Passenger vehicles that minimize the costs of ownership and environmental damages in the Indian market

Rapid expansion of population and income growth in developing countries, such as India, is increasing the demand for many goods and services, including four-wheeled passenger cars. Passenger cars provide personal mobility; however, they also have negative implications for human wellbeing from increased air pollutants and greenhouse gases (GHG). Here, we evaluate the range of passenger vehicles available in the Indian market to identify options that minimize costs, human health effects and climate damages. Our approach is to compare alternative fuel/powertrain vehicles with similar conventional gasoline fueled vehicles and assess the differences in full (private and societal) costs for each pair. Private costs are the combination of capital costs and the discounted expected future fuel costs over the vehicle lifetime. The costs to human health from air quality are calculated using intake fractions to estimate exposure and literature values for the damage costs adjusted by benefits transfer methods. We use the Social Cost of Carbon to estimate climate damages. We find that, on average, the net present value (NPV) of the full costs of compressed natural gas (CNG) vehicles are lower than comparable gasoline vehicles, while, diesel vehicles have higher costs. Presently, electric vehicles have higher private costs (due to high capital costs) and societal costs (due to electricity generation emissions). Either a less carbon intensive electricity grid or an increase in the CNG fleet would minimize total costs, human health effects and GHG emissions from the passenger vehicle fleet. Policy makers should consider promoting the use of CNG vehicles, although this would require supporting infrastructure improvements.