The Hindu Business Line : Oil is the problem, not cars

Burning petrol in a car releases tailpipe pollution that harms the health of the child standing on the street corner but not the driver inside with his windows rolled up.

MR VIJAY V. VAITHEESWARAN, AUTHOR OF ‘POWER TO THE PEOPLE’.

The new small $2,500 people’s car from the Tatas, to be unveiled on January 10, has been stirring debates, be they about how the one-lakh car will change the auto world, or more practically, how it will inexorably add to the load on roads.

But there are also massive opportunities that are not to be lost sight of, says Mr Vijay V. Vaitheeswaran, author of Power to the People ( www.vivagroupindia.com ).

“Indian carmakers and energy companies can leapfrog ahead to a cleaner, smarter and more sustainable paradigm of growth,” he avers. “Cars do not have to be as dirty as the giant gas-guzzling behemoths commonly seen on American roads, for example.”

Interacting with Business Line, over the e-mail, Mr Vaitheeswaran concedes that some commentators despair when talking about energy and environment topics. “They observe that India and China are leading the world’s drive towards a planet of a billion cars, and worry about the implications for global warming and resource wars.”

However, as the co-author of Zoom: The global race to fuel the car of the future along with his Economist colleague Iain Carson, he argues that there is a countervailing force that must also be accounted for: the extraordinary ingenuity of Indians, Chinese and others in the fast-rising parts of the world.

“That means that India does not merely have to follow in the West’s dirtiest traditions: just as African villagers skipped land line telephony and went straight to mobile phones, so too can Asian energy users,” explains Mr Vaitheeswaran, with an analogy.

“As we enter a new Golden Age of Innovation in cars and energy, an age not seen since the days of Henry Ford, Edison and Tesla over a century ago, the keys to our energy and environmental future may be held by the innovators of Bangalore, Brasilia and Beijing as much as those in Berlin and Boston,” he declares, with a flourish.

Excerpts from the interview:

What is your take on the future of the automobile?

A growing chorus argues that cars are an environmental, geopolitical and economic nightmare waiting to happen. As the rapid rise of India and China pushes the world towards one of a billion automobiles soon, many blame the car: for environmental problems like smog and global warming; for geopolitical problems like wars in the Middle East; and for economic problems like $100 oil, and petroleum price shocks.

We argue that this view of the automobile gets it fundamentally wrong. Oil is the problem, not cars: every one of those concerns arises from burning petrol in a filthy and inefficient way, not from the automobile per se. Indeed, as the car of the future moves off petrol to alternative fuels, each of those three major concerns can be addressed.

In your opinion, will the American trend of buying smaller cars pick up in the years to come unlike the rather slow growth in preferences for smaller vehicles the last 30 years have seen?

The recent move towards smaller and more efficient vehicles in the US has been driven chiefly by the rise in oil prices. In the coming years, the unnerving volatility of petroleum prices will encourage drivers to buy smaller and, more importantly, more efficient and even alt-fuel vehicles.

Note: those are not necessarily the same thing! If you drive a hybrid Prius and I drive a big sport-utility vehicle (SUV), you might think you are greener. But if my SUV uses lightweight carbon fibre materials and either a flex-fuel engine using cellulosic ethanol or a stack of fuel cells using renewable hydrogen fuel, then I am the green one and you still keep the world addicted to oil.

We are at a cusp when the viability of alternative fuels is no longer an issue. However, the car-using public still hasn’t gotten over the reluctance to take the extra effort required for the switchover, as for example charging battery-powered vehicles overnight. Do you see this as a stumbling block in the widespread use of alternative fuels? When will it change?

I believe the critical breakthrough that will speed the arrival of alt-fuel vehicles is flexible-fuel technology. It is entirely reasonable for drivers to be reluctant to embrace cars using a strange new fuel that has poor refuelling infrastructure or cumbersome recharging.

But Brazil has shown the way forward. Over 80 per cent of new cars sold in Brazil today are perfectly capable of running on 100 per cent petrol or 100 per cent sugarcane ethanol, or any blend of the two — and this technology comes at no extra price to the consumer.

Indian car buyers have always been fuel-efficiency conscious, owing to the given that fuel prices are high. In that light, should private transport be disincentivised (through measures such as congestion charges, high tolls, etc.) as in the developed countries?

I am a big believer in externalities taxation, as are many market-minded but environmentally conscious people. Using cars rather than public transport or bicycles imposes burdens on society that are ‘external’ to the market price, i.e., not accounted for at the petrol pump. For example, burning petrol in a car releases tailpipe pollution that harms the health of the child standing on the street corner but not the driver inside with his windows rolled up.

The greenhouse gases released will harm the driver’s grandchildren’s generation, not so much the driver himself. This kind of ‘externality’ can be accounted for by carbon taxes or petrol taxes.

In addition, cars impose an extra burden on society because of the traffic snarls they cause, which choke the economy. Therefore, congestion charges and road pricing are excellent policies.

Bio: Mr Vijay V. Vaitheeswaran is an award-winning correspondent for The Economist. He joined the staff as the London-based Latin America Correspondent in 1992. He opened its first office in that region in Mexico City, and served as bureau chief until 1997. As the magazine’s Global Environment & Energy Correspondent, he covered the politics, economics, business and technology involved in those topics from 1998 to 2006. His portfolio now encompasses global health, pharmaceuticals and innovation.

Mr Vaitheeswaran is a term member of the Council on Foreign Relations, and teaches at NYU’s Stern Business School. He holds a degree in mechanical engineering from the Massachusetts Institute of Technology. He was born in Chennai and grew up in Cheshire, Connecticut. He now lives in New York.

D. MURALI

S. MURALIDHAR

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