The great car economy

What Lady Thatcher once described as the “great car economy” brings enormous benefi ts to individuals, but for economies as a whole there are signifi cant negative externalities. There are already too many cars in the western world; from the Los Angeles freeway to London’s M25 motorway to the centre of Rome the roads are clogged. Many families run two or even three cars. Growing wealth in countries such as India and China will lead to a dramatic surge in demand for cars. The un Environmental Programme estimates that there could be 200m new cars – twice the number currently on the road in the United States – if car ownership in India, Indonesia and China reaches the global average. Nowhere is this trend more evident than on the gridlocked roads of Beijing, where car fumes add to the permanent thick smog that hangs over the city. The switch from bicycles to cars as the main means of transport has been so rapid that it has forced one of the country’s largest cycle manufacturers, China Bicycle, into bankruptcy.

Aware of the detrimental environmental impact of moving to a carbased economy, the Chinese authorities are planning to limit the damage by introducing a range of quality standards for car engines that will even- tually be more exacting than those prevailing in the United States. But with car ownership set to double by 2020, this will do little to improve the underlying problem. Cars account for about one-third of China’s annual energy consumption, and as the number of cars doubles, so will the demand for energy to fuel them.

One technological innovation that has already reached the market is the hybrid car, which runs mainly on petrol but has an electric battery that is charged up while driving along and can then be used to drive an electric motor to power the vehicle in slow-moving traffic. Although much cleaner and more efficient than the traditional internal combustion engine, these cars still produce carbon emissions. Car manufacturers are being encouraged to start producing these hybrid cars for the Chinese market. However, in the long run, a more radical solution is needed if China and other catch-up economies are to become car-based economies. The answer is another technological innovation: the fuel cell.

The fuel cell is a battery powered by hydrogen which, when mixed with oxygen from the air, produces electricity. The only by-product is hot water, so from an environmental perspective it is the perfect fuel source. Fuel cells could also be used to heat houses and water. Eventually, every home may have its own energy station that will provide all a household’s energy needs, but most of the development work is focused on using the technology to power cars.

The most diffi cult problem with the fuel cell is how to store the hydrogen that powers the car. Storage in a high-pressure cylinder – the only proven method – means the “fuel tank” is so heavy and bulky that it can only be used in a bus. Several other lighter and cheaper approaches are being explored, but none has yet reached the market. Even when it does, the initial cost of a fuel-cell car is likely to be high, perhaps as high as the existing fuel-cell buses (around $1m each). However, Toyota, a Japanese car producer, estimates that by 2015 the price will have dropped to $50,000. General Motors is much more aggressive in its pricing target; it is aiming to cut the cost to $5,000 in just fi ve years, although it does not envisage starting mass production as early as this.

Even when the problems associated with storing and filling up cars with hydrogen are resolved, a hydrogen distribution system will need to be set up before cars powered purely by fuel cells can be sold commercially. A number of US states are beginning to develop hydrogen-filling networks. As with so many new ideas, California is leading the way.

Arnold Schwarzenegger, the state’s governor, promised in 2004 to have a “hydrogen highway” in operation by 2010. However, until the best means of storing the hydrogen on board has been identified, such initiatives may be premature. Read More : The great car economy

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