Green Capitalism - Waves of the Future

Climate Change, Non-Renewable Resources, Energy, Contaminants, Carbon Pricing...

The 21st Century Environmental Revolution

12. The Fossil Fuel Sector

13. The Automobile Industry

14. Transportation

Transportation Alternatives: Hybrid, Electric, and Hydrogen Cars and Vehicles

Automobile Industry Changes, Smart Grids, and Urban Commuting...

Overview  Reviews

See also Book II of the Waves of the Future Series


12. The Fossil Fuel Sector

Energy will be explored in conjunction with the automobile industry. Both have a massive impact on the planet and are undergoing significant changes.

Oil and other fossil fuels are currently vital to just about all countries around the world. Some are dependent on them to fill their energy needs. Others—like many states in the Middle East—rely on them for income as net exporters.

Even within a country, world oil politics can have a tremendous impact. For example, most of the petroleum production in Canada currently comes from one part of the country, Alberta. Recent price hikes have meant billions of dollars in profits for that one province alone. A lot of that money came from the high prices charged for oil products to other Canadian provinces, some of which are significantly poorer than the already well-off Alberta.

The politics of fossil fuels are complex and far-reaching. What is for sure is that nobody is immune to them.

The Intermediate Phase
The oil industry is not about to disappear. Gasoline and diesel are still widely used around the world. As well, there is too much capital involved, and the lobbies are too big and too influential to be displaced. There are also many mega-projects currently under development around the world.

From an environmental perspective, it would be desirable to phase out fossil fuels as quickly as possible. However, because of the reasons mentioned above, most changes will occur gradually. An intermediate stage for the industry would probably lead to a stabilization in the use of fossil fuels in many countries as renewable energy alternatives are phased in. However, a global decrease in consumption might not occur given the continued growth of the world population and the emergence of massive markets like China and India.

What might change this is a stronger commitment to greenhouse gas reduction, but support for the idea continues to waver as the Copenhagen Summit in December 2009 showed. The only other hope at this point is the adoption of more powerful environmental strategies, especially those that would make it easier and more cost-effective for countries to reduce carbon emissions. The Green Economic Environment is one such approach.

The Market Approach to Energy
When the price of oil went up in the 1970s, many people and businesses bought into renewable energy technologies only to see their investment amount to nothing in the mid-1980s and 1990s when oil prices collapsed.

The GEE proposes to tax fossil fuels, such as petroleum and coal, for several purposes. Firstly, higher prices would reduce consumption, hence mitigate the production of greenhouse gases. Secondly, taxing fossil fuels at a level sufficiently high would make profitable the renewable energy industry and further the growth of a leading-edge sector of the economy.

The GEE would impose a variable levy on the price of a barrel of oil (either imported or locally produced) to raise it domestically to a set target, for example, $150.00. For a going market price of $120.00, the tax would add up to $30.00 and would be periodically readjusted to maintain the final price of oil at about $150.00 over time. This would create a predictable and stable environment that would not only foster the growth and development of alternative energy technologies but also prevent the crash of the new sector and the loss of precious green investment.

The GEE would be collected at the producer level. However, unlike other mineral levies, it would target domestic supplies and imports only. Exports would be exempt. This would raise the price of gasoline domestically and encourage conservation. But it would allow international market pricing mechanisms to continue to operate for petroleum, a resource vital to all countries, many of which are struggling economically.

Remember that the GEE is revenue neutral. As the fuel levy is collected, income and sales taxes would be reduced in proportion.

Benefits of a GEE Fossil Fuel Strategy
The GEE fossil fuel strategy would yield many benefits. The simple tax on petroleum would in one fell swoop conserve resources, reduce pollution and greenhouse gases, promote the development of the renewable energy sector, and decrease dependency on the Middle East. The total benefits are so large and far-reaching that we should immediately move ahead with the strategy. The GEE fossil fuel approach is not the path to the future: it is the eight-lane highway to it. Alone, it would achieve the goals of the Kyoto Accord and yield multiple environmental benefits.

Currently, environmental strategies comprise most often a panoply of regulations and incentives such as grants and tax breaks, all of which require huge bureaucracies and a lot of monitoring. A tax on oil charged at the producer level where there are very few players would be much more efficient. With it, the law of supply and demand would on its own promote the development of the renewable energy sector without government intervention. This GEE strategy for fossil fuels would be efficient and produce a green energy growth sector that is stable and more competitive.

Fossil fuel taxes are never popular, but remember who pays for the grants and tax breaks used to fund environmental and renewable energy initiatives. We do. One way or the other, we pay. These expenses would disappear under a GEE system. In addition, with the GEE, a lot of money that would otherwise be spent on monitoring and new bureaucracies would be saved. The end result would be a more competitive and stronger renewable energy sector, and one that is fine-tuned to market laws.

Cap-and-trade is not bad in itself, but it is a flexibility component tagged on to regulatory limits. It would provide indirect support to the renewable energy sector in the form of a market for emission credits. However, the trade aspect would not reduce carbon emissions and would be more complex and less cost-effective than the GEE, among other things.

Under the GEE, other fossil fuels would also be taxed to reduce their use and decrease greenhouse gas emissions and other pollutants. The levies would prevent a shift from petroleum to other non-renewable types of energy which could be equally, if not more, damaging to the environment. Lower taxation could be applied to cleaner or less carbon-intensive technologies if these ever come through. For example, natural gas—a cleaner burning and over 50% less carbon-intensive fuel—could face lower levies.

The GEE for Oil Producers
Taxing petroleum is likely to be a very sensitive issue for producing countries. They tend to be very protective of their massive oil wealth. The GEE would not result in their giving away the revenue from these resources.

Internationally, the tax would not be imposed on exports, meaning that none of the profits from them would be lost. For example, Alberta, Canada, would continue to sell its oil to the U.S. at international prices just as it does now. Nationally, regular prices would also remain in effect for producers. For example, Alberta would continue to sell its oil to Canadians as per normal supply and demand pricing although consumers themselves would pay a tax on top of it.

Local producers and importers of oil would remain on a level playing field as the levy would be collected from both. Since the GEE is revenue neutral, consumers would also come out even, paying lower income and retail taxes in compensation.

Specific producing regions would not be cheated through the new system either. For example, the levy that Albertans would pay to the federal government would not go to other provinces but would be received back as per the principle of revenue neutrality. The reverse would also be true; the levy that other provinces would pay the federal government would not go to Albertans but back to themselves.

What would change is that fossil fuel consumption would go down. It would undeniably be good for the environment everywhere, including producer regions. Oil not sold now would only be preserved for the future. As such, the wealth from producer regions would not be lost or given away but a source of income for them over a longer period of time.

A Biofuel Strategy
Ethanol-blended fuels are gaining in popularity. Increasingly, big North-American car manufacturers are producing flexible-fuel vehicles (FFVs) capable of running on both gasoline and ethanol blends up to 85% in concentration.

The new fuels are cleaner burning and more carbon efficient than pure gasoline and diesel. Furthermore, they can use existing distribution infrastructure. They are also good for local economies, benefiting the agricultural industry.

A New Set of Problems
Over the years, the U.S. and Canada have subsidized their agricultural industries by the hundreds of millions of dollars because, among other things, of the low market price of some commodities. In Eastern Canada, potato crops were often destroyed to prevent an oversupply and a price collapse. Now, they could be turned into ethanol.

A biofuel strategy would be very positive in those sectors, and things have already begun to change. In the fall of 2005, France announced that it would turn part of its overly plentiful wine production into ethanol. Canadian and American farmers are already doing better from the rising demand for biofuels.

The shift to renewable energy would reduce waste and losses and generally make agriculture much healthier financially. The new economic landscape would eliminate the need to subsidize it with taxpayers' money. It would also result in cleaner burning fuels, lower greenhouse gas emissions, and a reduced dependency on oil.

Unfortunately, not everything is rosy about biofuels. Food prices are rising partly as a result of crops and land being diverted to the production of ethanol. Italians made headlines in 2008 for complaining about a sharp rise in the price of pasta. The United Nations was talking of a potential food crisis in developing countries as people could no longer afford the skyrocketing price of rice following the high cost of oil in the summer of that year. World grain reserves were at historical lows. This was the result of not only the production of biofuels from edible crops but also rising fossil fuel prices and speculation.

The New Economic Reality
Biofuels do present a number of challenges. There is obviously the question of competition with food crops for arable land. But this does not have to occur. Alternative fuels can be generated from garbage, inedible plants grown in unused fields, and agricultural and industrial byproducts. Governments would therefore be able to intervene and exercise some control on the problem.

That would be important, especially in developing countries where many people can already barely afford food. The use of edible crops and good agricultural land for the production of biofuels can be regulated. It is a problem for which there is a solution.

A second issue is that of low net efficiency: it takes a lot of energy (often from gasoline and diesel) to produce biofuels. The issue should improve with research and technology. More importantly, the Green Economic Environment will make it possible for renewable energies to sort themselves out through markets. Because fossil fuels would be taxed, biofuel sources with low net efficiencies (i.e. requiring a lot of energy to be produced) would be less profitable and, as a result, attract less investment when not abandoned completely.

Note that electricity generation from hydro, wind, tidal, geothermal, and solar sources is not expected to affect the price of food. It does not compete with it for land. As such, not all new alternatives would cause problems. Electric cars have begun to hit the roads and are increasingly becoming a viable option for the future. That will decrease the demand for ethanol.

Biofuels and other sources of renewable energy will be an evolving landscape for some time. We should not panic as new problems and challenges emerge. Most will be solved.

New Land for Agriculture
Can new land be developed for the production of energy? Areas that are valuable to us for one reason or another (old-growth forests, wildlife habitats, etc.) should be protected, but could other types of land be converted and have a positive effect in terms of carbon reduction?

Large tracks of tropical forests are currently being cleared and planted with palm trees for the production of vegetal oil for biodiesel. Wetlands and grasslands are also being targeted for conversion to biofuel production. Unfortunately, these are already carbon sinks (i.e. areas that store significant amounts of carbon). As such, many argue that their clearing adds to global warming problems (Common, 2008, January 25).

The real question is, would we be making the same mistake as we did before by trying to create new land for agriculture: treating the symptoms rather than the disease? Clearing strategies would lead to the progressive denaturalization of the planet by the replacement of forests, wetlands, etc. with crop fields. Is this really the answer, or is it the problem?

What put us into this mess in the first place is unbridled consumption and population growth. A permanent solution to environmental problems will need to address these issues.

The new economics of the environment will have to be closely monitored and regulated. The science will evolve as we go along, and governments will find out what works and what does not. Efficiencies will likely improve over time and with economies of scale. The new green environment would certainly create new challenges and call for changes in laws and regulations.

In the long run, food prices will probably trend higher not because of any biofuel strategy but because the cost of oil will keep increasing. This is just the new reality of resource depletion, a reality that we have only begun to get a taste of. The GEE would slow down that process by promoting alternative sources of energy, hence preserve oil reserves and slow down the increase in price of the commodity. In addition, it would favor green goods and make them cheaper. And that includes food.

A Market-Based Biofuel Strategy
Could governments use regulations to force the addition of 10% ethanol or more to gasoline and promote a transition to renewable energy that way? Technically, yes. However, the move would cause problems in that the oil industry would have to purchase quite suddenly a large amount of ethanol for which there is little supply at the moment. This could result in high costs for the fuel and chaotic gasoline prices.

The best approach could include regulations, especially initially, but should be based primarily on market forces. A high and stable oil price would make ethanol blends and biodiesel more competitive, which would promote a natural switch to these cleaner and more environmental options without creating a supply crisis. The higher the target price, the more competitive biofuels would become. As such, governments would be able to implement a strategy progressively and control the speed of the process.

A market approach to bioenergy would ensure a gradual and smoother transition by allowing production to grow and respond to demand as opposed to using regulations and creating a supply crisis.

A biofuel strategy would create markets, sustain crop prices, and prevent the loss of investment and jobs. The growth of the industry would ensure a thriving agricultural sector for the future and help redistribute wealth regionally.

Hydrogen: Panacea or Illusion?
Hydrogen was the focus of much media attention a couple of years ago. This potential energy of the future captured the imagination of the public because its combustion or use in fuel cells to create electricity is essentially pollution free, water vapor being the only exhaust emission.

The main reason why hydrogen seems to have overtaken electricity in the race for clean power in transportation is that it provides a longer driving range. The best electrical storage technology (batteries) to date could satisfy urban commuting needs but remains impractical for longer range or heavy transportation.

There are a number of problems with hydrogen. Firstly, the gas is highly explosive. Safe storage technology is under development, but costs are high and may remain an issue. A second concern is that it is only an intermediate fuel. There is no source of hydrogen per se. There are no vast pools of it underground as there are for oil. It needs to be produced from or with other sources of energy, for example, coal, natural gas, etc. An obvious issue is that producing hydrogen from fossil fuels would release in the atmosphere large quantities of carbon dioxide, a greenhouse gas. As such, it would not be an alternative or a renewable energy.

Hydrogen can be produced with electricity through a process called electrolysis. However, each time you transform one energy into another, there is not only the cost of doing so but also a conversion loss. 100 units of electrical power could yield only 70 of another energy. As such, it is better to use it directly rather than convert it into something and then back into electricity in the fuel cell of a car. Different avenues are being explored for hydrogen production, but it is unclear at this point in time whether or not the gas will become the energy of the future.

A third concern is the massive amount of capital investment a conversion to hydrogen fuel would require. Simple, well understood, and cheap infrastructure already exists for electricity: knowledge, distribution lines, motors, etc. Such is not the case for hydrogen. Capital expenditure for a hydrogen society would be high and probably fairly risky as a lot of government planning would be involved. It would require a huge commitment and a leap of faith into a future that may never happen.

A fourth concern is the old chicken or egg problem. Which came first? Do you build a huge and expensive distribution system first, hoping that people will switch to hydrogen transportation? Or do you build cars for which there is yet no fuel distribution system?

Breakthroughs may change the odds for hydrogen, but currently there are still too many questions left unanswered. An educated guess at this time points to limited applications and niche markets.

A large-scale future for this fuel may come through if research leads to ways to convert the world's massive coal resources to the gas without carbon emissions or pollution. But again, even the large reserves of the fossil fuel will also eventually run out and its mining is a significant source of pollution. These are aspects that will also need to be considered for hydrogen.

Compared to the renewable energy sector, the fossil fuel industry is highly concentrated. Its immediate and long-term interests are not necessarily the same as those of society as a whole. Global warming problems preclude our continuing down the fossil fuel road. Diversifying into decentralized renewable energies would spread wealth around and benefit future generations.

Possible Breakthroughs for Electricity
For a few years now, EEStor (a U.S. company) has been working on a super battery, the EESU (Electrical Energy Storage Unit). The ultracapacitor would triple the current driving range of electric cars to about 300 miles (500 kilometers) and would recharge in minutes. This would surpass by a long shot lithium-ion batteries and the best technology available to date.

The battery would be nontoxic and apparently would not degrade over time from recharging like others on the market today. This would make it more conservational and less harmful to the environment. EEStor also reports that its self-discharge rate is very low and that it would perform well at low temperatures—unlike other batteries—making electric vehicle transportation much more viable in colder climates.

Zenn Motor Company, a Canadian manufacturer of electric vehicles, has heavily invested in the technology and the EEStor company. It is the only automobile manufacturer with a license for the use of the ultracapacitor in cars. It had originally planned to put out vehicles with EESU batteries at the end of 2009, but that schedule has been postponed. 2010 should be the do or die year for the EESU.

Skeptics believe that such a technological leap is impossible and warn about the dangers of meltdowns for the high-energy battery in car accidents. The technology has had successful initial testing in independent labs, but the final word is not out yet.

What is certain is that if the EESU does come through, it would change the whole picture for the transportation industry. Electric cars would then be able to replace gasoline vehicles without the usual inconveniences. This would likely kill the market for both the hydrogen and hybrid technology and would revolutionize transportation and our urban environments.

Several companies are looking into improving lithium batteries. One of a number of interesting developments is the use of lithium iron phosphate to speed up recharge time by up to 100 folds (MIT).

Others focus on increasing energy storage capacity, among them single crystals of lithium cobalt oxide (Toyota), silicon nanotube anodes (Stanford University, Hanyang University in Korea, LG Chem), lithium-air technology (IBM), and ionic (U.S. Department of Energy, Scottsdale) and lithium-sulphur batteries (NSERC-funded lab, University Of Waterloo, Canada). These new technologies claim to be able to increase energy storage capacity by three to ten times and would also change transportation as we know it.

We will see many other advances in the near future, some of which should turn out to be very significant. The automobile industry's recent surge in interest in alternative cars will result in a lot more money going towards battery research. However, the technology will also be crucial for the production of electricity at home, enabling the storage of intermittent energies (wind, solar, etc.) while increasing the supply for a rapidly growing electric transportation sector.

As some have already pointed out, millions of batteries in cars would provide a way to store large amounts of excess grid electricity. While it is possible for governments or power companies to orchestrate a system for this, the GEE would make it happen on its own through market forces.

Companies would simply have to offer cheaper rates at peak-production or low-consumption times—which they already do, excess energy currently being sold at lower rates to companies that require a lot of cheap electricity, for example, aluminum producers.

At times of excess production (e.g., on windy and sunny days) or low demand (for example, at night), special meters would simply turn on certain outlets and let home and car batteries be charged with low-cost energy. The cheaper electricity would simply be used at peak consumption times at home or for transportation. The rest could be fed back into the grid.

13. The Automobile Industry

A Blueprint for a Renewable Energy Future
Doing a detailed study of renewable energies is beyond the scope of this book. Rather, this section will try to identify major trends and highlight the issues and factors that may enable us to select policies for the short term and develop a blueprint for the energy and transportation sectors of the future.

Special attention will be paid to strategies that may benefit us on several counts as opposed to those furthering a single goal. Policies that may be able to bridge us to the medium-term will also be given preference as it makes no sense to develop plans for an infrastructure that will become obsolete in a decade. Decisions regarding a future for energy and transportation may ultimately be a matter of social choices as the various options open to us have different implications.

The Fuel-Cell Future
At the moment, there are two major trends in the future of transportation and energy. The first one, fuel cells, is still at an early stage of development and depends on new technologies. Hydrogen, which sparked the idea of clean transportation, would necessitate a huge investment in infrastructure and has fallen out of favor for this and other reasons. While the wealthier parts of the world may be able to afford such a strategy, most countries may find it simply too expensive or not the most cost-efficient option for them.

However, new ceramic fuel cells have significantly increased the efficiency of making electricity from natural gas (NG). The process would produce carbon dioxide but only about half as much as gasoline. NG is also much cleaner than other fossil fuels in terms of toxic contaminants such as sulfur dioxide and nitrous oxide. It is abundant, widely distributed around the world, and currently significantly cheaper than petroleum. As well, the economics of its efficiency in transportation are very promising (Blakeslee, T., 2009, September 23).

Natural gas is mostly methane, which can be produced or captured from biomass such as garbage, sewage, manure, crop residues, etc. Biogas, as it is called, is renewable and can use the existing infrastructure for NG distribution.

Biomass only degrades into methane under anaerobic fermentation, that is, without exposure to oxygen. A few apples under a tree will not produce biogas, but fermenting them in a sealed barrel would generate methane and be carbon neutral.

Landfill sites, sewage lagoons, manure tanks, and large piles of organic matter with limited oxygen penetration will naturally emit methane. As the latter is a greenhouse gas 20 times more potent than carbon dioxide, capturing it from biomass (i.e. not letting it be released into the atmosphere)—as opposed to producing it—would actually be carbon negative and have a reduction effect on global warming several times that of CO2 for an equal weight.

The combination of the wide availability, low costs, and shared infrastructure of NG and biogas as well as the renewability and potential for decreasing global warming pressures of the latter makes methane fuel cells a strong contender for the future of transportation. The technology already exists as small-scale 2 kW stand-alone power generation units but has yet to be adapted for use in cars. Methane fuel cells could be a very significant avenue for the future of transportation.

The Biofuel-Electricity Future
The biofuel-electricity future is a mix of both old and new technologies. Research will lead to exciting new developments and improve production techniques and hardware, but some of the science behind it is quite old. Vegetable oils—from which biodiesel can be derived—have been produced for a long time. Ethanol—drinking alcohol—is actually something that has been around for millenniums. Regular gasoline engines can burn 10% blends without modifications. Ethanol production is relatively simple and well understood and would be of prime benefit to the agricultural industry, at least in the U.S. and Canada.

The future of biofuels would entail low infrastructural spending as a lot of the technology is already here and can use existing distribution systems. Flexible-fuel vehicles increasingly represent a growing market in North America.

Brazil has already tested and proven the feasibility of a large-scale implementation of a biofuel strategy. The South American country already has millions of cars running on ethanol produced from local sugar cane crops—with very positive results for its economy.

A biofuel-electricity strategy would rely on ethanol and biodiesel for long-range transportation. Urban commuting would be based on electric vehicles. At the current state of technology, their shorter range (about 150 miles or 240 km in better models) does not make them a realistic option for long-distance traveling, but their lack of emissions makes them perfect and as clean as hydrogen for commuting to work.

An electricity-based urban transportation strategy would greatly decrease pollution and smog problems. It would also reduce the need for biofuels, whose production competes for agricultural land and causes increases in the price of food.

Looking for Common Ground
Future technological directions are paramount in considering options for long-term strategies. Optimally, current policy choices should support future options whatever they may be. An interim strategy should yield an infrastructure that would be able to support both a fuel-cell and a biofuel-electricity future.

Currently, world energy is derived from a variety of sources: oil, natural gas, coal, hydro, etc. This is for good reasons: needs are so massive that concentrating on only one kind would result in a supply shortage and skyrocketing prices. In addition, some types of energy are better suited for certain applications. As such, we will have to continue to get energy from several different sources in the future, and the more options are open to us, the better. To do this, we have to look for common ground between the fuel-cell and biofuel-electricity scenarios.

The Convertible Electric Vehicle
A fuel-cell car is actually an electric vehicle powered by a cell as opposed to a set of batteries. As such, both could share the same automobile architecture with the exception of the energy module. Their motors and other components could be exactly the same.

Designing and developing convertible electric vehicles may be the solution to the chicken or egg problem posed by a monolithic hydrogen strategy or to make other new technologies adopted earlier. Cars using either batteries or fuel cells as a source of energy (and convertible from one to the other by the replacement of the power module) could significantly speed up changes in the automobile industry and prevent investments from becoming obsolete in case one technology does not come through or falls out of favor. Convertibility would allow both manufacturers and consumers to switch from one to the other if the price of one type of energy rises significantly.

The Electrical Grid
The power grid would essentially be the only infrastructure needed to support electric vehicle transportation in urban settings. Batteries could be recharged at off-peak times (either at home or work). The grid is already a common infrastructure for electricity produced from a number of sources: hydro, coal, nuclear, etc.

The same network could support many of the future's renewable energies. In fact, it has already begun to happen. Governments are increasingly talking about new policies allowing the buy back of surplus electricity from households. If there is a significant shift in transportation from diesel and gasoline to electricity, the consumption of the latter will increase and drive prices up. New sources will be needed to meet the rising demand and keep costs down.

As such, electrical networks would become central in increasing supply. The grid is already providing support for many wind farms. With little additional investment, it could also support millions of micro-producers—for example, anyone purchasing a backyard wind turbine or solar panels with the intent of selling surplus energy into the grid. This has already started to happen in many countries. With increased demand, micro-producers would become an important source of renewable energy supply. Wind turbines and solar panels may just become a ubiquitous part of the landscape in the near future.

The grid would become central to not only increasing the supply and delivery of renewable energies but also supporting hydrogen without the need for massive infrastructural investment. The clean fuel could be produced at home from grid electricity in small electrolysis machines. At the moment, efficiencies are not great, but that may change in the future.

Direct home production would remove brokers and retailers from the equation, meaning that it could favorably compete with commercial ventures. It could also take advantage of off-peak rates, which would also serve to lower costs. Although hydrogen has fallen out of favor, the future might still hold some promises in this respect.

The electrical grid is a common infrastructure that is already in place and offers the possibility to significantly increase energy supplies and do so from renewable sources.

The Automobile Industry Under the GEE
The Green Economic Environment strategy proposed in this book would make most of the above happen on its own. It would promote renewable energies and provide stability for the sector, preventing the loss of investment—as has occurred when the price of oil dropped—and ensuring growth for the future.

Implementing a biofuel strategy would be relatively simple. All that is needed is for oil prices to be high enough to make renewable energies competitive (as discussed in the chapter on fossil fuels). The market would take care of much of the rest. It would make renewable energy and ethanol blends cheaper than gasoline and diesel, and ensure that fuels that are carbon intensive (e.g. ethanol produced from food crops) are more expensive and fall out of favor.

Carbon-negative technologies such as methane capture (but not production) could be the object of further promotion under the GEE because of its multi-fold impact on global warming from the removal of a potent greenhouse gas from the atmosphere. The strategy could be as gradual or as fast as we would want and essentially without quotas or regulations.

There are two main sectors in transportation. Each is qualitatively different in terms of needs, challenges, and markets. Long-range transportation, such as the trucking industry and holiday traveling, requires vehicles capable of going over long distances without refuelling. Electric vehicles are not currently appropriate for long-range and heavy freight and would not be suitable alternatives for these purposes at this point in time. As such, long-distance transportation would continue to be based on gasoline, diesel, and blends that include renewable fuels.

Urban commuting, the second main sector, is characterized by a multitude of smaller vehicles operating within densely populated areas. These play an important role in urban air pollution and smog problems. As such, everything should be done to make their emissions as clean and pollution free as possible. The sector would be an ideal candidate for electric or fuel-cell vehicles.

Transition in the Automobile Industry
Both the fuel-cell and the biofuel-electricity future would find a common ground in a convertible electric vehicle. Governments and industry could work together in order to design a basic frame for modular electric vehicles that could be powered by either batteries or fuel cells. These would initially be operated with the former, making them highly suitable for urban commuting. They would immediately provide cleaner urban environments and decrease fossil fuel consumption and greenhouse gas emissions.

When the fuel-cell technology comes through, the same modular vehicles could be used. These commuter cars would provide continued work in and a transition for the industry. This would mean a cleaner environment now, create work for the automobile industry, and provide a transition to both battery and fuel-cell technology.

Convertibility between electricity and fuel cells would allow people to switch easily between different types of energy according to supply and cost. This would support a better and more stable price environment, provide a flexible and diversified energy strategy for the future, and prevent our being held hostage to fossil fuels ever again.

The strategy would conserve an enormous amount of non-renewable resources as an entire generation of vehicles could be upgraded to better technology—as is likely to happen in a leading-edge sector of the economy—as opposed to being scrapped and added to landfills.

From a business point of view, convertibility would provide the egg to the chicken or egg problem of hydrogen. Ten years from now, battery-operated fuel-cell-compatible vehicles would already be in wide use. Infrastructural investment would be less risky and could be provided by the private sector as opposed to taxpayers and governments. Of course, that assumes that hydrogen is not dead already.

The immediate implementation of a convertible electric vehicle strategy for commuting would revolutionize the urban environment. Cities would quickly become much cleaner and quieter. Smog would be significantly reduced or may disappear altogether.

During the transition period, we would live in cities where single people would use mass transit or electric cars to commute to work and rent a hybrid vehicle for holidays. Couples with two gasoline automobiles might keep one to commute to work and use for family holidays. The second one would be replaced by an electric car.

Appropriate electrical grid policies would have to be implemented alongside an electric vehicle strategy in order to increase the supply of electricity and promote renewable sources of energy.

14. Transportation

This chapter will explore in more details future options relating to the automobile industry, a very important sector in the economy of many countries and one that will see plenty of changes.

In the short and the medium term, the GEE would increase the demand for more environmental and conservational generations of vehicles. In the long term, two trends would develop as a result of taxation on non-renewable resources.

Firstly, manufacturers would begin downsizing cars. Secondly, we would see part of the production shift to remanufacturing. Automobiles would be kept for longer periods of time, repaired, and upgraded as opposed to being bought new. Greater standardization and increased modularity of architectures would make it easier for parts to be replaced and reconditioned.

These two avenues of development would spell a significant decrease in resource depletion and major changes in our cities and living environments.

The Hybrid Question
What about hybrid vehicles, those having both a fuel engine and an electric motor? They are often viewed as being the solution to all problems in the automobile industry of the future. Undeniably, they are a step forward. However, they raise several issues.

Early models really disappointed in terms of improved fuel consumption. There has been much improvement in the technology since, but they may fall short of how far the transportation of the future needs to go. As well, hybrids use up more resources as they call for both a fuel engine and an electric motor and are heavier and more metal intensive as a result. This will probably limit their future.

Hybrids might retain a place as family or holiday car but do not go far enough in terms of fuel efficiency and resource conservation as far as urban commuting is concerned. We can do a lot better. In the long term, they might be able to carve themselves a share of the market if fuel efficiency increases significantly and competing technologies like the electric car do not see significant advances. Because there is so much in the pipeline in that respect at the moment, the odds are against the hybrid.

For the last 20 years, there have been many calls for better public transportation in order to mitigate environmental problems. While the approach can be effective in large cities, it is not the answer everywhere or to everything. The reality is that personal vehicles are here to stay and the automobile will remain pervasive in society. Public transit has to be improved, but more effective and conservational vehicles have to be designed for individual transportation.

Public Transportation
Mass transit is an important alternative that offers multiple benefits to society. It reduces traffic and its related problems, among them, noise and air pollution. Most larger cities today would grind to a halt without it. Public transportation reduces the demand for fossil fuels and promotes the conservation of non-renewable resources.

It prevents the use and purchase of millions of vehicles. Moreover, buses, trains, and subway cars are built to last much longer than regular automobiles. Because of their initial price tags, public transit vehicles also tend to be repaired and refurbished more extensively. That makes them highly conservational, several times more than current automobiles.

There are different mass transit models currently in effect in cities around the world. Some involve standard fares regardless of the distance traveled. Others are based on a concentric zoning system expanding away from city centers. Each has a certain amount of built-in inefficiency. For instance, the standard-fare system charges the same price to people traveling short distances as it does to those transiting much longer ones. The zone model addresses this by setting fares generally based on the distance traveled from city centers but does not reflect the intensity of travel routes.

In most cities, some transportation lines are heavily used while others are not. The buses, trains, or subway cars servicing the latter often run half empty or worse. That is not good. Despite the longer distances involved, major routes can be far more efficient than shorter ones because vehicles are in full use. They generate more revenue, and the actual cost per person—and to the environment—can be much lower than what passengers are actually charged.

A third model better reflects actual costs and is also more environmental. The zones of the second option are modified into a more organic artery system. The efficiency pattern of public transportation systems is brachial just like a tree, with trunks and major branches being highly efficient and smaller ones being less so. The artery model would make many long-distance routes cheaper and encourage people living in suburbs to leave their cars at home and reduce pollution.

Instead of being concentric, transit zones would extend like fingers from the central business district along main arteries. Fares would be cheaper on primary routes as these would be more extensively used. They would increase on secondary and tertiary lines.

Public transportation is a clear avenue for the future and deserves government support. It has many limitations, such as availability in suburbs and smaller towns, frequency of service, and practicality in certain situations. Government support to increase its use and benefits would mitigate many of its limitations; more people riding would mean more frequent service and route expansions.

As public transit will not satisfy all the transportation needs of the future, other ways of improving traffic, reducing pollution, and conserving resources have to be explored.

Cycling and Car Pooling
One of the most efficient means of transportation is the bicycle. It is heavily used in a number of Asian countries. Unfortunately, it is increasingly being replaced by scooters, motorcycles, and automobiles—with disastrous results for both the urban and natural environments.

Bicycles are not as popular in advanced countries although they provide a cheap, environment-friendly, and healthy alternative in terms of exercise. Many cities lack appropriate paths for them, making their use dangerous. The bicycle would do better under the GEE and would gain from being promoted by governments, be it in the form of paths, safety measures, or financial incentives.

Car pooling is also a very good and growing environmental option considering that most daily commutes are done by single persons in four-passenger cars.

Individual Transportation
Undeniably, the conservation of non-renewable resources would mean that automobiles would be kept longer and repaired more extensively. Many jobs would eventually shift from the new car industry to the parts and repair sector as well as pre-owned vehicle retailing. Refurbishing used automobiles and upgrading power modules would become a growth industry in the longer term.

Increasingly, cars would switch from being a disposable good with a seven or eight-year lifespan to something that is fixed, upgraded, and refurbished for two to three decades. New cars would cost more, but their resale value would also be higher.

Obviously, less metal would be used in designs. Vehicles would be smaller, lighter, and R&D would shift towards substitutes for metals: plastics, fiberglass, carbon fiber, composites, and biomaterials. The industry would focus on longer lasting and higher quality vehicles.

It would also move towards more easily reusable uniform chassis (where most of the metal in a car is located) and modular designs. Cars would look different on the outside but would be built on more similar basic architectures and with larger numbers of standard components to extend their lifespan and reusability.

Conservational and Environmental Cars
Although electric vehicles are not yet suitable for long-range transportation, the technology is essentially ready for the urban environment. Prototypes were built over 50 years ago. At this point in time, the best battery technology still leaves us wanting in terms of long-range transportation, but it is sufficient for urban and work commuting—which account for most of the driving that people do in a year. This does not represent a niche but the largest part of the market.

Since the electricity distribution infrastructure is already in place, cars would simply be recharged at home from a regular power outlet, often taking advantage of cheaper off-peak energy rates at night. That would change the economics of electricity.

Batteries are currently an issue in northern climates. A combination of better insulation and additional infrastructure could help mitigate the problem. In the Canadian Prairies where winters can be bitter, parking lots are supplied with electrical outlets so that cars can be plugged in even while people are at work. That could also be part of the solution. The additional infrastructure would represent some expense, but all components are mass-produced, can be quickly installed, and require little maintenance.

With the exception of batteries, electrical technology for cars is low cost because it is already well established and mass-produced. Maintenance for motors is also much less expensive than for combustion engines as there are no carburetors, radiators, oil changes, etc. That would also mean a lot less metal, hence a much lower initial price under the GEE system. As electric cars are not currently mass-produced, they are bound to be more expensive than they will be in the future. Their simpler and lighter technology should eventually make them significantly cheaper than their gasoline alternative.

Conservational and environmental cars could be designed and mass-produced relatively quickly if governments and industry cooperated to speed up the process. Cross-industry regulations could bring in more uniform chassis for longer lifespans, maximize the use of standard parts, and establish modularity to enhance repairability and allow for easy future fuel-cell conversion.

Government involvement could bring about a fair amount of synergy, leading to cooperation within industries, reducing financial risks, and decreasing the potential for the loss of investments. Both modularity and convertibility would also prevent a large amount of resources from being invested in obsolescence.

At the moment, the incentive to move to clean-powered cars is growing. The GEE would increase the demand for greener automobiles and usher in new generations of conservational (smaller, less metal intensive, built to last) and environmental (powered by clean and renewable energy) vehicles.

SPV Transportation: Size Does Matter
We have now progressed from gas guzzlers to convertible electric cars. The GEE would take us one step further to the single-passenger electric vehicle (SPV).

A four-passenger automobile is not needed to transport only one person. Significant amounts of resources and energy would be saved in designing one-passenger cars for work commutes. The benefits of one-seater vehicles are many: smaller automobiles are more maneuverable in congested traffic, easier to park, and generally less costly to drive. Single-passenger vehicles would cost less, use up less non-renewable resources in their manufacturing, and probably be more than twice as energy efficient. Lower weight would also extend their driving ranges.

There is a market for SPVs as well as price, conservational, environmental, and traffic incentives to minimize the size of cars. The new single-passenger vehicles would be not only shorter, allowing twice as many cars in a traffic lane, but also thinner, allowing two vehicles to drive side-by-side within it.

At moderate and high commuting speeds, SPVs would run staggered on different sides of four-passenger car lanes, allowing twice the number of vehicles within a given space as currently while respecting safe driving distances and easing pressures on circulation. As they slow down to approach intersections, stop signs, and red lights, or are caught in traffic jams—where their congestion-reduction ability would matter most—two SPVs should be able to run side-by-side within current lanes, a given space packing in as much as three or four times the number of vehicles it now does.

Single-passenger conservational and environmental cars would nearly quadruple the current traffic capacity of roads. This could eliminate most of the circulation problems that plague commuters on a daily basis in most large cities around the world. Of course, it assumes that we do not increase the total number of cars on the road. The GEE would not lead to that if appropriate tax rates are set. It would make cars generally more expensive, preventing their proliferation.

In fact, increasing the number of vehicles on the road would defeat the purpose of designing more conservational cars and result in even more non-renewable resources being consumed. It would also undermine environmental alternatives such as public transit, car pooling, and cycling.

On their own, SPVs would yield significant conservational and environmental benefits. Reducing the total number of vehicles on the planet could further increase environmental gains but is likely to be politically unpopular. In the short term, maintaining the status quo in terms of number of cars on the road is probably the best policy as it would allow governments to bring in the GEE with much less resistance on the part of the general public.

Fourth Wave urban environments will be drastically different. SPVs will mean clean (emission free), quiet (electric motors can hardly be heard), and, in many instances, traffic-jam free transportation in urban environments.

Technical Issues Relating to SPVs
There are a number of technical issues relating to SPV transportation. Car width would have to be restricted if two of them are to fit within a single lane. Vehicles would have to be properly designed to prevent rollovers upon turning. Architectures would have to include such things as swivel technology and low centers of gravity. Car speed may have to be limited. Alternatively, cities could choose to redraw some traffic lanes.

Trends for the Future
GEE-based transportation would call for much higher quality vehicles, ones that would be built to last for a long time and be more repairable and upgradable. Some parts are already fairly standard in today's cars—wheels, tires, batteries, mufflers, etc.—and components like brakes can be refurbished. The used car industry already exists. As such, the GEE would not call for extreme changes, but it would refocus the sector.

Although advances will continue to be made, we already have the technology necessary for electric vehicles. What is currently missing is a market. The green economic environment proposed here would create one.

How farfetched is all of this? Since the first edition of this book was published, many of the things discussed in it have started to happen. There are not many single-passenger vehicles on the market at this point in time. However, the electric automobile is in and sizes are decreasing. The industry is increasingly talking about biocars, vehicles having parts made with bioplastics and composites produced from soy, wheat, canola, or sugar cane.

Some companies have already developed plant-based polyurethane foam for seat cushions. Volvo claims to use renewable materials in dozens of its car parts. Mercedes S-Class vehicles are also going green, their bio-components tipping the scale at 43 kg per unit (Stauffer, 2008, February 15). SPVs are not here yet, but the automobile industry is definitely moving into greener fields.

In the second half of 2008, the auto sector saw tremendous changes. SUV sales dropped sharply. Major manufacturing companies shocked analysts by suddenly deciding to close several SUV manufacturing plants in the U.S. and Canada. Most automakers started talking about either developing or producing electric cars and more energy-efficient vehicles. Some have models already on the market.

The Ready Market for SPVs
There is an existing market for single-passenger electric cars: families that already have two vehicles. Two multi-passenger long-distance fossil fuel cars or Sport Utility Vehicles (SUVs) are not needed for simple urban commuting. The second one—if it is really needed—could easily be an SPV.

Currently, most cars making the daily work commute are four-passenger vehicles which convey only one person. This way of getting around is highly inefficient not only from a fuel perspective but also from a non-renewable resource point of view. Two-car families are a ready market for SPVs.

Other possible buyers for the one-seater electric vehicle are single people. Instead of purchasing a gasoline automobile, many of them would choose to buy a lower cost electric car for commuting to work or school, especially once the GEE makes vehicles pricier. They would rent a gasoline automobile or a hybrid once in a while as necessary.

Remember that the GEE would be revenue neutral, and that while cars would be more expensive, people would have more money to spend.

Safety for All
The minivan and SUV markets really took off on the safety issue: the bigger, the safer. However, the real question is, safer for whom? Although they offer more protection to their own drivers, they may not be better for the rest of us. Much bigger vehicles are more dangerous to both other drivers and pedestrians, at least in theory. Greater safety for all lies in decreasing the average size of vehicles, not the opposite.

A lack of safety does not stop pedestrians from crossing the streets or many people from riding bicycles and motorbikes—which do not provide much protection in collisions with cars. As such, a market for SPVs will develop regardless of the safety issue.

Smaller cars are often thought to be less safe for their own drivers. This is likely true to some extent. However, design is a large component of safety. Race cars are smaller, yet they provide higher protection than your average automobile. Properly engineered SPVs could offer a reasonable amount of protection. They would also provide much safer city streets for everybody.

Fast-Tracking SPV Transportation
SPV transportation would bring in vehicles about 65% smaller than current four-passenger cars. That would mean, in theory at least, a 65% conservation of non-renewable resources—metals—a 65% reduction in intermediate chemical use, and at least a doubling of fuel efficiency.

Much smaller, resource-efficient, and more repairable one-passenger vehicles would offer a number of cost savings. This should initially translate directly into greater affordability compared to regular cars, especially under the Green Economic Environment. Mass production would give SPV transportation an even stronger competitive edge and, in doing so, achieve massive conservational, environmental, and traffic benefits.

To speed up the development of the industry, governments and automobile manufacturers could get together to design a uniform chassis for a one-passenger car that would be mass-produced and used as common architecture for all manufacturers in their first models. Cooperation would lower development costs, enhance modularity and reusability of chassis, and enable mass production even for the first models.

Pooling R&D resources would force on the industry efficiencies that would be beneficial to both consumers and manufacturers. Standardization could also occur internationally. Modular designs would create a platform that is both conservational and environmental and do so on a massive scale, worldwide.

GEE taxation on non-renewable resources and stable high oil prices would be the basis that would provide for steady and predictable growth of not only the renewable energy sector but also SPV transportation. Appropriate government support and industry cooperation would eliminate the high development risks and insecure markets for car manufacturers.

The consumer would be happy, the industry would be happy, jobs in the new automobile sector would be preserved, resources would be saved from building much smaller vehicles, and energy efficiency would improve.

The demand for electricity—which has the potential for being produced cleanly—would increase. The markets for wind turbines, solar panels, and other renewable energy technologies would take off. Micro-producers would join in the frenzy, selling excess electricity back to the grid and improving their own country's balance sheet. The shift to electric vehicles in urban transportation would decrease the demand for biofuels and lower pressure on food prices, perhaps averting widespread instability and a world hunger crisis.

SPV transportation would mean massive gains in resource conservation and energy efficiency. Those would occur to a large extent in a market-friendly manner. As necessary, regulations and incentives—including tax breaks and rebates on insurance—could be used initially to enable a quick takeoff for SPV transportation.

International Markets
Developed Countries
A huge market for SPVs would be in developed countries where they could provide an alternative to many of the cars on the road today. Together with double-passenger vehicles based on the same conservational and environmental technology (DPVs), they could take over the bulk of the market for cars.

Developing Countries
Most countries around the world cannot afford a North American style of transportation. Neither can the planet. The question of transportation in the developing world is highly complex. On the one hand, a proliferation of cars around the globe would be disastrous. On the other, the automobile is of great appeal to the growing middle class of many countries.

A significant part of transportation in the developing world is based on smaller vehicles: gasoline rickshaws, motorcycles, scooters, etc. A switch from fossil-fuel to electricity-based transportation in their case would be a major improvement. Smog and greenhouse gas emissions would be significantly reduced. The demand for cleaner domestically-produced renewable energy would increase, creating jobs in the local economy.

A properly implemented GEE scheme would lead to gasoline rickshaws, motorcycles, and scooters being replaced by their electric equivalents. The technology already exists. Several companies currently make battery-powered scooters for the North American market. At present, electric rickshaws are being produced for many countries around the world. Electric vehicle transportation could already be a reality in many countries. What is missing is the incentive structure to make it happen.

Together, China and India host about one-third of the entire world population. Their economies are some of the fastest growing today. Each has a growing middle class. Under the most likely scenario, a significant increase in the number of cars in these countries is probably inevitable.

Single-passenger electric vehicles would represent a better option for developing countries. Their lower cost, lesser use of metals, easier maintenance, and smaller ongoing energy needs would provide both affordability and environmental benefits. In comparison, fuel cells would require more expensive technology and larger investments in infrastructure.

In March 2009, Tata Motors (India) released a new gasoline sedan, the Nano, which costs only about 100,000 rupees, or less than US$ 2,200. Although it has very good fuel efficiency and low emissions, many believe that it will spell disaster for the planet and the one-billion-people country because it makes gasoline automobiles affordable to so many people. The company is planning to expand to the European and U.S. markets within the next couple of years, offering a version of the Nano below US$ 7,000.

To cater to its growing middle class, China will either import India's cheap automobiles or follow suit with similar models. The country will likely also want to take advantage of international markets. This would also be disastrous for the planet. SPVs might be a better alternative and would have huge potential sales in both the developed and developing world.

The ready market for SPV transportation is actually really, really big internationally. One questions is, do we want a proliferation of gasoline vehicles in the developing world as it seeks better living standards, or do we want conservational and emission-free SPVs? A second one is, who will take advantage of this opportunity first: North America, Europe, Asia? A third one would be, once India and China start delivering cheap gasoline cars to world markets, what are the current leaders in the automobile sector (North America, Europe, Japan, etc.) going to produce and sell, if not the next generation of cars?


Tata Motors is expected to release the Indica EV, a four-passenger electric vehicle, in Europe in 2009 or early 2010! The North American auto industry might have already lost that battle, being behind developing countries in one of the biggest sector of growth for the future.

Copyright Waves of the Future, ©2010

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