Gal Luft discusses the Tata Nano, India’s $2,000 micro-car, and what it portends. He notes:
Even though the Nano emits 25 percent less carbon dioxide per mile than a standard automobile, environmentalists are terrified by the micro-car. Nobel Prize winner Rajendra Pachauri, head of the Intergovernmental Panel on Climate Change, said he was “having nightmares” about the Nano and its potential to pollute.
But these concerns could be alleviated should the tens of millions of new micro-cars that will roll onto the planet’s roads be able to run on something other than gasoline. There are many approaches here, from compressed air to batteries. All of them would increase the car’s price and weight, making it less attractive to the poor. The only exception is the flex-fuel technology, which would allow micro-cars to run on any combination of gasoline and alcohol, as do most cars in Brazil today.
Flex-fuel technology would bump the price of the Nano by less than $100. But it would allow Indians to grow their fuel rather than import it. Nearly half of India’s land is arable, and it is already the world’s second largest producer of sugar cane—by far the best crop for ethanol production.
Micro-cars with flex-fuel engines fed by domestically grown fuel would reduce poor countries’ trade deficits, strengthen their energy security, create agricultural jobs and even reduce carbon dioxide emissions.
Micro-cars can be engines of prosperity in more ways then one. But only if they offer the world’s poor more than the false hope of indefinite cheap gasoline.