Supreme Court Has Sided With Delhi's Rich And Their SUVs

Pay 1% and drive a big diesel car.

So the rich and powerful win again. The Supreme Court today lifted its temporary ban on diesel vehicles with an engine capacity over 2000cc in Delhi. It added a "green cess" of 1%, a figure so low that it would be laughable if it weren't so sad. That's hardly a number that's going to be a problem for those who buy big diesel cars. Are they going to care about spending an extra Rs 30,000 on a Rs 30 lakh car? Doubt it. Compare this to Delhi's car registration which range from 4% (cars costing under Rs 6 lakhs) to 12.5% (for cars over Rs 10 lakhs) So this is nothing more than a token gesture by the Supreme Court. And that is what is so sad.

In December, when it banned large SUVs, the Supreme Court gave voice to the growing concerns of pollution in Delhi and recognized diesel as a fuel more polluting than petrol. By only banning those cars above 2000cc, it put people carriers and vehicles for the rich on notice. The impact was greater than what one could have expected. The sale of all diesel cars in Delhi plummeted as people thought that the ban could extend to smaller and cheaper cars.

But of course, it was too good to last. The automobile industry with battalions of highly paid lawyers descended on the Supreme Court asking for a review of the ban. They argued that diesel was not any more polluting than petrol, that such decisions were grievously injuring the industry and that such policy changes were unjustifiable. They were joined in this chorus by government of India through no less than Attorney General Mukul Rohatgi.

"As on today, we cannot say that diesel is an undesirable fuel...there is no empirical study. Give us six weeks and we will conduct a comprehensive study on the subject and submit a report in the court. But modify your order since it has been affecting the economy and especially the FDI. There is a sense of uncertainty and industry leaders are complaining about unpredictability of the investments," the Attorney General argued.

The government of India has no evidence of diesel being an undesirable fuel!  Obviously the Attorney General's office hasn't heard of Shri Google. If they had, they would have found that just at the time that the government was making these bold assertions, government-led studies in UK, France and Germany all concluded that diesel vehicles were not conforming to the required standards (BTW Europe is running on Euro 6, while we are still on Euro 4). 

In January, The Guardian reported that "Parts of the capital have already breached EU hourly limits for nitrogen dioxide pollution which causes thousands of premature deaths each year... London has already breached annual pollution limits just one week into 2016, and only weeks after the government published its plans to clean up the UK's air... At 7 am on Friday, Putney High Street in West London breached annual limits for nitrogen dioxide (NO2), a toxic gas produced by diesel vehicles that has been linked to respiratory and heart problems"

In April, the same paper reported that a Department of Transport study found "Not a single car among 37 models tested against the two most recent nitrogen oxide emissions standards (given off from diesel: my insertion) met the EU lab limit in real-world testing, with the average emissions being more than five times as high...The study also revealed that none of the 37 top-selling vehicles that were claimed to have met the previous Euro 5 limit of 180 mg/km, in place from 2009 until last year, stayed within that legal level when driven on the road."

Germany is reported to be considering giving cities the right to ban old diesel cars

And French investigators came up with similar findings.

Of course, we haven't done our own Indian study to conclude that diesel fuel emits large amount of nitrogen oxide. After all, everyone else in the world can be wrong, because, as usual, we know best. More importantly, the Attorney General in early June promised a report in six weeks. Well, where is it? Why hasn't the Supreme Court waited for that study? Perhaps because too many auto-makers were flooding the media with complaints of loss of business and threats of foreign investment running scared. 

Meanwhile, Parliament was told that the Ministry of Heavy Industry has instituted a study on the subject. Wow! That's as neutral as it gets; may as well have asked the car manufacturers to undertake the study. 

And is the Government going to address the other part of the issue - that in addition to diesel being an unclean fuel,  but that diesel cars - outside test conditions - don't meet the emission standards that they are supposed to?  

There is another more complicated argument - that industry's investment was made when a set of laws applied, and therefore, can those laws be changed, effectively making that investment worthless? The argument is that many car-makers invested in diesel engine manufacturing over the past few years and the ban of 2000cc plus diesel cars has moved the cheese. Yes, it did, and diesel cars sales, as we noted above, fell. That was a psychological fall-out of the ban. Also, with Delhi being the biggest market for cars, especially big diesel cars, these manufacturers were hurt. So are they right in arguing (and in the case of one Japanese manufacturer threatening to stop further investment) that these changes to rules are unfair?

Firstly, we should recognize that the reason diesel cars were selling big-time in India was that for decades, diesel was subsidized. So while the diesel car cost a bit more to buy, the running costs were much much lower. Which is why all car manufacturers started making diesel cars. The rationalization of diesel prices only began in 2014, and gap between  petrol and diesel prices has narrowed only recently. But even today a Rs 9 per litre gap plus the greater efficiency of diesel probably makes diesel cars more attractive. This is very true for the people-moving class of cars.

Secondly, the argument that industry investment must be protected even if evidence shows that its product is damaging to public health is a very worrying position for the car industry to espouse and for the government to maintain. Just because it involves Foreign Direct Investment, are we saying no change in pollution laws may take place without those investors' OK? So why did we ban smoking in public places? It hurt the cigarette companies. Why did we ban asbestos? Why do we ban the felling of trees? Or building hotels on beaches? 

Consider also that auto-makers do have petrol variants of most diesel  cars either in the Indian market or internationally.

The saddest part of this episode is that the Supreme Court has signaled that eventually, people don't matter, business does. A symbolic cess is meaningless. The court could have treated the issue differently, by recognizing that diesel is harmful, and raised the a cess on the fuel itself. That would have closed the gap between the price of diesel and petrol, and left the consumer to choose on a more even wicket. 

A great monsoon has kept our air cleaner over the past few months. By winter, when the choking feeling will begin again, perhaps the judges of the Supreme Court will re-visit this issue. If not, we will continue to add nitrogen oxide to our blood streams.

(Ishwari Bajpai is Senior Advisor at NDTV)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.