs) are already on sale today. But more of them are necessary, and soon.

Startup EV manufacturers are working furiously to get new electric cars, trucks, and SUVs on the road. Legacy automakers, seemingly handing the ball to Tesla to run the touchdown in years past, are catching up fast. But Volvo is one old-guard brand that wasted no time signing up to play a leading role in the auto industry's transformation to electric.

Today, Volvo offers PHEV versions of nearly its entire lineup, and the company is selling its first all-electric model, the XC40 Recharge SUV, with another debuting soon. Globally, Volvo expects it will have a million electrified cars on the road by 2025.

Volvo has also received a Platinum Medal rating from EcoVadis for its sustainability performance. In Europe, the automaker exceeded its 2020 carbon dioxide emissions targets so early that it could enter into a credit-pooling agreement with Ford to raise money for Volvo's new green technology projects. Volvo has even set up a Green City Zone in its hometown of Gothenburg, Sweden.

Rejoining the Paris Agreement is also a vital signpost, signifying to a broad audience that the world's future is green. This action should help tomorrow's car buyers as well. Last fall, YouGov released poll results showing half of all Americans support a governmental requirement that new vehicles must be electric by 2035. Younger people are more in favor of the change than Baby Boomers. Young people are also more likely to support efforts like those at asset management firm BlackRock, which is pushing for more disclosure of total greenhouse gas emissions from large companies.

Some consumers aren't buying EVs today because of worries about charging times and just the overall "hassle" of charging a vehicle. While these fears often prove unfounded once people live with an EV, the YouGov poll found other impediments to EV adoption are the perceived cost of charging at home and the lack of public charging stations almost everywhere except California.

The good news is that by rejoining the Paris Agreement, America can actively help solve these challenges.

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