Sunday August 07, 2022

A false dichotomy

February 16, 2020

Who among us would not prefer to drive a Tesla-like car in Pakistan? This might come true very soon, if we are to take the first National Electric Vehicle Policy (NEPA) of Pakistan seriously. The policy, approved by federal government last year, promises radical electrification of Pakistan’s automobile industry in a frighteningly short period of time. Before going into further details, let us agree on one thing with the policymakers: if we want to keep the global temperature increase below 1.5 degrees, we need a lot of transformation and that too very quickly – like promised in NEPA.

The draft policy gives an impression of the order of magnitude of the transitions we would need to see if we are going to meet the aggressive climate targets we undertook as signatories to the Paris climate agreement’15. For that, they deserve credit. However, the plan to implement the policy leaves far too many open ends, comprises far too many contradictions, and near-impossible adoption rates in a country like Pakistan which experiences severe shortfall of energy every now and then.

This policy tells us what they would do: 30-50 percent of the new vehicle sale would be EVs by 2030; 90 percent by 2040; swift development of charging infrastructure; exceptionally low import duties on EV-related technologies; low financing interest rate for EV manufacturing; establishment of EV center; hassle-free EV registration process; and anything magical that can electrify our whole transportation system.

What the policy does not tell us is how they will achieve it. There are no plans. There has been no briefing after the approval of the policy; neither on the plan nor on progress ever since it got approved. If any of this sounds too ambitious and expected to make a drastic change in real vis-à-vis climate change, you need only look as far as the activities of the minister of state for climate change to realize that it likely won’t.

Let us talk about a few of the ambiguities associated with this policy. On multiple occasions, the draft refers to the economic benefits, without any quantitative analysis, in terms of producing new jobs by adaptation of green technologies. However, the policy does not discuss anything of any sort about the impact of the inevitable old job losses as consequence of technology shift. It will for sure help in mitigating the climate concerns but what is the plan for the economic and social threats the lay-offs possess? No particular answers yet.

Furthermore, how would working class families be able to purchase EVs when the lowest price for the current EV in world is above Rs2.5 million. Most governments are offering subsidies to encourage new buyers to opt for EV over fossil fuel vehicles (FFVs), but we are left to wonder if the government of Pakistan is in any position to afford giving further subsidies? And that too on luxuries like EVs? If the answer is no, which of course it is, then the commercialization of EVs in our country would not be as easy as discussed in the policy.

Among many other problems, one is not taking the major stakeholders like the Pakistan Automotive Manufacturers Association (PAMA), the Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) etc in confidence until the start of the 2020 when Advisor to Prime Minister Abdul Razzak Dawood chaired a meeting to listen their concerns.

Next, NEPA does not care about the already implemented Automotive Development Policy (2016-21) in this regard. There are also almost ten different ministries and boards that will work together towards the implementation of this project. This huge collaboration rather terrifies me that this policy will only turn out to be a ping-pong ball among collaborators where everyone will work on it; and thus, no one will work on it.

Another thing that leaves this policy cloaked in mystery is the lack of discussion about the bottleneck technology towards the commercialization of EVs around the globe – that is: the energy storage system. And, supposing the government were able to do all what is said above, you’re going to need a massive increase in energy generation, storage and dispatchable electricity sources. Otherwise, it’s going to be impossible to power many parts of the country with renewable energy because the sun does not shine 24/7 and the wind does not blow at the same rate everywhere.

So, we will need to take the storage part seriously which is not discussed at all in the policy draft. Although NEPA points to the establishment of a centre for EVs, nobody knows what would be the mandate of that centre – production of EV units, R&D, Li-battery research or something else? I fear our EV industry, like others, would also be at the mercy of China finally. Some reports that came out recently claimed that a number of Chinese companies have already started collaborations with different government and private companies on the subject. Another thing mentioned in the policy is to start with the charging infrastructure with Islamabad and Lahore in the beginning. I hope that does not translate into any further regional disparity.

NEPA offers targets to accelerate the phase-out of FFVs up to 90 percent by 2040, which are at least technically feasible, but they don’t offer the comprehensive plan horsepower to get there. Many of the goals they do identify could be popular, but they simply won’t generate the levels of economic benefits and carbon emission reductions promised. It seems as though this policy presents a false dichotomy: if we want mitigate climate change entirely, we have to electrify the automobile industry. No, that is not enough.

The only favourable thing that could give hope for the success of this policy to some extent is the credibility and keen involvement of Adviser to the Prime Minister Malik Amin Aslam who was also the architect of Khyber Pakhtunkhwa’s Billion Tree Project. He has demonstrated that he can deliver what he commits. But how powerfully and far he can run the race is the question. Also, it is really unpredictable how the next government carries the policy Malik Amin Aslam and his allies drafted. Will it be thrown away like this government did to ADP 2016-21. The current government certainly cannot bind future government(s), but climate change mitigation requires long-term investments so it becomes critical that the next government shows the same level of commitment.

The writer is a PhD candidate at University of Calgary with research interests in energy transition and climate change.