Figure 26. The Cost of Driving Versus Automotive Fuel Economy 3 3 §.2 ^ C C 41 "-C W 00 3 ki SB 2^ 8J.S O (0 £Q Dei o U Q U > H i« I I I Miles Per Gallon (United States) 50 I I I I 70 I "3! o 3 •;; 2 u -a s j » O t r 90 40 -30 -20 u Base Vehicle Purchase Price ($7,000) Vehicle Fees and Taxes _. Incremental Price • for Improvements c
million autos in developing countries in 2000 with this average fuel economy, the corresponding fuel use would be 1.4 mbd, only 40 percent higher than in 1982, despite a 180 percent increase in the number of cars. (See Table 9.) With 533 million autos worldwide in 2000 getting 48 mpg (4.9 lhk), global fuel use by cars would be about 6.7 mbd, 2.9 mbd less than in 1982. This reduction approximately equals the 2.8 mbd that FAO estimates is needed to double agricultural production in developing countries by the year 2000. 46 It is doubtful, though, that market forces alone would quickly lead manufacturers to produce and consumers to buy these highly efficient cars. For one thing, consumers would probably not enjoy significant direct economic benefits by buying such a car. If the cost of owning and operating a car would remain essentially constant over the entire range from 30 mpg (7.9 lhk) to 90 mpg (2.6 lhk), then market forces certainly won't promote high fuel economy, because few consumers will pay more initially in return for savings in operating costs. Hence, market forces might push consumers to buy cars with fuel economies up to about 30 mpg (7.9 lhk), but not much beyond. Even if the von Hippel-Levi estimates of the cost of fuel economy improvements prove high, market forces may still provide only a weak incentive to seek high fuel economy, because for highly efficient cars, fuel costs represent a tiny fraction of the total cost of owning and operating a car. (See Figure 26.) The value of fuel-efficient automobiles to society at large is much more clear-cut: they would reduce oil imports, help keep the world oil prices from rising, and promote global security. In addition, if developing countries require their own car manufacturers to produce highly efficient cars, they would become more competitive in global car markets. The Hyundai Excel, a high-quality, low-cost subcompact car recently introduced in North American markets from Korea, is proving to be a strong competitor to U.S., Japanese, and Western European manufacturers. Brazil and Taiwan are also evolving into competitive, world-class car manufacturers. If these countries become not only automobile exporters but also exporters of highly efficient cars, they could promote the use of such cars in industrialized countries and enjoy the benefits of the lower world oil prices resulting from oil savings there. Fuel savings front more efficient cars could be used to double agricultural production in developing countries by the year 2000. Steelmaking and Technological Leapfrogging. About five sixths of all steel is produced in industrialized countries, where it accounts for a significant fraction of manufacturing energy use, for example, one sixth in Sweden and one seventh in the United States. THE TECHNOLOGICAL POSSIBILITIES Energy efficiency improvements have been pursued throughout the history of steelmaking, as is indicated by changing coking coal requirements for the blast furnace, the single largest energy user in the industry. In a blast furnace, hot air is blown through a stack of pieces of coke and chunks of iron ore and oxygen is transferred from the iron ore to the carbon, producing a combustible blast furnace and liquid pig iron, which is removed from the bottom. In 1804, about 5.5 tonnes of coking coal were required to produce a tonne of pig iron in England. The requirements in the United States had been reduced to 1.6 tonnes by 1913 and 0.9 tonnes by 1972. Besides the energy needed for blast furnace operation, additional energy is required for other steps in conventional steelmaking: ore preparation and coke manufacture, operation of 67