Can India really afford cheap cars?

The news that GM India is poised to launch a 'two-lakh' car took me back to an incident in Lucknow in March
last year.

I had almost tripped over a scooter lying on its side in the dust, its front wheel still spinning. Moments before it had been carrying a family of four, plus chicken. Now, they were all on the ground, except the chicken which had run away.

You can't travel long on India's crowded roads without stumbling on a crash of some sort. This Lucknow family just lost a chicken. About 90,000 people lose their lives on the roads every year — and only 5% of them are in cars.

Hence, of course, the appeal of the one-lakh Nano, and of GM's slightly pricier competitor, promising as they do to put relatively safe motoring within reach of tens of millions of ordinary families.

Less appealing, of course, is the projected surge in pollution. If these cars sell in anything like the numbers their manufacturers hope, they will catapult India into the premier league of carbon emitters — casting doubt on the country's new-found commitment to tackle global warming.

Once the climate cost is factored in, there's no such thing as a cheap car. India is acutely vulnerable to climate chaos, and some of the very same people who'll benefit from the Nano will also lose out as wild weather wreaks havoc on the country's agriculture.

Does safer, smoother travel for middle-income Indian families have to come at the price of the planet? Do we always have to choose between protecting the environment and lifting people out of poverty? Not a bit of it. There's growing evidence that smart innovation can make life sweeter as well as more sustainable. Forward-looking think tanks like Malini Mehra's Centre for Social Markets, or Forum for the Future in the UK, argue that the best hope to win public support in the fight against climate change is to focus on this 'opportunity agenda'.

So, how could this apply to the Nano? Petrol-powered, it's a great social revolution, yes — but an electric Nano could be all of that and an environmental one, too. It would be ideally suited to the sort of short, urban hops that will constitute the vast majority of its use, so its limited range wouldn't be a problem. It could be recharged by solar power while its owner is at work or even out in the fields. Standing idle, the Nano's battery could trickle power into the grid — helping to smooth out the network's notorious instability.

And the innovation doesn't have to stop there. You might not be able to afford an electric Nano — but why own something that you don't use every day? So what about a state-sponsored Tata Zero Carbon Car Club, of the sort springing up across European neighbourhoods, giving people the benefits of using a vehicle when they need it, without the hassle and cost of owning one when they don't? It could help cut congestion, too: all the evidence suggests that car club members drive less than private car owners — because they don't feel they have to justify their hefty investment in their vehicle by using it in preference to the bus or metro.

But surely all this simply wouldn't be affordable? Well, not necessarily — not if the government grasped the nettle of subsidy reductions on the one hand, and carbon trading on the other.

The government spends billions of dollars a year on fuel subsidies — effectively making pollution cheap. If some of that went instead to developing 21st century clean transport — both personal and mass transit — it could bring dividends. After all, as the age of cheap 'easy' oil stutters to a close, investing heavily in fossil-fuelled infrastructure now is about as visionary as sinking your fortune into sailing ships 100 years or so back.

The dawn of a worldwide carbon market really can't come too soon for India. With its per capita emissions a fraction of those of the West — and even China — the country could expect to earn billions from selling carbon credits. That could be another source of revenue for cleantech R&D — and another source of opportunity for Indian business, as it fights to compete in a low-carbon global economy.

It all calls for fresh, not to say courageous, thinking — always a rarity in politics. But the Nano might help here, albeit in unintended ways. If a swarm of the one lakh miracles slows the pace of the capital's traffic from sluggish to stationary, it might convince even the most sceptical minister that there has, surely, to be a better way.
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