Equity Must Underpin Energy Transition Policy, Rethinking India’s Approach to Clean Transportation
As the Government Finalises CAFE-3 Norms Amidst a Global Energy Crisis, a Former Planning Commission Member Argues for a More Nuanced, Equitable Approach
The 70 million citizens of India’s National Capital Region and its abutting districts frequently choke on air pollution. It is not just the visible, seasonal phenomenon caused by farmers burning stubble, but a year-round problem for which the transport sector is commonly cited as the highest contributor. The government is struggling to impose effective regulations to reduce overall emissions.
One contention is the equity of solutions: producers of smaller petrol vehicles are ranged against producers of larger electric vehicles. Another is the overall environmental impact of electric versus petrol vehicles. How the authorities view these contentions could be indicated in the Corporate Average Fuel Efficiency-3 (CAFE-3) norms, expected to be finalised soon. Additionally, the ongoing energy crisis due to the conflict in West Asia brings to the fore the urgent need to look inwards, at our own strengths and promote green alternatives such as solar, biofuels, and green hydrogen.
But as India charts its path toward cleaner transportation, a fundamental question must be asked: Are we pursuing policies that genuinely reduce overall resource consumption, or are we simply shifting the environmental burden elsewhere while enabling the wealthy to maintain their lifestyles with a green conscience?
The Full Lifecycle Challenge
The environmental impact of a product at its point of use is a small fraction of the overall environmental impact of the system that produces and services the product. Environmental scientist Vaclav Smil has computed the total consumption of non-renewable material and energy resources in modern transportation, food production, and other industrial systems. His analysis yields an uncomfortable truth: electric cars cannot be better than internal combustion engine cars until all the energy required to produce them and provide power to their batteries is produced from renewable sources.
Till the time the power source from which a car running in Delhi draws power is renewable, the use of EVs will continue to pollute the environment. It will merely transform the burden onto other locations, out of our sight. The coal-fired power plant in a distant state, the mining operations for lithium and cobalt in another country, the manufacturing emissions from the factory—all contribute to an environmental footprint that is simply displaced rather than eliminated.
This is not an argument against electric vehicles. It is an argument for honesty about what they can and cannot achieve, and for policies that address the full system rather than focusing narrowly on tailpipe emissions.
The Thermodynamic Reality
There is no escape from the universal law of conversion of material energy. All energy is derived from materials. The amount of energy that can be extracted from materials is limited by Einstein’s famous formula. This thermodynamic reality constrains all human activity, including our attempts to transition to cleaner energy sources.
The Earth is a complex system of materials and energy. The tapping of so-called renewable energies too alters the configuration of the Earth’s material structures with long-term consequences. Large dams flood vast areas and displace communities. Mining for minerals used in wind turbines, solar panels, and batteries scars landscapes and generates toxic waste. Nuclear power leaves behind waste that must be isolated for millennia.
Though immediately increasing the availability of low-cost energy, these large-scale solutions harm livelihood and lives in the long term. The only additional “new energy” comes from the Sun, and even capturing that energy requires material inputs with their own environmental footprints.
The climate crisis has been fuelled by the relentless drive to increase the productivity of economies and improve lifestyles by replacing the use of energy of humans at work and at home with energy extracted from the Earth’s resources. Wood fire was the first technological advance of humans over other animals. Coal was tapped next, a denser source of energy which required more technology but produced more energy. Then came the extraction of energy from hydrocarbon sources, with which the pace of industrialisation and economic growth accelerated.
These combined factors have led to the climate crisis and the search for renewable sources of energy. Even today’s Artificial Intelligence algorithms, which are expected to improve living standards everywhere, are supported by large data centres running on massive amounts of electricity.
The Consumption Disparity
The paradigm of economic growth in rich countries is not sustainable. Mankind’s global footprint—which is a measure of the pressure human activity exerts on the resources of the Earth—was 60 per cent of the planet’s capacity to renew itself in 1960. It has now reached 130 per cent. We are no longer living off the consumption account; we are eating into our natural capital.
The disparities in consumption are staggering. The United States’ footprint on the Earth’s resources is as heavy as 9 to 10 hectares per person. China’s is one-sixth of the US. And India’s is half of China’s. An Indian consumes one-twelfth of the Earth’s resources compared to an American.
As encouraging as this statistic is, further use of all possible options—be it CNG, hybrid, or smaller cars that reduce consumption of the Earth’s resources—should be encouraged. The goal must be to enable Indians to improve their living standards without replicating the unsustainable consumption patterns of the developed world.
The Equity Challenge
The United Nations’ Sustainable Development Goal 7 “aims to ensure universal access to modern, reliable, and sustainable energy by 2030.” Human beings are entitled to adequate and affordable clean energy. But herein lies a core problem of 21st century economics: Who will pay for the energy they must have if they cannot pay for it themselves?
Politics to promote clean transportation must keep two objectives in mind: reduction of non-renewable resource consumption overall, and equity in promotion of new technologies.
First, what is the system’s consumption of energy per kilometre of travel among heavier and lighter vehicles? A small, lightweight petrol car may consume less energy per kilometre over its full lifecycle than a heavy electric vehicle powered by coal-generated electricity. Policies that mandate EVs without considering this reality may perversely increase overall resource consumption.
Second, are the subsidies helping poorer people improve their standards of living with affordable, safe transportation, or are they merely enabling richer people to maintain their lifestyles and feel good about their environmental consciousness with green plates on their heavier vehicles?
When EV subsidies flow predominantly to purchasers of luxury vehicles, they represent a regressive transfer—from taxpayers, many of whom cannot afford cars at all, to the affluent. This is not just economically inefficient; it is morally questionable.
The International Context
Studies show that globally, all major automotive markets such as the US, China, Japan, Korea, and the EU offer regulatory protection to small cars under their emission policy frameworks due to their environmental and socioeconomic value. They recognise that small cars have a role to play in reducing overall emissions and providing affordable mobility.
In contrast, India’s linear, weight-based approach penalises lighter vehicles with disproportionately stringent CO2 targets. This creates a structural bias where heavier vehicles with higher emissions comply easily, while small cars with lower emissions fail. Lightweighting, a key decarbonisation strategy, is thus disincentivised.
This is policy incoherence. If the goal is to reduce emissions, policies should encourage the lightest, most efficient vehicles, not penalise them. If the goal is to promote EVs, policies should ensure that the electricity powering them is clean, not assume that EVs are inherently green regardless of the grid mix.
The Geopolitical Dimension
It will be interesting to watch how the ongoing wars, and the recent disruptions in rare earth supply from China or any other external exposure, shape automotive and emission regulations. The concentration of critical mineral supply chains in a few countries creates vulnerabilities that India cannot ignore.
An EV policy that creates new dependencies on imported lithium, cobalt, and rare earths may simply replace one form of energy insecurity with another. Diversifying supply chains, investing in domestic processing capabilities, and exploring alternative battery chemistries must be part of the strategy.
The Path Forward
The need of the hour is to provide the customer with multiple low-energy options, and not just mandate EVs, which remain out of reach for the average middle-class car buyer. This means:
Encouraging a range of technologies—small petrol cars, hybrids, CNG vehicles, biofuels, and EVs—each suited to different use cases and affordability levels.
Ensuring that subsidies are targeted to those who need them, not those who would buy EVs anyway. This may mean capping the price of vehicles eligible for subsidies, or linking subsidies to income levels.
Investing in public transportation, which remains the most energy-efficient way to move large numbers of people. An EV for every family is not a sustainable vision; efficient mass transit is.
Accelerating the transition to renewable electricity, so that EVs actually deliver on their promise of lower lifecycle emissions. Without a clean grid, the case for EVs is significantly weakened.
Supporting research into alternative battery chemistries that reduce dependence on scarce and geopolitically concentrated materials.
Conclusion: Equity and Sustainability Together
India stands at a crossroads. The path it chooses for transportation policy will shape not only its emissions trajectory but also the shape of its society. Policies that favour the affluent at the expense of the poor, that create new dependencies while claiming to promote self-reliance, that focus on narrow metrics while ignoring systemic effects—these are not sustainable in any sense of the word.
The goal must be to enable all Indians to access the mobility they need to participate in the economy and society, while minimising the environmental footprint of that mobility. This requires a nuanced, equitable approach—one that recognises the full lifecycle impacts of different technologies, the disparate circumstances of different users, and the long-term consequences of the choices made today.
Equity must underpin energy transition policy. Not as an afterthought, but as a fundamental design principle.
Q&A: Unpacking India’s Energy Transition Challenge
Q1: Why does the author argue that electric vehicles may not be inherently better for the environment?
A: The author cites environmental scientist Vaclav Smil’s work, which emphasises that the environmental impact at the point of use is only a small fraction of the total lifecycle impact. Electric cars cannot be truly better until all energy required to produce them and power their batteries comes from renewable sources. Currently, EVs merely shift the environmental burden—to coal-fired power plants, mining operations for lithium and cobalt, and manufacturing emissions. A small, efficient petrol car may have lower lifecycle energy consumption than a heavy EV powered by coal.
Q2: What is the equity problem with current EV subsidies in India?
A: The author argues that subsidies often flow predominantly to purchasers of luxury EVs, representing a regressive transfer from taxpayers (many of whom cannot afford cars at all) to the affluent. This enables richer people to maintain their lifestyles with a green conscience while doing little to help poorer people access affordable, safe transportation. Policies should ask: Are subsidies helping poorer people improve their living standards, or merely enabling the wealthy to feel good about their environmental consciousness?
Q3: How does India’s CAFE regime compare with other countries’ approaches?
A: Globally, major automotive markets like the US, China, Japan, Korea, and the EU offer regulatory protection to small cars under their emission policy frameworks, recognising their environmental and socioeconomic value. In contrast, India’s linear, weight-based approach penalises lighter vehicles with disproportionately stringent CO2 targets. This creates structural bias where heavier, higher-emission vehicles comply easily while small, lower-emission cars fail. Lightweighting—a key decarbonisation strategy—is thus disincentivised.
Q4: What does the author mean by “eating into our natural capital”?
A: The author explains that mankind’s global footprint (pressure on Earth’s resources) was 60% of the planet’s capacity to renew itself in 1960, but has now reached 130%. This means we are no longer living off the “consumption account” (the interest on our natural capital) but are consuming the capital itself—depleting resources faster than they can regenerate. This is fundamentally unsustainable and requires rethinking the growth paradigm of rich countries.
Q5: What policy approach does the author recommend?
A: The author recommends providing customers with multiple low-energy options rather than mandating EVs alone. This includes encouraging a range of technologies (small petrol cars, hybrids, CNG, biofuels, EVs) suited to different use cases and affordability levels; targeting subsidies to those who need them; investing in public transportation as the most energy-efficient option; accelerating the renewable electricity transition; and supporting research into alternative battery chemistries to reduce dependence on scarce, geopolitically concentrated materials.
