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How the Haves and the Have-Nots Can Meet in the Middle

Nathaniel Bullard
How the Haves and the Have-Nots Can Meet in the Middle

(Bloomberg Opinion) -- Earlier this month, my Bloomberg Opinion colleague Adam Minter tagged me in a tweet saying “in a digital age, there’s no beating the glamour of the analog car.” I responded that this glorification of analog vehicle technology is an echo of humans and their horses: If you have a fully manual car, you’re either at the lowest or the highest end of the global income range; if you have a horse, you’re either quite poor or very wealthy.

While the driver of a manual-transmission car without power steering, power brakes or any such amenities might be at the bottom or the top of the income range, anyone who chooses to drive such an analog vehicle is surely enjoying it as a luxury, not using it as a necessity. Someone who pays $160,000 for the pleasure of driving a lovingly restored Land Cruiser can surely find a cheaper way to get to the beach. Even a Porsche aficionado can find a less expensive way to enjoy a 911 than through “one of the world’s foremost distillers of the essence of the air-cooled Porsche.” Also, if you think “air-cooled Porsche” sounds like something you’d associate with “Silicon Valley billionaire,” you’re right.

This dichotomy — manual vehicles are either for people who have few resources and no choices, or they’re driven by those who have near-infinite resources and choices — is an interesting one. It also works the same way as an analogy for food, energy and cleaner transportation.

In her new book “The Way We Eat Now,” Bee Wilson lists the 10 countries found to have the highest-quality diets. Here they are, along with their gross domestic product at purchasing power parity and global per capita GDP rank:

These are not rich countries, to say the least. As Wilson notes, rising incomes bring with them an abundance of calories (from processed foods) but less nutrition, and it is not until you reach the highest end of the income range that you see healthful diets again. Put another way, considering the nutritional diets of Chad, Mali and Cameroon: If you have a diet this healthful, you either don’t have the income for or access to highly processed foods, or you have the income and leisure time to prepare healthful food (or can pay someone else to prepare it).

You can see the same pattern in electricity. A fully off-grid but electrified house is either sipping tiny amounts of power through a pay-as-you-go program such as Kenya’s M-Kopa Solar, or you’ve built a robust, sizable and pricey system to meet significant electricity demand. Bloomberg recently featured eight private islands you can buy today, and six of them have an off-grid solar system.

The continued electrification of transport might bring a similar distribution as well in a country such as India. BloombergNEF research finds that two- and three-wheeled electric vehicles are already competitive with their internal-combustion counterparts at the bottom end of India’s vehicle market. Meanwhile, an electric-car owner in India has the resources not only to buy a car, but to charge it properly as well.

Higher incomes also have a higher impact on the environment and health. It is not until incomes are very high that people can afford to eat organically, live off the grid or own a low-emissions vehicle. What we might see — and what I hope we will see — is that the bottom and the top will compress the middle as technologies decrease in cost and increase in efficiency, and as consumers everywhere become more aware of their carbon footprints and want to reduce them.

As solar systems scale up from pay-as-you-go to zero-emissions microgrids, and as residential home systems become ever cheaper, they expand the zero-carbon options at the bottom and top ends of global electricity consumption into the vast, mostly fossil-fueled middle. As electric transport in India improves, its market expands; as electric passenger cars come down in price, they take market share from combustion vehicles. Technologies that look like necessities for the poor while being affectations for the rich might end up meeting in the middle — and cleaning up our consumption at the same time.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nathaniel Bullard is a BloombergNEF energy analyst, covering technology and business model innovation and system-wide resource transitions.

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