By Mahnum Khan
Pakistan’s Misguided Electric Vehicle Policy.
In an attempt to reduce greenhouse gas emissions in accordance with the Paris Climate Agreement, the Pakistan government recently approved an ambitious National Electric Vehicles Policy (NEVP). The policy aims for an almost complete replacement of Internal Combustion Engine Vehicles (ICEVs) with Electric Vehicles (EVs) in new car sales by 2040 [1]. At the same time, however, the Chinese government is building seven coal power plants in Pakistan to expand the nation’s power generation capacity, thereby allowing for this switch to EVs. In other words, to reduce emissions, Pakistan is planning to make more emissions and China is supplying the (fossil) fuel.
Challenges
Pakistan’s transition away from gas-powered vehicles through NEVP belies the nation’s continued focus and reliance on dirty power generation. For many decades, Pakistan has been mired in an acute energy crisis, which cost the nation up to $82 billion in lost GDP between 2007 and 2020 [2]. Given that this loss in GDP was greater than the country’s per capita growth, this had, and continues to have, major ramifications for economic production and employment. Moreover, with national demand for electricity far exceeding supply, power cuts (or “load shedding”) are a common phenomenon with urban households experiencing on average 6-8 hours of load shedding per day and rural households experiencing up to 16 hours [3]. Introducing EVs in the current climate is only going to add pressure to an already overburdened grid network, further exacerbating the energy crisis. Why, then, does the government think EVs are a good idea? This is where the Chinese-funded coal power plants come in.
The additional demand from the EV industry is expected to be covered by the seven power plants being constructed, with an eighth in the pipeline, under the China-Pakistan Economic Corridor (CPEC) project [4]. In countries with coal-intensive electricity generation, the benefits of EVs are smaller compared to countries that rely on renewable sources. A number of studies on the environmental impacts of EVs versus ICEVs have revealed that, when taking into account the entire life cycle of these vehicles, impacts associated with EVs can be much higher than conventional ones if energy for charging EVs is obtained through non-renewable sources [5]. Given that the purpose of the new policy is to reduce emissions, the government’s plan to achieve that by burning more coal to power the new EVs is misguided, to say the least. Not only will this result in more carbon emissions, it will also increase the country’s reliance on fossil fuels.
Photo credit: throttlebias.com/features/electric-car-memes/
Will replacing ICEVs with EVs reduce emissions enough to offset the increase from coal-burning? Probably not. A compensative reduction in emissions would require mass EV adoption, which is unlikely without an established charging network. Under the new EV policy, the Pakistani government is aiming for an EV to charging station ratio of 33 to one by 2025 [6]. To put things into perspective, the United States had an EV to charger ratio of 14 to one in 2020 [7], yet the main barrier to mass adoption in the US remains an absence of sufficient charging stations, with 66% of US households with an EV also owning a non-electric vehicle that is driven more [8]. A second, and perhaps bigger barrier to mass adoption, is the price point for EVs. Compared to an average Pakistani household’s annual per capita income of $587 USD, the only EV set to be launched in Pakistan is priced at $36,603 USD, making it practically inaccessible to the masses.
With EVs becoming the main focus of automotive policy, the government is considering tabling a subsidy scheme for small non-electric cars in order to make transportation more affordable for low income groups [9]. Combined with the high cost of EVs making them inaccessible to these income groups, such actions are likely to lead to even more socioeconomic disparity in the country.
Another major externality that has received relatively scant attention are the ethical issues around material sourcing for EV batteries. Much of the cobalt and lithium used to power these batteries comes from low-income countries, where labor standards are extremely lax. Miners are often forced to work in horrendous conditions for below minimum wage. In the Democratic Republic of Congo, for instance, 40,000 children work in unregulated “artisanal” cobalt mines using only hand tools to dig the metal from the earth [10]. Poor regulatory mechanisms, exploitation of the land, and unsafe mining practices also means that surrounding communities suffer severe consequences to their health and wellbeing. Not to mention the hazardous pollutants (tailings, slags, sulfur dioxide) released into the environment from the mining process [11].
Recommendations
If the aim is to meet the targets set under the Paris Climate Agreement, the Pakistan government would be better off implementing stricter emissions standards on existing ICEVs and Hybrid Electric Vehicles (HEV). Back in 2012, Pakistan adopted the European vehicle emission standards, Euro II, placing limits on exhaust emissions. This took place 12 years after Euro ll had been phased out globally, and while Europe is now preparing to introduce Euro VII, Pakistan continues to enforce the less impactful Euro II [12]. Consequently, there is little incentive for car manufacturers to invest in improving the fuel efficiency and environmental compatibility of their cars. This also applies to the production of EVs locally. Without the stringent Euro Vl and Vll regulations that are forcing European car manufacturers to move away from ICEVs and invest heavily in the EV industry instead, mass production, and therefore mass adoption, are unlikely in Pakistan. Relatedly, Pakistan also does not have a vehicle scrappage policy. This means that in addition to new cars being relatively less efficient, old, polluting vehicles continue to operate on the country’s already smog-ridden roads [13].
Stricter standards are also needed on the import of crude oil. Given that a majority of the population will continue to use ICEVs and HEVs because of their affordability and convenience with respect to refueling, the government should continue to invest in making these vehicles and the fuel they consume more environmentally sustainable.
With EVs being touted as the end all be all, focus is being shifted away from an important engine category that perhaps makes more sense within the Pakistani context: HEVs. HEVs having both a conventional ICE and electric motor(s), are less polluting than ICEVs. Since fossil fuels account for 70% of Pakistan’s total energy production, an EV is expected to emit roughly 120 grams of Carbon Dioxide (CO2) per kilometer compared to only 100 grams by a hybrid engine vehicle (see Figure 1) [14]. Given this, and HEVs’ lower price point, the short term goal should be to continue promoting HEV sales over ICEVs (which emit 200 grams of CO2) in addition to investing in R&D to make HEVs more sustainable.
Figure 1 – Estimated CO2 emissions of different vehicle categories.
Planning for the long-term:
Despite the obvious drawbacks of adopting EVs in the current climate, the future of sustainable transportation lies in the (clean energy powered) EV industry. Research has shown that there is significant potential for solar and wind power in the country. Yet, progress in this sector is being hampered by a lack of political will and misplaced priorities, as is evident from the recent tax hike of 7% on imported solar and wind equipment [15]. A more sensible strategy in the given landscape would be for Pakistan to shift the money currently being used to subsidize EVs towards lowering the cost of renewable energy production. Similarly, significant improvements are needed in the current grid infrastructure. Before incentivising EVs, the government should incentivize research on making the infrastructure strong enough to sustain mass EV adoption in the future.
Retired cars and car parts pose a serious threat to the environment if not recycled and disposed of properly. Yet, no such system exists at the moment. The government should, therefore, invest in building such a framework to ensure that the environmental benefits of a future switch to EVs are not offset by the pollution caused by the replaced cars. A policy focus is also needed on establishing an electronic waste management system for EV batteries, given their short life span (about 10-20 years) and high waste content [16].
In sum, Pakistan has some way to go before EVs become the dominant force on its roads. Let’s not try to run before we can walk.
References
- Why doesn’t Pakistan tap its solar power potential?; Pakistan Energy Situation – energypedia; 17% GST on 144 items to yield Rs360 billion
Mahnum Khan is a first-year student in the Master of Development Practice at UC Berkeley. She hails from Pakistan, and has a background in policy analysis, program management, and social media marketing. Mahnum is passionate about accelerating the energy transition and fighting climate change.
The views expressed in this article do not necessarily represent those of the Berkeley Public Policy Journal, the Goldman School of Public Policy, or UC Berkeley.
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