The Context of Efficiency

Here's a nice example of the vital distinction between consumption and efficiency. If I told you that a company was about to introduce a new car model that was expected to average 56 miles per gallon, and that it was going to be so cheap that nearly anyone could afford one, that would sound like great news, wouldn't it? Perhaps it depends on the context in which that car is introduced, and our assumptions about what it will displace. The car in question is Tata Motors' eagerly-awaited "1-Lakh" car--referring to its 100,000 Rupees price equating to $2546 at yesterday's exchange rate--and the target market is millions of Indians who haven't been able to afford a car yet. Even at an expected efficiency of 56 mpg, though, the Nano, to give its proper name, will create incremental consumption of petroleum products and new greenhouse gases emissions.

At an initial 60,000 units per year, the Nano will hardly alter the global oil supply and demand balance overnight. If driven 5000 miles each, the entire first year's production would consume only 350 barrels per day of fuel, or about as much as 11,000 average American cars. Of course, we're talking about a potential market of tens of millions of such cars, and as today's Wall Street Journal reminds us, there are a number of carmakers and models competing for that market. Selling 50 million such cars here would increase our fleet average efficiency to 32 mpg and save over 800,000 barrels per day of gasoline and 120 million tons per year of CO2. Selling 50 million of them in India, however, could increase consumption by 300,000 barrels per day, while adding 42 million tons per year of CO2.

While efficiency is probably the single most powerful tool available to us in trying to bring global energy use and emissions under control, it doesn't tell the whole story. Consumption is what counts, and at least in the case of Tata's new model, every new car out the door adds to consumption, no matter how many miles per liter it gets, because at the entry level it's displacing bicycles, mass transit, and walking. That isn't the case in the US, where the market is mature and most new cars replace older cars. Here the fuel economy indicated on a new car's sticker is only one variable that will determine its ultimate consumption, along with the city/highway driving mix, total miles driven, and the owner's driving style and maintenance habits.

You might also expect a car powered by a 32-HP engine and weighing 40% less than Toyota's smallest US offering, the 36 mpg Yaris, to do even better than 56 mpg. Unfortunately, $2,500 won't buy much in the way of sophisticated engine efficiency upgrades, let alone pay for the kind of hybrid approach used in the Prius. In this light, the 100 mpg initial target that the MIT-led Vehicle Design Summit is working toward for an entry-level car for India looks pretty ambitious.

Value judgments about this sort of thing are complex. At the same time we recognize that the expansion of personal mobility in developing countries complicates the energy and environmental challenges we all face, we might also experience a vicarious thrill at the benefits it should bring, provided that Indians don't feel obligated to repeat every mistake we've made in the one hundred years (this October) since the first of 15 million Model Ts rolled off Mr. Ford's assembly line. Sharing the lessons we've learned about transportation may be every bit as important as the technology sharing that was a major theme at the Bali climate change conference last month.