Can Asia have more cars?

15 August, 2013


by Sonja Koesling
PTV Group

In 2050 the Earth will be home to nine billion people – most of whom will be Asian. What would happen if everyone in Asia reached the same standard of living as the west? Chandran Nair, entrepreneur and founder of the Global Institute For Tomorrow, gives his views on economic models and the need for strict limits on cars in Asia.

Compass: The world has been discussing the scarcity of resources, climate change and how to address these problems. What in your view is going wrong?

Nair: I would say that these problems share a root cause, which is the economic model that was developed by the West over the last two hundred years. This model was created in a particular context – one of Western exceptionalism, of promoting consumption and, most importantly, of underpriced resources. The reason it is so hard for us to palate paying for CO2 emissions today is because our business models do not budget for them, and because we would have to change course and give up some of the privileges we take for granted. The problem is that the Asia-Pacific region has come to believe that it can do the same things and have the same lifestyle as the West. But that just is not possible. If between five and six billion Asians attempt to live the American dream the world will be unable to cope!

Compass: When it comes to consumption you insist on quality instead of quantity. How can nations live up to this?

Nair: To begin with they shouldn’t be so naive as to believe that everything will work out fine thanks to technology, free markets, the financial industry and liberal democracy. That won’t happen and it’s a lie that needs to be rejected! In reality, the question we have to ask ourselves is: how do we organise ourselves in a century defined by the scarcity of resources? And, thinking above and beyond potential environmental disaster, if resource scarcity is a recipe for social unrest, how do we properly price resources and what rules do we put in place to prevent it? In my view, in a 21st century defined by a massive increase in the global population growth we need robust rules which seek to account for the full price of privileges such as private car ownership, even banning them in certain areas. We need a rule that says ‘car ownership is not a human right.’

Compass: Why this rule in particular?

Nair: If owning a car becomes part and parcel of everyday life in Asia, as it is in Europe or the USA, three billion vehicles would be on the road. That’s not workable. We all know this and need to start changing our mentality, rather than believing the fiction that there will be ‘green cars’ for all. Please don’t get me wrong. I’m not against car ownership because I’m a Luddite, but because I am in favour of each individual party paying the true costs of their actions. As it is, owning a car is a major form of consumption, but car owners don’t pay for the right to drive a car. They don’t pay for the infrastructure it requires either. And the automobile industry is also not called on to pay public levies – not for the steel that is used to build the body of the car or for the emissions they produce. So in dozens of ways car owners are getting a free ride by externalizing the true cost of their actions on the environment.

Compass: What does a successful traffic planning model for Asia entail?

Nair: Not continuing to unthinkingly build new roads but instead channeling investment into excellent public transport systems and make cities bicycle and pedestrian friendly. Our cities are enormous and we need models that are tailored specifically to them, rather than adopting wholesale models fashioned in small, wealthy Western cities.

Compass: And how does the situation with regional areas look?

Nair: First we should take a closer look at urbanisation. In reality many people would rather not reside in the large cities of Asia because they find life there unliveable. So why do we urbanise? We urbanise because conventional economics tells us it’s a good thing because it brings increased productivity etc. This has proven to be disingenuous. Instead of forcing urbanisation we should instead think about how we can create rural centres and improve the rural economy. We shouldn’t go backwards or try and turn everyone into a farmer, but farming will be critical for Asia’s future and we must not underestimate Asia’s potential for food production.

Compass: What role would these rural centres play?

Nair: I’m urging the development of an Asia where rural areas are linked with outstanding infrastructure. Investment in transport, irrigation, communication and storage would eliminate the appallingly high levels of waste in many rural areas and enable farmers to produce value-added foodstuffs which consumers pay a premium for. They would no longer be considered backwaters for poor and uneducated people but would be seen as places with a future and central to the national economy.

Compass: What kind of transport infrastructure should be prioritised when the network is expanded?

Nair: Currently our focus is on expanding roads and motorways because we want to replicate the American Dream. But our waterways are a source of potential that has yet to be tapped. We require a good mixture of road networks, railways, waterways and air transport, where at the same time the true price is set for each method of transport. Car ownership will be part of this but must remain more of a luxury. On the other hand, using public transport must be made attractive, as it is in Japan. In Japan people are happy to take the train to get to the city from the country. Why? Because Japan has one of the best railway networks in the world.

>> Read more in Chandran Nair’s book: “Consumptionomics. Asia’s Role in Reshaping Capitalism ans Saving the Planet”. Infinite Ideas Limited, Oxford, Great Britain