Managing the Mobile Dragon--Disruptive Systems Over Disruptive Technologies

Gridlock in Chongqing: Is this what they call progress?

While one can take heart that what seem liked unabated proliferation of SUVs just a few years ago is giving way to a range of smaller, more fuel efficient passenger vehicles (see last post on my review of the Beijing auto show), the fact remains that China is adding some 20% or more vehicles to its roads per year. In fact, Jack Perkowski of Asimco Technologies points out that the growth rate of vehicle manufacture in China since 2001 has been somewhere between 20 to 50% per year. I had the chance to listen to Jack speak to a group of Tsinghua MBA students last Friday. Jack and his business exploits in China with his founding of Asimco in the early 1990s is featured in Tim Clissold’s bestselling book Mr. China. Jack himself is currently on a speaking tour to promote his book, Managing the Dragon (sharing same name as his blog), which talks about all the lessons he’s learnt in building a successful business in China and has already received glowing reviews.

Although Jack is very cognizant of China’s ecological challenges, he and I do not see eye-to-eye on the ecological challenges that the auto industry poses to China. During to the Q&A session, I expressed the profound pessimism that I felt as I walked away from the Beijing auto show just a few hours earlier. Even though there were small cars and hybrid cars and electric cars, etc., its clear that at the end of the day, all of this is GREENWASHING. The same companies that tout their hybrid or electric cars also sell gas-guzzling SUVs, which have higher profit margins. Even if every single vehicle sold from tomorrow onwards was a hybrid/electric car, the fact would remain that China would be putting at least another 20% new vehicles on the road each year, and not to mention the continued build out of highways all across the country. Oil consumption would not cease its upward trend, and neither would oil imports, creating a threat to both the environment and energy security. I then asked Jack what he thought of the apparent contradiction between China’s promotion of the auto industry and the the imperative to tackle its environmental and climate problems.

While Jack agreed that solving its environmental crisis was a matter of survival for China, he is convinced that China had no alternative but to continue to develop its auto industry and transportation links in order to grow its economy. “The Chinese want the freedom of owning their cars, just like Americans” he would say. Taking as a given that nothing was going to stop the development of the transportation industry in China, he acknowledged that the key question was whether China would do things differently, and started to rattle a few technological solutions such as clean diesel and some others that I frankly tune out. He ended by saying:

Both India and China will have to face the same problem; that’s 1 billion pus 1.3 billion people, a total of 2.3 billion people working on this problem, someone will figure it out. I’m a little more optimistic.

I just don’t see any solution in Jack’s response. First, let’s be clear that the promotion of China’s auto industry in the way that the US has works at direct cross purposes with any climate policies that China adopts. Not only do cars gobble up oil, but the manufacture of cars is a highly inefficient and energy intensive process that consumes loads of increasingly expensive mined metal commodities. Couple that with the mega-tons of asphalt and concrete needed to build and maintain city roads and intercity highways (and please remember that the cement industry is one of the most carbon intensive there is), you start to appreciate the enormity of the auto industry’s multiplier carbon effects.

I recently read Chapter 19 (“Sustainable Urban Transport”) of the landmark book, The Natural Advantage of Nations, which delved into statistics available on the Millennium Cities Database for Sustainable Transport. The database is not the most current (dated 2001), but it did provide some interesting insights into the relationship between wealth and car use. At this point, I will just lay out a few selected quotes that struck me:

Less prosperous Asian cities already have a rate of car ownership relative to wealth that is virtually equal to cities in Australia/New Zealand. Chinese cities, despite an average GDP of only US$2400, have almost the same rate of car ownership per dollar of GDP as Western European cities (11 compared to 13) which have an average GDP per capita of US$32,000.

[A]mongst high-income cities there are considerable differences in car use that are not explained by differences in wealth. For example, US, WEU [Western Europe] and HIA [High-income Asia] countries have average GDPs per capita that are almost identical, yet their car use varies by around a factor of six.

When lower- and higher-income cities are included together in cross-city comparisons,a moderate positive association between urban transport energy use, greenhouse gas emissions and GDP is observed. Amongst higher-income cities, however, there is no statistically significant relationship between energy use, greenhouse gases and wealth despite a wide range of GDP per capita…Explanations for such differences in transport energy use (and by implication CO2 emissions) are strongly linked to the modal share between private [i.e. privately owned passenger cars], public [subways, bus systems] and non-motorized modes [bicycling, walking].

While these observations are not a slam dunk, it does suggest a strong possibility of decoupling car ownership or use from per capital GDP. We should challenge the dogmatic assumption that cars = wealth. To be fair, this was not Jack’s assertion. He was making a more basic point that the development of China’s economy is dependent on the development of transportation infrastructure in general. This is hard to argue against, but what it easy to debunk is the notion that car ownership is a necessary indicator of national/municipal wealth and that technological solutions, by themselves, will help make transportation systems more sustainable.

Disruptive Systems over Disruptive Technologies

Bus-Rapid-Transit system in Beijing

The fact is that “disruptive technologies” such as plug-in electric vehicles or utlra-clean biodiesel engines are not going to make a difference. Time and time again, I have heard the rhetoric technologists and their unfettered faith that technology will save the day. Such an approach misses the forest for the trees. As my good friend Ivan Urlaub, Executive Director of the North Carolina Sustainable Energy Association likes to say, we need to employ whole systems thinking and create “disruptive systems” to really get at the heart of our climate challenges. Aside from improving vehicular design through battery, engine and emissions improvements, a more macro view on urban form must be taken. Rather than lay out a comprehensive prescription, I present my thoughts in a series of questions:

• How thoughtfully are road networks laid out?
  
• How compact and dense are buildings and people situated, so as to reduce the need and/or distance (and influence the form, i.e. from driving to cycling or walking) required for traveling and mitigate the propensity for urban sprawl?
• What is the best way of encouraging a shift of private to public and/or non-motorized modes of transportation?
  
• Can Chinese cities increase public and non-motorized options while discouraging car ownership and use through a Singapore-style real-time electronic road pricing and car quota systems (through the auctioning of certificates of entitlements ).
  
• How can mass rapid transit systems (i.e. subways and light rails) be effectively financed and implemented, as we’ve seen in Hong Kong, Singapore, Shanghai and now Beijing?
• What about bus-rapid-transit systems, which offer dedicated road lanes to public buses, that the cities all across China are considering?
  
• How can pedestrianization be encouraged, as has been done in the prominent retail districts of WangFuJin in Beijing, Beijing Road in Guangzhou, and Mong Kok in Kowloon, Hong Kong?
  
• Looking beyond single-cities, how can different cities and counties work together to create integrated and seamless inter-municipality/province public transit systems?

I am clearly just scrapping the surface here in terms of what forms disruptive systems would take in terms of sustainable transportation. But my point is, all the hybrid and electric vehicle technologies in the world will hardly make a dent if car ownership and use continue to increase, if oil (or coal, in the case of electric cars) continues to be burnt, and if roads and highways continue to be built out with reckless abandon. We need disruptive sustainable transportation systems implemented in China and the rest of the developing world if we are to avoid the mistakes made by my country, the US.