Renault-Nissan announce entry into low-cost car market in India

The battle is intensifying to develop, manufacture and sell low priced family cars to meet the burgeoning demand from consumers in emerging markets. Renault and Nissan announced today that they are entering into a joint venture with the India firm Bajaj Motors to jointly build a $2,500 car to compete with Tata Motors’ Nano mode. A new 400,000 capacity plant is being built in Chakan, Maharashtra and the aim is to bring the car to the market in 2011.

Jeffrey Sachs on Carbon Trading

Jeffrey Sachs features on “You ask the Questions” in today’s Independent. There are loads of interesting questions and answers - Sachs remains positive about China’s growth potential although he expects it to decelerate to around seven per cent in the years ahead. Here he is on a question about carbon trading .... good evaluation here for students preparing for a question on carbon trading versus carbon taxes versus other policy measures:

“There is a good case for putting a price on carbon emissions but it is more straightforward to do it as a tax rather than a system of tradable permits. It would be easier to tax carbon at source – coal, oil, and gas companies. Tradable permits or carbon taxes will not help develop low-emission technologies. We need to combine carbon pricing with initiatives to promote sustainable energy and farming technologies.”

Catch the remainder of his article here

Meeting the CO2 challenge

The Financial Times reports today that the UK government has ordered a review aimed at helping the UK motor industry tackle the twin challenges of low-cost competition and emerging low-carbon car technologies. This is directly relevant to students preparing for the OCR2888 A2 pre-release case study for June 2008 which focuses on the European automotive industry.

“Carmakers face slowing UK sales and pressure from government and the European Union to cut their vehicles’ carbon dioxide emissions. The industry’s push to develop lower-emission cars could change motor vehicle technology more significantly over the next five years than in the past 100, a research report last month by Deutsche Bank found.”

The rest of the article can be found here

Carbon prices head higher as emissions targets start to bite

There was some important information this week from over 10,000 power generators, steel, cement and aluminum manufacturers.  The effectiveness of carbon trading in creating the right incentives for power users to cut emissions depends on there being a scarcity of carbon permits reflected in a price high enough (and sufficiently predictable in the medium term) for investment in improved fuel efficiency to be commercially viable. A couple of years ago the market price of carbon collapsed when it became clear that the EU had been overly generous in handing out free gifts of carbon permits. The criticisms were valid and the long term future of the carbon trading scheme was called into question.

But the signs for the second phase of this innovative market mechanism look more promising.

OCR 2888: New SMMT report on CO2 emissions

The Society of Motor Manufacturers and Traders have released a new report on progress in cutting CO2 emissions from the motor vehicle industry. This looks like good background material for teachers and students preparing for the OCR 2888 paper, it focuses on how there has been a big shift in the new car market towards vehicles that come in under the 140g/km emissions level.

They claim that:

Average new car CO2 has fallen 13.1% since 1997, to 164.9 g/km
Total CO2 emissions from all cars in use has fallen by 4.8% since 1997
Almost a quarter of all new cars registered in 2007 were under 140g/km and over 10% were under 130g/km
There are record numbers of model ranges available to consumers, providing choice to meet a broad spectrum of consumer demands

Here is the link to download the report as a pdf file

The Big Question looks at carbon trading

Plenty of environmental economics in today’s edition of the Independent. The regular Big Question feature looks at the costs and benefits of carbon trading in the wake of the government’s support for fresh investment in coal fired power stations. Read The Big Question: What is carbon trading, and will it help in the battle against climate change?

Their editorial lays into Chancellor Alastair Darling for being ready to sacrifice environmental targets because of a faltering economy.

“Environmental levies need two key features. The first is that they be substantial enough to change behaviour. The second, and no less important, is that the proceeds are seen to be channelled into green schemes, or to provide tax breaks for those who make more environmentally friendly choice.”

Read: Make the polluters pay, and give the others a break

Finally there is a feature on how the effects of climate change tend to hit disproportionately the poorest communities around the world - the costs of adapting to climate change are enormous and some regions and communities are least able to cope.

More environmental news and features in the Independent are available here

Information failure on plastic bags?

The Times yesterday carried an article on a dispute among scientists about the true scale of the risks facing marine life from the deluge of plastic bags find their way into our seas and oceans. The article came at the end of a week when Marks and Spencer introduced a 5p per bag charge for food sales and Gordon Brown threatened government action unless the supermarkets take fresh steps to lower the volume of plastic bags used annually.

The London Pollution Charge

The London Congestion Charge is to tax more highly polluting vehicles more in a bid to reduce pollution. From October 2008, drivers of many sports cars, MPVs and 4x4s will pay £25 per day rather than the current level of £8. In addition, the charge will be abolished for the lowest polluting vehicles.

The Congestion Charge is generally regarded as a success, and environmental groups are applauding the new structured charge as an effective way of shifting drivers of ‘gas guzzlers’ into cleaner cars or onto public transport. The CC is a hypothecated tax in that the revenue it raises is, in theory, used to fund improvements to public transport.

What, exactly, does the CC aim to achieve? It is called a congestion charge, but the new structured tax appears to be more focused on reducing CO2 emissions. So should it really be called the Pollution Charge?