Experts estimate a hybrid or electric car has to be driven for 250,000 kilometres before it offsets the environmental impact of its manufacture, hampered by rechargeable batteries’ short lifespans. iStockphoto.com
Experts estimate a hybrid or electric car has to be driven for 250,000 kilometres before it offsets the environmental impact of its manufacture, hampered by rechargeable batteries’ short lifespans. iStockphoto.com
Experts estimate a hybrid or electric car has to be driven for 250,000 kilometres before it offsets the environmental impact of its manufacture, hampered by rechargeable batteries’ short lifespans. iStockphoto.com
Experts estimate a hybrid or electric car has to be driven for 250,000 kilometres before it offsets the environmental impact of its manufacture, hampered by rechargeable batteries’ short lifespans. iS

Charged issue: are green cars still that environmentally friendly after their manufacturing processes?


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It seemed like it would never happen. But the UAE is gradually waking up to the reality that thunderous V8s, as lovely as they are, don't really represent the future of motoring in this region – or any other. Toyota has even gone so far as launching the Prius here – a great car, by the way, that I'm sure will find an appreciative audience. The tide is turning.

As much as any of us can extol the supposed virtues of motoring with an environmental conscience, however, there will always be another voice – someone else beating an altogether different drum. For every exponent of green cars, there’s a naysayer. For every person concerned about carbon emissions, there’s someone saying it’s all a conspiracy and there’s nothing to fear.

There’s no getting away from the science: an excess of carbon dioxide – the gas produced by burning fossil fuels and us exhaling – is bad for Earth. It’s fine if there are sufficient trees and other flora to transform that gas into oxygen, but agriculture and urban development has decimated the world’s forests and other natural resources to the point that, since the Industrial Revolution, there’s a gross imbalance in our ecosystem. We’re slowly but surely killing this place we call home.

To stop this slide towards irreversible catastrophe requires urgent and desperate measures. And the answer, at least according to certain car manufacturers and fossil-fuel suppliers, is to either reduce our consumption of oil or to rely on electricity to power our personal transportation.

Take a close look around when you are next in a shopping mall or public car park. Charging stations for electric and plug-in hybrid vehicles are becoming more commonplace – evidence of how seriously our Government is taking the issue of global warming and this country’s impact on the environment. We’re addicted to large-capacity gas-guzzlers, aided by inexpensive petrol that’s the envy of many countries. To provide some perspective, the last time I filled up a Range ­Rover in the United Kingdom, it cost me the equivalent of Dh900 – something the majority of people cannot realistically afford, forcing many to opt for small, efficient cars that are easier on the pocket.

Couple those higher fuel prices with taxes applied to those with thirsty vehicles, and you can see why sales of these behemoths are in decline in other countries. But here, they’re more popular than ever – something companies such as Toyota are trying to deal with by promoting hybrids such as the Prius and other models. BMW sells its i8 supercar, too, which offers plenty of flash without the hefty environmental impact normally associated with performance cars, and other manufacturers are clamouring for attention with downsized, turbocharged engines that offer more fuel efficiency than ever before.

Is it all enough? Not really, so the rise of the electric vehicle continues unabated, but this isn’t without its own set of problems. Aside from the obvious matter of how the electricity required to propel these cars is generated (unless we’re talking renewable sources such as solar, or nuclear, it comes from burning fossil fuels), there’s the contentious issue of battery mass production to consider.

The truth is that production of hybrid and electric vehicles is far more energy-intensive than that of traditional cars. The lithium ion batteries alone are incredibly complex, requiring the use of hazardous cobalt and other mined materials that are shipped around the planet to their place of construction. As a result, by the time a hybrid car rolls off the factory line, it has already caused more environmental damage than one with a standard internal combustion engine.

Dave Roos, writing for the website HowStuffWorks, ­suggested that it could take a hybrid or electric car being driven for 250,000 kilometres for it to “break even”, or begin to make up for the environmental impact caused by its manufacture – something owners of these cars are unlikely to ever do, especially as the lifespan of rechargeable batteries is still fairly poor, with most having to be replaced long before hitting that quarter-million tipping point. This has a direct cost to an owner’s pocket, too, never mind the environmental price paid.

It’s when you begin to scratch the surface of so-called green-car technology that you begin to uncover all sorts of flaws with them as a concept. It’s true that hybrids are, for the most part, more fuel-efficient than traditional cars. And all-electric vehicles don’t emit any greenhouse gases whatsoever, with recharging via renewable energy sources completely easing their owners’ consciences. It’s a fact that, especially in urban environs, they’re a better solution than what we’ve been used to for decades, particularly when it comes to air quality.

Certain countries have embraced hybrid and electric cars with gusto. Norway, for instance, is one of the leading lights, and if you have ever visited that spectacular country, you will know its clean air is highly prized.

Three years ago, Guillaume ­Majeau-Bettez, the author of a report at the Norwegian University of Science and Technology, told the BBC's Today programme that the electric car "has great potential for improvement, but ultimately what will make it a success or failure from an environmental standpoint is how much we can clean up our electricity grid – both for the electricity you use when you drive your car, and for the electricity used for producing the car".

In Norway, where most power sent to the grid is generated using renewable hydroelectric methods, it isn’t really a problem. But these cars aren’t made in Norway, and neither are their batteries. China, on the other hand, generates practically all its electricity by burning coal, completely undoing any positive aspects of hybrid and electric-vehicle ­ownership.

In his report, Majeau-Bettez estimated that the environmental impact of an EV car driven in the UK is approximately 10 per cent better over its life cycle than that of a car with a traditional engine – hardly a resounding victory. But he also pointed out that, as electricity generators gradually (and literally) clean up their act, this ratio will improve somewhat, helped when production processes for the batteries themselves become more streamlined and efficient.

So should you go green? Will running a hybrid or electric vehicle in the UAE make you a better person or at least help save our precious planet? It's a difficult one, because we are still in the process of tumultuous change, in our attitudes and habits. For Majeau-Bettez, it's all about trade-offs: "We want people to make choices with their eyes open," he told Today. "There is no such thing as a zero-emission anything, whether a zero-emission vehicle or a zero-emission building. Everything has emissions, but sometimes they are just further away from the user."

motoring@thenational.ae

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.”

The most expensive investment mistake you will ever make

When is the best time to start saving in a pension? The answer is simple – at the earliest possible moment. The first pound, euro, dollar or dirham you invest is the most valuable, as it has so much longer to grow in value. If you start in your twenties, it could be invested for 40 years or more, which means you have decades for compound interest to work its magic.

“You get growth upon growth upon growth, followed by more growth. The earlier you start the process, the more it will all roll up,” says Chris Davies, chartered financial planner at The Fry Group in Dubai.

This table shows how much you would have in your pension at age 65, depending on when you start and how much you pay in (it assumes your investments grow 7 per cent a year after charges and you have no other savings).

Age

$250 a month

$500 a month

$1,000 a month

25

$640,829

$1,281,657

$2,563,315

35

$303,219

$606,439

$1,212,877

45

$131,596

$263,191

$526,382

55

$44,351

$88,702

$177,403

 

The specs: 2018 Opel Mokka X

Price, as tested: Dh84,000

Engine: 1.4L, four-cylinder turbo

Transmission: Six-speed auto

Power: 142hp at 4,900rpm

Torque: 200Nm at 1,850rpm

Fuel economy, combined: 6.5L / 100km