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Emerging middle class throws wrench in Copenhagen

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Next month's climate talks in Copenhagen already have the blogosphere atwitter with commentary - optimistic, cynical and everything in between.

Parthasarthy Guha tells a different story.

Guha doesn't analyze emissions targets or backroom dealings. But, his description of buying his first car is nonetheless telling of the issues facing the meeting.

The post is part of an advertising campaign for the CDN$2,500 Nano by Tata Motors, also known as "The People's Car." In it, Guha describes himself as a car lover - he just admires them from afar. For the last 30 years, Guha's family couldn't afford the luxury. In 2005, he bought a scooter. But, the small, cheap car offers more room for his family.

"Tatas understood our problems and made this car for scooter owners like us," writes Guha. "This made me sure that the middle class people of India can expect something great to come their way."

Guha is the face of India's growing middle class. They are 200 million people strong and are fast becoming an economic powerhouse. They could, however, throw a wrench in Copenhagen's plans.

A middle class is vital to a country's stability and growth. But, as Guha and thousands more upgrade, their effect on the environment, the price of oil and other consumer goods could be enormous.

India's middle class is still different from its North American counterpart. Several definitions abound but the World Bank identifies the global middle class as those earning between $10 and $20 per day. That's a far cry from the U.S. 2008 median household income of $50,303.

Between 1990 and 2002, the World Bank estimates only 80 million people in the developing world entered the Western middle class. But, 1.2 billion joined the global middle class definition. The vast majority of that growth occurred in Asia. While their salaries are still small, rent and food are relatively inexpensive. That increases the prospect of buying discretionary goods.

Seeing families break through poverty is incredible. But, this discretionary income poses a problem. As 1.2 billion people start spending, the potential for overconsumption in our already resource-drained world could be devastating.

Let's look at food. With more income, consumers in China and India have increased their demand for dairy and meat - items once considered luxuries.

"The buying power of our middle class consumers is increasing," said Indian Food Processing Industries Minister Subodh Kant Sahai at a national conference. "Despite the global financial sector, the food processing sector in India grew in double digits by nearly 14 percent."

This growth has consequences. Already, corn is more widely produced to feed cattle rather than people. This increased demand drives prices up - an effect that will be felt in our supermarkets and by those still in extreme poverty.

The same is true for other commodities. Just this month, a report by the U.S. Energy Information Administration says China and other Asian nations are rebounding oil consumption. Analysts are predicting another rise in price and subsequently the costs of goods.

As for Guha's Nano, "the People's Car" gets 21 kilometres to the litre. His scooter likely got about 80. That means he will produce more emissions. Add that to the vast stocks of coal India and China are using and the targets being set in Copenhagen become much harder to achieve.

Of course, Guha's carbon footprint is still comparatively small. India consumes more energy overall but Canada uses 16.5 times more per capita.

Still, if the emerging middle class starts following Western habits and we don't start curbing our own, we could have trouble finding enough to go around.

Buying your first car is a major accomplishment - even if Guha has to wait another six to eight months for delivery to due to Tata's limited production capacity. But, as he celebrates, we all need to reassess our needs and maybe admire a few things from afar.