In China research has shown that energy produced from coal and used to power EVs creates more harmful pollutants than petrol cars. Fang Xinwu / AP
In China research has shown that energy produced from coal and used to power EVs creates more harmful pollutants than petrol cars. Fang Xinwu / AP

Pollution from EVs versus petrol cars kicks up an electrical storm



It's been a very tough week for environmentalists. First, so desperate is the US administration to promote "green" cars that it is considering raising the incentive to buy electric vehicles from the generous to the exorbitant. But even that may not be the environmental panacea everyone expects since a new study says that, in China at least, EVs are actually responsible for more health-affecting pollution than petrol-fuelled cars when their energy comes from fossil fuel-based electricity production. And, to cap it off, another research study claims that coal, not oil, is the real "greenhouse" killer.

Like I said, it was a bad week for environmentalists.

As for the American news, Barack Obama recently tabled for a budget for 2013 that bumped up the incentives for buying an electric car. Or, as they say in congressional legalese, any vehicle that "operates primarily on an alternative to petroleum" which, with apologies to those shilling natural gas, really means anything that plugs in. The Democrats' provisional budget - and, you can bet that Mitt Romney, Rick Santorum et al on the right are altering that to delusional - sees the maximum incentive for the purchase of EVs increased from US$7,500 (Dh27,550) to US$10,000.

Even the shallowest of car salesmen knows that you only put incentives on cars people don't want to buy and you only increase already substantial subsidies if the consuming public seems particularly reluctant. Indeed, 10 big ones is extremely strong medicine, usually reserved for hard-selling luxury saloons long past their due date. There's just no way to dress up $10,000 "on the hood" of a US$35,200 Nissan Leaf as anything other than desperate measures. And, unlike the current tax credit, which ends after the car maker sells the first 200,000 alternatively fuelled vehicles, the proposed increase has no such limits, the credit diminishing after 2016, presumably after meeting Obama's ambitious target of "putting one million advanced technology vehicles on the road by 2015". Of course, with fewer than 18,000 Chevrolet Volts and Nissan Leafs sold in the USA last year (and barely 26,000 worldwide, albeit in limited markets), it's little wonder the administration is a tad nervous. A sceptic might even go so far as to postulate that Americans seem a little reluctant to embrace this electrified future.

There's worse news. The University of Tennessee study on Chinese EVs recently concluded that the vehicles might emit more pollution than petrol-powered cars and even, get this, diesel buses. Its conclusion is that, because three-quarters of Chinese electric power is coal-fuelled, an EV operating in China is actually more harmful than a conventional automobile. The study was conducted in 34 cities across the country and measured everything from dust and metals to the acids produced in the coal-fired electricity production process.

Of course, any such hiccup has enormous repercussions, as China has committed extensive resources to increasing the use of electric vehicles and because it is the fastest-growing automotive market in the world. "An implicit assumption has been that air quality and health impacts are lower for electric vehicles than for conventional vehicles," noted Chris Cherry, assistant professor of civil and mechanical engineering at the University of Tennessee. "Our findings challenge that by comparing what is emitted by vehicle use to what people are actually exposed to. Prior studies have only examined environmental impacts by comparing emission factors or greenhouse gas emissions."

Of course, there are numerous other studies showing that, even in China, electric vehicles are cleaner and greener than the petrol-fuelled variety, and even Prof Cherry says his study "emphasizes that electric vehicles are attractive if they are powered by a clean energy source". Nonetheless, it points to a great failing in the great pollution debate, namely that the world's two greatest polluters - the one with the most cars and the other now selling more cars per year than any other country - both get the preponderance of their energy from the dirtiest of sources.

Indeed, according to another study - this one by one of the world's top climate scientists, Andrew Weaver, of the University of Victoria in British Columbia, Canada - coal is a far greater threat to our planet than burning other fossil fuels. Weaver estimates that burning all the commercially available oil in the world would raise the overall temperature by just 1°C but that firing all the coal still readily accessible in the world would increase the temperature by a disastrous 15°C. Yet, there is no public outrage against coal, no groundswell of protest against carbonised plant matter. Filmgoers are not flocking to documentaries lamenting the evils of coal-fed electrical plants.

For the record, I have nothing against a cleaner Earth. Indeed, I believe the automotive industry should and must curb its emissions footprint. What I vehemently oppose, however, is the hypocrisy that sees the piously environmental willing to push us back to the transportation industry's stone age - as in electric cars that can't get out of the city core because their owners fear their limited range will leave them stranded - simply because, everyday, they can see the object of their ire while coal-fired electric generators are far from their everyday commute. Out of sight, out of mind is not a justifiable defence for the puritanical rage of all those who see the automobile as the great evil while virtually ignoring an equal, or even greater, issue.

What scares me most about this devotion to anything electric is that if the consuming public doesn't get with this greener-than-thou programme - if even the prospect of ludicrously large financial incentives are not enough to place us on the righteous path - then perhaps these same great minds will decide, since consumers aren't smart enough to determine on their own, that the electric vehicle is our salvation, that it will be perfectly justifiable to force us to buy them. And the only thing left to buy in dealerships will be glorified electric golf carts.

NO OTHER LAND

Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal

Stars: Basel Adra, Yuval Abraham

Rating: 3.5/5

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Sri Lanka squad for tri-nation series

Angelo Mathews (c), Upul Tharanga, Danushka Gunathilaka, Kusal Mendis, Dinesh Chandimal, Kusal Janith Perera, Thisara Perera, Asela Gunaratne, Niroshan Dickwella, Suranga Lakmal, Nuwan Pradeep, Dushmantha Chameera, Shehan Madushanka, Akila Dananjaya, Lakshan Sandakan and Wanidu Hasaranga

The biog

Name: Salem Alkarbi

Age: 32

Favourite Al Wasl player: Alexandre Oliveira

First started supporting Al Wasl: 7

Biggest rival: Al Nasr

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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