G Panicker Business Times 11 Dec 10;
IF YOU care about climate change, look beyond Cancun - to California - for real action. As politicians dance around a global agreement in the Mexican resort, two US carmakers are making a bid to start a new motor age.
Advanced vehicles may play a critical role in greening the world economy. Transport accounts for about 19 per cent of global energy use and 23 per cent of global energy-related CO2 emissions. Based on current trends, transport energy use and CO2 emissions from transport are projected to increase nearly 50 per cent by 2030 and more than 80 per cent by 2050.
A major transport study by the International Energy Agency (IEA), published in 2009, describes possible paths to 2050 under different scenarios. This study indicates that, if the transition to more efficient transport began now, real progress could be made towards reducing the growth of transport emissions over the next four decades. To significantly reduce CO2 emissions from transport, however, radical changes would be necessary.
The IEA has outlined in its Energy Technology Perspectives Blue Map scenario how technologies should be transformed by 2050 to lower emissions. Efficiency improvements with new types of vehicles and fuels can reduce transport emissions by 30 per cent by 2050. Vehicle numbers will exceed two billion by then.
Electric vehicles (EVs) and hybrids will account for 2.6 gigatonnes of CO2 equivalent emission reductions if they manage to claim 60 per cent of the market share by 2050, according to the Blue Map scenario. For that, key actions must begin now and it will require great political will, strong policies, investment and incentives.
Last year, the nations accepted the global warming limit of two degrees Celcius above the pre-industrial age. They have pledged emissions reduction, though the Copenhagen Accord was a non-binding political statement. The pledges, while encouraging, are inadequate to achieve the big aim.
A legally binding agreement was beyond reach at the Cancun meeting which ended yesterday. Delegates struggled to protect the Kyoto framework beyond 2012.
Amid such political foot dragging, outright emission reduction depends on initiatives on the ground, particularly because of the increasing fossil fuel use.
Oil consumption has risen faster than coal use between 1973 and 2008, with transport accounting for 61 per cent. During this period, emissions rose 90 per cent. The US Department of Energy sees transport's oil needs rising 45 per cent by 2025, whatever the price level.
In the hope of changing the gas guzzler culture, GM and Nissan are making a modest start this month, introducing their advanced cars in a few US states, including California. GM, which lost US$1 billion on its earlier EV1 bid, is spending US$750 million on its plug-in hybrid Volt and Nissan US$5 billion on its pure electric Leaf.
Carlos Ghosn, chief executive of the Nissan and Renault alliance, expects 10 per cent of global car sales to be electric by 2020. Independent studies place demand far below, with an advantage to plug-ins.
EVs and plug-ins will have to compete also with conventional cars improving their efficiency. The US plans a 25 per cent increase in fuel economy by 2016 to 15 km per litre. Other major countries have similar plans.
EVs and plug-ins have definite efficiency edge. The US Environmental Protection Agency has given the Leaf a rating equivalent to 42 km per litre. Its driving range is 117 km on a single charge. Chevrolet's Volt gets 25 km per litre on combined driving. Its rating is 149.7 km on battery and 59.5 km on petrol. A battery-charging petrol engine extends the Volt's range to 606 km.
The agency places the Leaf's annual operating cost at US$561, a third below a Toyota hybrid and two-thirds below a mid-size conventional car. The figures for the Volt are US$601 on battery and US$1,302 fully on petrol. An EV takes up to eight hours to recharge at home but 30 minutes at a limited number of charging stations.
GM will produce 10,000 cars in the first year and 45,000 in 2012. Nissan hopes to roll out half a million by 2013. The US government is aiming for a million electric cars by 2015 - a mark that China has set for 2020. Several other producers are also targeting a production of one million or more.
The IEA says that if these new vehicle sales reach five million in 10 years, the world will be positioned to attain its Blue Map target of one billion cars by 2050, saving 15 million barrels of oil per day. By then, EVs and plug-in hybrids will account for 50 per cent of global sales.
The higher price tag for EVs is softened by federal and state incentives - as much as US$12,500 in California. Yet, it is uncertain whether consumers will warm up to EVs' green credentials quickly.
Though batteries have come a long way since the 1990s and carry warranties for over 160,000 km, the driver may still worry about getting stranded.
The IEA expects battery cost per kilowatt hour to fall 50 per cent, slashing vehicle cost by as much as US$14,000. US Energy Secretary Steven Chu says that plug-ins' batteries will be competitive under five years.
Big companies have backed the project. GE, which is building the recharging infrastructure, has ordered 25,000 cars for delivery by 2015. These vehicles should also benefit from energy prices, forecast to double by 2035.
The EV, returning from the dawn of the automobile age a century ago, is still seen as an urban car. A European study finds decarbonisation of transport by 95 per cent necessary before emissions are cut by 80 per cent. But that would require emission-free cars using hydrogen as fuel.
The big transformation to an emission-free world demands substantial political will and trillions of dollars in financial investment. It needs a global consensus. But at Cancun, the central issue - a legally binding pact - has been deferred to next year; only agreements on secondary issues such as funding for poor countries to adapt to climate changes and setting up institutions for transfer of green technology and for forest protection were haggled over.
Critical issues demand ending the rift over targets, monitoring and status of the Kyoto Protocol after 2012.
When environment ministers arrive in South Africa next December, I expect they will still be squabbling over final numbers.
Perhaps by then, the world may have a better idea of whether the new cars will find a ready market.
# The writer was formerly with BT's foreign desk
