Electic cars are the best hope for Chinese air pollution

A few weeks ago, this blog looked at the relationship between electric vehicles and climate change reaching the conclusion that it depends largely on the source of electrical energy in a given country or region.

After commenting on the terrible air quality in China last week, this week’s installment of Doing Business on the Earth will discuss the tremendous potential of electric cars and light trucks to help alleviate smog in cities in China and around the world.

In actual fact, much of the impetus for the current generations of electric vehicles did not come from concern about climate change but from concerns over air pollution in California in general and Los Angeles in particular.

CARB and ZEVs

In 1990, The California Air Resources Board (CARB), an agency of the state of California, issues a mandate requiring that all large car companies sell a minimum percentage of zero emission vehicles (ZEVs) in the state. The original law set the target at 2% by 1998, 5% in 2001 and 10% in 2003 and its primary purpose was to sharply reduce air pollution or SMOG in California’s major cities and was part of comprehensive attack on air pollution in California.

Los Angeles, like many cities around the world such as Mexico D.F., Beijing, and others, have a particular set of geographic and climatological conditions which traps heavy polluted air in the city and combines vehicle exhaust with other forms of pollution to make a hazardous mix of ground level ozone, particulates and poisonous chemicals which have a direct and measurable impact on people and their health.

Electric vehicles can make a difference as long as they draw from power plants located far enough away from the city thus at least moving pollution beyond the mountains or at least outside of town.

Good news from LA

The good news is that according to its annual report, CAPCOA, the body that monitors air pollution in the State, air quality in California is the best its been since 1980 despite a 65% increase in population and a 137 % increase in driving!

According to Simon Mui, a scientist at the National Resources Defense Council, the 50,000 plug-in hybrid vehicles that will be sold in California this year will put the industry four times over CARB’s target for 2014.

Non Market Strategy?

In 1995, Stanford’s David Baron put forward the idea that companies should look at Issues such as air pollution, Interests, Institutions, and information to develop strategy in the same way they look at Mike Porter’s five forces for competitive analysis.

While California Governor Jerry Brown’s new  legislation will “support and encourage” rather than mandate zero emission vehicles, an interesting question is will the Chinese Government develop the same kind of comprehensive legislation as California?

What about China?

Does that mean that China will be the world’s first major market for electric vehicles in the coming years? Ingrid Akerlind, a Fellow at Third Way in Washington, is skeptical and points out that only 8,733 EV’s were sold in China in 2012.

After hiding form the smog in Shanghai a few weeks ago, I suspect that electrifying the vehicle fleet and moving its power plants farther from its cities might be the only realistic option for China!