November 14, 2010

life in general & financial markets: (part 2) india's obsession with diesel cars

In my July 28 '10 post I had written about the ugly obsession of India's affluent car & SUV owners, automobile manufacturers and government policy makers with the use of diesel.

I share below the latest editorial written by Centre for Science and Environment on diesel cars and SUVs that throws additional light on the matter.

Here goes:

Press Release
CSE supports JairamRamesh on restraints on SUVs and dieselisation of personal cars

New Delhi, November 13, 2010: Centre for Science and Environment (CSE) commends minister of state for environment Jairam Ramesh for slamming the expanding fleet of SUVs and the rampant use of cheap and toxic diesel in personal cars putting public health at risk.

Says Anumita Roychoudhury, head of CSE’s air pollution and urban mobility team, “CSE has been campaigning against these fuel-guzzling polluters for many years, and we fully support Mr Ramesh’s views as reported in national media. While the expanding SUV fleet with large engines undermine the fuel savings in the transport sector, the plume of emissions from India’s diesel cars make the urban air more toxic.”

Reign in the big bully and the guzzler
• Big cars and SUVs are a threat to energy security, climate and public health: CSE is concerned that the Indian market, so far dominated by small cars, is steadily shifting towards the mid to large car segments. This segment already represents about 36 per cent of the total car sales in India. This trend is supported by on-road surveys carried out by RITES and the Delhi Transport Department that show that nearly 30 per cent of the cars on Delhi’s roads are already mid-size and large cars. With large cars that are much less fuel-efficient than smaller cars, the total fleet’s fuel economy will worsen.
• The costs of bigger vehicles can be enormous: This is evident from global studies such as that of the International Council on Clean transportation that show fuel economy of a car fleet declines for a given increase in large vehicle market. A 10 per cent increase in large vehicle sales can roughly result in 2 per cent deterioration in fleet fuel economy. This means roughly, an additional 17,500 barrels of oil will be consumed annually by those 10 per cent large vehicle sales. Why should the Indian government let the country and the climate bear this unacceptable cost on account of luxury consumption, asks Roychoudhury.
• Cost to the consumer: Consumers actually end up spending more on fuel during the life time of large cars. Moreover, considerable numbers of large cars are run mainly on diesel, which undermines air quality. SUVs particularly are captive users of diesel. This defeats the government’s objective of improving vehicle fuel economy to protect India’s energy security and meet its climate goals. Dirty air increases the medical bills of the consumer.
• Use of cheap diesel in big cars and SUVs leads to more oil guzzling in the rebound: Studies in Europe have shown how use of cheaper diesel used in bigger vehicles and SUVs that are also used for long distance driving undermines the efficiency gains of improved vehicle technology. The actual fuel consumption goes up. Other governments are increasing taxes on bigger cars, especially SUVs – most exemplary is the case of China – to minimise the energy and pollution impacts of these vehicles.

Diesel: the toxic trap
The current official policies are encouraging massive dieselisation of the car fleet when ‘clean’ diesel (with 10 ppm of sulphur used with advanced after-treatment systems) is not available in the country. The market share of diesel cars is already over 30 per cent of new sales and is expected to be 50 per cent of new car sales soon.

CSE challenges the industry folklore that the current Bharat Stage III and IV diesel car fleet meets public health benchmark:
• Bharat Stage III and IV emissions standards legally allow diesel cars to emit several times more NOx and PM than petrol cars. Auto industry claims that they are adopting common rail injection systems for diesel cars and therefore they are clean. But our emissions standards are not fuel neutral as they differentiate between petrol and diesel vehicles. The difference is evident in the emissions factors developed by the Automotive Research Association of India for Bharat Stage III diesel cars that are sold across the country. These diesel cars emit 7.5 times more toxic particulate matter than comparable petrol cars (see graphs on our website). This means, one diesel car is equal to adding 7.5 petrol cars to the car fleet in terms of PM emissions and three petrol cars in terms of NOx emissions. Total air toxics from a diesel car that are very harmful and carcinogenic are seven times higher than that from petrol cars.

• Diesel and petrol cars meeting the same level of emission norms have different toxicity levels that determine the cancer causing potential. Data from Europe shows that the diesel cars’ toxicity becomes comparable with petrol only when they are fuelled with near zero sulphur fuel and are fitted with particulate traps. The International Agency for Research of Cancer (IARC), WHO, United States Environmental Protection Agency, etc have all classified diesel emissions as carcinogenic. The European Commission has calculated the difference in lifetime pollution costs of Euro IV-compliant diesel car and petrol car -- and it shows a major difference. The total pollution cost of a Euro IV diesel car is 1,195 Euros vis a vis 846 Euros for a petrol car. This nullifies the marginal greenhouse gas reduction benefits of diesel car and costs higher to the society.

• Government is shouldering the burden of subsidy to the rich car owners: CSE had warned earlier that as the Union government earns much less from excise on a litre of diesel used by cars, as opposed to petrol; revenue losses per litre of diesel will be compounded with increase in diesel car sales. But diesel car owners recover their premium within a few years, given lower diesel prices. This perverse subsidy to the rich comes at an enormous cost to public health. In countries like Brazil, diesel cars are actively discouraged because of the policy to keep taxes lower on diesel. In Denmark, diesel cars are taxed higher to offset the lower prices of diesel fuel. In China, taxes do not differentiate between petrol and diesel.

• Even low carbon emissions and greater fuel efficiency advantages of diesel cars are shrouded in doubt. Diesel cars are popular for their greater fuel efficiency and lower heat-trapping carbon emissions. ARAI data shows Euro III Indian diesel cars emit 1.2 times less carbon dioxide compared to their petrol counterparts. But even this benefit is at risk of being negated as diesel fuel has more carbon content than petrol. If more diesel fuel is burnt, as is likely given its cheaper prices and rising number of cars and SUVs, the heat-trapping carbon emissions will increase. Moreover, even the carbon soot from diesel vehicles are now implicated for global warming.

• Diesel-related emissions are already very high in the air of Delhi and other cities. It is significant that the environment minister has raised the concern over use of cheap diesel in big cars and SUVs now when the air quality data from the Central Pollution Control Board shows that the average levels of tiny particulates, smaller than 2.5-micron size (PM2.5), that go deep inside lungs, have hit a dizzying height in Delhi. The WHO has said that there is no safe level for PM. Studies in the US show that even at very low concentrations and with an increase of only 10 microgram per cubic metre, PM2.5 is associated with significant increases in health risks like asthma, lung diseases, chronic bronchitis and heart damage. Long-term exposure can cause lung cancer. What’s worse, in Delhi, levels of nitrogen dioxides (NO2) are also spiraling adding to the problem of ozone. Both PM and NOx dominate diesel exhaust emissions.

It is time to act.
It is a myth that the diesel car technology that is available currently in India is clean and meets the public health objective. Immediate policy intervention is needed.

CSE proposes the following action plan:
• Discourage big cars and SUVs by linking taxation to the actual fuel consumption of the vehicles. More fuel a vehicle consumes, the more tax should it pay.
• Remove price incentive for diesel cars. Either equalise fuel taxes and prices or impose effectively high additional taxes on diesel cars to neutralize the current fuel price advantage that the cars enjoy.
• Introduce ‘clean’ diesel technology that runs on diesel fuel with sulphur content less than 10 ppm and is fitted with advanced emissions control devices like particulate traps. Otherwise, get off the diesel route.
• Fuel economy standards must not worsen the trade-off between fuel efficiency of diesel cars and their toxic emissions. Fuel economy standards currently in the making must have built-in safeguards against dieselization of car fleet.

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