Green Cars and Economic Stimuli

Heard on the morning news that the German $66B economic stimulus package passed today also includes a measure to encourage people replace their cars. It is sort of understandable as a short term measure, as their economy is quite reliant on the infamous German car makers who, of course, are looking at a bleak 2009. Still if you think of, say, a few million germans rushing to buy new cars and dump their (probably well-running) existing ones — doesn’t sound that reasonable from long term environmental damage point of view.

I looked it up, and it comes out that…

Other measures include a 2,500 euro payment for drivers who buy a new low- emission car.

Now, depending on what “low emission” means in this case the measure could work either way – for German manufacturers or for the environment. For some reason I doubt that these two goals could be obviously achieved together, or at least perceptionally “green” and “german” are not the first semantic associations that pop into mind as a bundle when thinking about cars…

Toyota announced their new Prius yesterday. Looking slightly better (but not beautiful), adding a few interesting innovations (such as solar-paneled moonroof that generates power for the ventilation on hot days) and less than 5l/100km (50mpg) fuel consumption it is a worthy upgrade to what has already been a great if somewhat quirky car till now.

Toyota basically owns the hybrid car market, claiming 91% market share in Europe in 2006. So putting one and one together – to what extent will the German government be supporting the Japanese economy instead of their own with their new car purchase support measure?


I very rarely have found myself spending several hours on a single magazine article, but Richard Behar‘s report on China in Africa from June issue of FastCompany is very much worth you invest that time too.

This illustration probably recaps the “what” part of the story:

The Race for Raw Materials

In a word, the chair you sit on and the computer you’re using to read this post more likely than not come from China, no surprise there. What we probably have noticed less as a trend as consumers is that the basic components for making these things, from timber to cadmium, increasingly get shipped to China from Africa.

But what is much more revealing, interesting and depressing in the same time is the “how”.

Post colonial times Europe and the US have kept investing in Africa attaching a lot of soft values to the cold hard cash as conditions: human rights, transparency, saving the environment, democratic values, public education, whatnot. (There is a lot of hypocrisy involved in that too – read part 5 on the US in Equatorial Guinea) Changing whole African societies towards this “western thinking” has slowed the inflow and efficiency of these investments down, feeding in many cases the NGO-s of the donor more than the target countries.

And now imagine that enters a player with a different valueset (communism!) and priorities (feed a double-digit economic growth of a billion+ citizens) and willingness to compromise (bribes, the Earth) … and with a wallet like this:

Beijing's Leverage

This report on what China has done in Africa over just 5 years should give you some food for thought on how the world will look like over next 50. Read it..

A Lot Of People Doing Wrong Things in Estonia

Manufacturing: Estonia VS Germany
An interesting graph from a presentation by Ott Pärna, CEO of Estonian Development Fund (see also my post from their recent event, in Estonian). Estonian & German industries being compared here by employment (left) and value added per manufacturing area.
One common characteristic we share is that there are a lot of areas where a large share of people is adding a tiny part of the value for country’s economy. However, it is quite concerning how tilted towards the bottom (= less value) is the distribution of Estonian workforce.
It would be very interesting to see service industries in different countries being compared in a similar way – such as the software, biotech, nanotech and other innovation/R&D fields we talk so much about. Anyone have a good pointer?
PS: most value in German manufacturing is added with oil, nuclear fuel and tobacco? Scary…