ENERGY AND TRANSPORTATION ISSUES Introduction 1. In the context of promoting sustainable life styles and consumption patterns, the policy implications of energy and transportation issues are considered relevant for the Commission on Sustainable Development's (CSD) consideration of atmosphere at its fourth session. Aspects of the energy problem 2. In the world economy consumption of energy and transportation services and investment in these sectors accounts for 10-15 per cent of world GDP. As a share of world investment around 20 per cent represents investment in the world energy sector and perhaps half again as much in transportation infrastructure. The world fossil fuel industry is a $ one trillion per year business in a world economy of about $26 trillion. The World Energy Council estimates that annual investments in the entire world energy sector of $ one trillion per year are needed to match expected increases in demand. 3. Worldwide fossil fuels contribute about 85 per cent of world commercial primary energy supplies, 97 per cent of fuel used in transportation, and 64 per cent of electricity connected to grids. 4. Although most of the consumption of global energy presently takes place in the developed countries, most of the growth is projected to occur in the developing countries. In 1990, they accounted for 29 per cent of global energy, and they are projected to account for almost 50 per cent by the year 2020, while industrialized countries would go from 51 per cent to just below 40 per cent and economies in transition from about 20 per cent to about 15 per cent. 5. In developing countries 2.5 billion people, mostly in rural areas, have little access to commercial energy supplies. If lack of energy is a barrier to socio-economic development and growth, the ways in which it is produced and used combined with its present and projected scale contribute to many environmental problems. 6. Moving toward a more sustainable world energy and transport economy will require major changes in policies which will in turn yield results only over several decades because of the sheer size of the sector. Yet presently there are many examples of deficient policies. For example, government subsidies for energy prices worldwide are approximately $200 billion per year and in developing countries, the total of these subsidies in 1992 was larger than all official development assistance. Another example is that governments in developed countries spend over half of their $8 billion-a-year energy research budgets on nuclear programmes, whereas renewables get less than 10 per cent. Businesses which subsidize automobile use of their employees often get a tax break. 7. Globally, the world energy sector has been the subject of much intensive study over the years, concerns about the long-term availability and security of fossil fuels having largely given way to concerns about the contribution of anthropogenic emissions of CO2 to global warming especially in the work of the Intergovernmental Panel on Climate Change. Transportation issues 8. Transportation accounted for 24 per cent of world final (commercial) energy demand and about 30 per cent in OECD countries in 1990. Comparable figures for OECD countries in North America and for the developing countries were 34 and 17 per cent, respectively, in the same year. 9. In 1990 transportation demand has been responsible for two-thirds of the additional growth in energy demand in the developed countries and around 15 per cent in developing countries and economies in transition. 10. Globally about 60 per cent of transportation energy consumption is accounted for by passenger travel and 40 per cent for movement of goods. Transportation of goods and GNP are strongly and positively correlated. Choice of transportation mode over time has favoured faster and more energy- intensive transportation modes. Passenger transport is much less highly correlated with GNP or GNP per capita; here transport policies, infrastructure availability, urban spatial configurations and socio-cultural factors and preferences make a large difference in choice among urban transport modes. 11. A number of scenarios of future world transportation demand prepared by IIASA suggest that on present policies, recent observed trends increases in mobility and changes in transportation modes will dominate the evolution of fuel efficiency which implies growth of global transportation energy demand at more or less similar (linear) rates as in the past decades. The scenarios indicate a tendency toward saturation of transport demand in OECD countries, but continued rapid growth in developing countries. 12. The relative contributions of population growth and mobility per capita to total energy transportation demand in the 1970s and 1980s vary from region to region. Except in North America, mobility matters more than population growth in all regions. 13. The scenarios agree that future demand growth in OECD countries could be rather flat, even negative. Forthcoming saturation of ownership rates and continued improvements in fuel efficiency are the principal reasons. Scenarios for developing countries indicate possible growth of transportation energy demand by a factor of 2 or 3 over the next three decades (to 2025/2030). Existing disparities in rural/urban incomes are likely to persist. Thus, the bulk of mobility increases will occur in urban areas, already plagued by congestion and air pollution. 14. The transportation sector is of considerable interest not only because of its importance as a source of greenhouse gas emissions, but also because of effects to human health and the environment associated with other pollutants and a number of other issues such as traffic accidents, congestion, noise, impeded access to cities, competition for land use, and restricted access of the poor to basic services. 15. In most industrial countries, vehicles account for approximately one- half the emissions which cause smog, virtually all of the carbon monoxide in city centers, more than a quarter of particulate matter, and more than half the toxic pollutants. These include sulphur dioxide (4 per cent), oxides of nitrogen (61 per cent), lead and aromatic hydrocarbons (49 per cent). Such emissions cause adverse health effects and some also acidify the environment, thereby damaging forests, poisoning lakes and steams, and reducing crop yields. Vehicle emissions are also responsible for about 21 per cent of CO2 emissions. 16. Some estimates suggest that the social and environmental costs associated with current transportation patterns at least equal the pre-tax marginal fuel costs required to drive one kilometer and may be as much as four times that amount. 17. While there have been large improvements in fuel efficiency and in controlling emissions per unit of fuel consumed, these effects have been offset in automobile transport by increased numbers of vehicles per person (motorization); increased number of trips per vehicle (mobility) and shifts towards less-fuel efficient types of vehicles, such as minivans, 4-wheel drive, and light trucks. In air transport there have been large improvements in energy intensity due to more seating capacity per plane, higher utilization rates, and engine improvements, but here also increases in the volume of air travel have meant steadily rising levels of harmful emissions. Besides, the impact of the emissions in the stratosphere is more severe than low level atmospheric emissions. Despite efficiency improvements, per capita emissions of air transport are extremely high. Civil aviation is estimated to contribute only about 2.2 per cent of nitrogen oxide emissions and about 4.5 per cent of global warming due to anthropogenic CO2 emissions. In truck transport, energy per tonne-km has actually increased slightly (worsened) because of the use of smaller trucks and or smaller loads. New technologies 18. There are a number of ways in which some problems associated with transport can yield to improved technology even in the short and medium term. These are mainly improvements in internal combustion engine design and reformulated fossil fuels. Other changes requiring more time would include alternative fuels, and, especially, electric drive vehicles. The scope for improvements of these types is especially great in automobile and buses, but less for air transport. Changes in the structure of transportation systems to encourage modal shifting toward inherently more eco-efficient modes such as rail and inland water for freight and toward urban mass-transit and high speed inter-city rail for passenger travel would make a major contribution to reducing environmental problem but require a more complex set of policy interventions. Beyond the problems of emission, congestion is also a problem for which a combination of mass transit and management of access to congested areas has considerable possibilities. 19. Examples of all of these can be described, including in many cases, pilot projects to explore their feasibility. 20. Approaches to improved fossil fuels have included removing lead (or not adding it) which has also required engine redesign; raising octane ratings to get more complete combustion and oxygenating petrol. Presently, a system for using micro-organisms to desulphurise crude oil has moved from the laboratory to a pilot plant. The process, called biocatalytic desulphurisation is being explored for applications to crude oil, petrol and diesel and offers the promise of halving the cost of conventional sulphur removal systems. The technology may be capable of extension to removal of nitrogen and metals from oil as well. 21. Alternative fuels such as methanol and natural gas in internal combustion engines have had limited application but have helped the air quality and security of oil supply issues. The most promising developments have, however, been in electric vehicle technology which has made major advances both in respect of the performance of the propulsion system and in respect of the source of electricity. The electric vehicle introduced by General Motors in 1996 uses 26 lead-acid batteries, a technology which is expected to give way to the nickel/metal hydride battery in two years. Both of these systems require lengthy periods of time for recharging and have limited ranges as compared with petrol vehicles. 22. At the same time a number of European countries have committed themselves to develop a limited infrastructure to support the use of the zinc- air battery which uses replaceable zinc-anode cassettes. The cassettes are recharged in special facilities which permits rapid refuelling of the vehicles and an extension of their range to 400 miles. In Germany alone, 50,000 vehicles are expected to be in use by 2000 principally in the federal government post and telecommunications agencies. By that date they are expected to be competitive with petrol-fueled vehicles. 23. While these technologies may be able to reduce and eventually eliminate greenhouse gases and air-borne pollutants from vehicles, they displace the problems associated with primary energy production from the vehicles to power plants where fossil fuels continue to dominate production. Hydrogen-fuel cell technology offers the long-term potential to decarbonize the entire energy chain related to road vehicles. This technology uses hydrogen which can be produced by solar power cells from water. The hydrogen combines with oxygen in the fuel cell to produce electricity and water vapor. A number of demonstration projects are planned for 1996. One in the Coachella valley of California aims at introducing golf carts powered by fuel cells, 20,000 of which are used on the 90 golf courses located near Palm Desert and for trips to town. The project would include hydrogen-refueling stations as well as the carts themselves. Another project in Chicago will put into use three buses powered by compressed hydrogen fuel cells. Siemens, United Technologies, Toshiba, Daimler-Benz and General Motors are all investing in research in this technology. Once proven commercially, however, widespread dissemination would need many years and billions of dollars to build a nationwide network of hydrogen filling stations. 24. In the area of truck technology, Volvo has produced a research vehicle for short-haul freight. It is a hybrid using nickel/metal hydride battery with a range of 25 kms and an ethanol-powered gas turbine linked to a 110 kw AC generator for longer trips. It also employs an advanced communication and navigation system to aid in eliminating unnecessary journeys. Since the batteries weigh two tonnes and the vehicle is extremely expensive it is not expected any time soon to have an impact on truck transport. However, natural gas powered trucks with an engine developed by Perkins have been entered into service as a pilot project with Marks and Spencer delivering chilled food supplies to stores in London. These trucks emit practically no particulates and reduce nitrogen oxide emissions to levels 60 per cent lower than new standards will require. 25. Improving the eco-efficiency of vehicles used for transport in each transport mode can, however, be only a partial solution to many environmental problems because of the tendency for transport patterns to shift toward less eco-efficient transport modes and for volumes of travel to increase. For passenger travel in urban areas, mass transit systems are practical alternatives. Interest in mass transit is increasing as urbanization intensifies and, as rapid growth in motor vehicles exceeds the expansion of roads leading to increased congestion. In developing countries the proportion of the population living in urban areas, which was 25 per cent in 1970, is expected to approach 60 per cent by 2025. Already the transport sector consumes 15-25 per cent of urban government budgets in developing countries. Relatively few cities in developing countries have rail-based mass transit systems (24 have heavy-rail (metro) or light rail systems and another 20 are at various stages of planning or construction). These are extremely expensive technologies while bus services, making use of dedicated buslanes (busways) can move volumes of passenger traffic comparable to light rail at a fraction of the cost. Perhaps the most successful example of an efficient bus system is that of Curitiba, Brazil, a city of 1.6 million. This system was gradually developed over 20 years in an integrated framework of public transport, road and land use. It has succeeded in eliminating congestion, reducing overall citywide fuel consumption by 25 per cent and reducing air pollution to one of the lowest rates in Brazil. 26. Many other cities have explored means of demand management to reduce urban congestion. Computer technology has made possible automatic metering of automobile use, variable fare structures based on length and time of travel, and automatic debiting of the motorist's account or of a stored-value medium. Policies to support and force the pace of change 27. Policies can be focused on three main strategic objectives: (i) reduction of emissions from each transport mode; (ii) encouraging shifts among transport modes and (iii) managing transport demand. Economic investments, regulatory approaches and urban and spatial planning all have important roles to play. 28. In Europe a combination of taxes on vehicle purchase, registration and use includes fuel taxes combined with subsidies to public transport has resulted in a pricing structure which greatly favours public transport. In Paris, for example, the price per passenger kilometer of travelling by car is 4 times more expensive than travelling by public transport. This is one of the reasons why per capita energy use by automobiles in seven European countries is only 40 per cent of the levels in the United States. 29. Tax policies have gone much further to internalize environmental and some costs related to fuel use in passenger travel than they have to the transport of goods. Thus, diesel fuel is taxed at lower rates than petrol because it is used in truck transport. This has led to automobile owners switching to diesel fuel, which is more polluting on balance. Where pricing differentials have been used to reduce the use of lead in petrol, they have also been highly effective. Similarly, aviation fuel is exempt from value- added tax. In both cases, competitiveness concerns weigh heavily in public policy formulation. 30. The gradual tightening of emissions standards and fuel efficiency standards has been an important factor in driving the search for new technologies described earlier. These tightening of standards have taken the form both of government established regulations and also voluntary agreements. Germany, for example, has reached a voluntary agreement with industry to reduce CO2 emissions from new cars by 25 per cent over 10 years and efforts are underway in the European Commission to negotiate a similar agreement concerning all countries of the European Union. In the strategy member states are encouraged to develop and use an EU framework for vehicle taxation to promote low consumption cars. In another recent development the commission has issued a draft of proposed emission limits with benchmarks to be reached in 2000 and 2005. The new standards would reduce emissions (g/km) of most pollutants to less than one-third of the 1996-1997 standards. A minimum package of measures to achieve these targets may cost in the neighbourhood of $3.6 billion per annum. Moving immediately to even higher standards using best available technologies as advocated by many would cost about 3 1/2 times as much. 31. A similar approach has been utilized in civil aviation in the framework of the Convention on International Civil Aviation. Limits for three gaseous pollutants were established for carbon monoxide, nitrogen oxide and hydrocarbons in 1981 and were strengthened in 1995 to be phased in over four years. Further tightening is envisaged in 2000. 32. Although measures to accelerate the introduction of technologies to reduce harmful emissions and improve fuel efficiency have great potential to reduce environmental impacts, growth in the volume of traffic could easily outweigh such gains. Measures to reduce the demand for transport thus deserve greater attention. Integrated land use and transport planning to favour mass transit is one such approach. These might include such measures as (i) concentrating high-density residential development areas, together with trip- attracting destinations in areas well served by public transport; (ii) using revenues from tolls, parking charges, vehicle registration fees and taxes to finance public transport; (iii) restricting access to town centres by parking charges, tolls, or outright bans; (iv) extension of public transport network coverage, capacity and frequency; (v) enhancement of speed and accessibility, e.g., by designated lanes for public transport and car pooling; (vi) improved comfort and security; (vii) expanded parking at main transit terminals and "park-and-ride" facilities in suburban areas. In addition, a number of trends related to the telecommunication and information revolution such as "teleworking" and "teleshopping" might be encouraged or reinforced by public policy to reduce the demand for low-occupancy commuter travel. 33. Demand management has been utilized in a few cities together with the provision of mass transit alternatives to reduce congestion in urban areas. Singapore has perhaps the most comprehensive system involving a number of measures, including automated road charging, steep vehicle ownership and parking charges. These were introduced with advance preparations including provision of by-pass routes, park-and-ride facilities and expanded bus service. Despite its high level of per capita income and rapid GDP growth, such measures have reduced the rate of growth of automobiles to about 3 per cent per year. Hong Kong, Oslo and a number of other Scandinavian cities are experimenting with similar measures. 34. Discussion of effective policy approaches in developing countries in the specialized literature also extend to the issue of sequencing. For example, in the case of vehicle emissions an effective sequence might be: (i) improved inspection and maintenance combined with improved traffic management; (ii) introduction of higher standards for new car technologies and cleaner fuels; (iii) introduction of incentives for scrapping older vehicles. In the case of improving transportation systems, an effective sequence might be: (i) low-cost road improvements and better maintenance; (ii) traffic engineering with priority for public transport; (iii) economic regulatory instruments to favour use of public transport; (iv) busways; (v) light-rail and incorporation of existing railways into urban mass transit networks, and finally (vi) heavy- rail where populations reach 3 to 5 million. Recent regional and international initiatives in the field of transport 35. As mentioned in the discussion of policies above, the European Commission has prepared an outline European Union Strategy for reducing CO2 emissions from cars for which the Commission will seek approval from the Council of Ministers and the European Parliament. The Commission has also prepared draft proposals developed by its industry and environment directorates for vehicle emission limits and fuel quality standards they intend to prepare for the years 2000 and 2005. These are expected to be finalized in February. 36. The United Nations Economic Commission for Europe has been holding a number of preparatory committee meetings for the 1996 Regional Conference on Transport and the Environment. Among the outcomes expected from the 1996 conference is the adoption of Guidelines for a common strategy regarding transport and the environment which would have the character of a binding commitment. Among the specific types of measures identified in the draft guidelines are the economic and fiscal measures such as road tolls and taxes, tax exemptions, and differentiated taxes on fuels and vehicles according to emissions and energy consumption. The guidelines might have the effect of stimulating ECE member countries not also members of the European Union, such as the economies in transition, to move toward EU practice in a number of areas, a process which will be accelerated by plans of many of them for accession to the EU. 37. In preparations for Habitat II a global workshop on Transport and Communication for Urban Development was held in Singapore in July 1995. This was followed by a seminar-cum-workshop on Transport Demand Management in Beijing in September 1995. Transportation issues are expected to figure prominently on the agenda of Habitat II, the final Prepcom for which is planned in February 1996. 38. OECD organized a meeting of its Task Force on Transport in Paris in November 1995 which examined a broad range of policy measures with the potential to mitigate the adverse environmental efforts of transport. This analysis drew on the reports of a series of major international OECD conferences focused on specific subjects like public transport (Budapest 1994), clean and efficient fuel automobiles (Mexico 1994, Berlin 1991, Rome 1990), urban transport (Dusseldorf 1993) and urban electric vehicles (Stockholm 1992). OECD also produced two publications in 1995 which attempted to present comprehensive and integrated strategies for developing environmentally sustainable transport. "Motor vehicle pollution; reduction strategies beyond 2010" focuses primarily on technological approaches to emissions reductions and fuel efficiency improvements. "Urban travel and sustainable development" elaborates a three-tiered strategy emphasizing land- use and transport policies and the use of progressively higher fuel prices as an economic instrument to reduce travel demands. OECD has organized an International Conference on Sustainable Transport to be held in Vancouver in March 1996 hosted by the government of Canada and the Province of British Columbia. Conclusions and Policy Recommendations 39. Strict internalisation of all the external costs and benefits associated with transport is unlikely to be practicable, while remaining an important goal. However, policy should move in that direction by adopting appropriate economic and regulatory instruments. Combined with the provision of alternative transport options, substantial and steadily rising fuel prices could influence life-styles, design of vehicles, choice of location for residences and business, driver behaviour, choice of transport mode and trip length. 40. Greater international cooperation may also be needed. In view of the strong international competition on automobile markets, and the pressure of national manufacturers on their governments, effective action needs to be taken at international level to develop more effective and stringent regulatory frameworks, such as internationally agreed standards for air quality, motor vehicle emissions and fuel economy, at least among OECD countries. Similarly, fiscal and pricing mechanisms for restraining transport demand, especially fuel or energy taxes need to be implemented or co-ordinated at the international level. Further Information 1. Global Forum '94, "The Manchester Report: The Seeds of Change", June 1995. 2. Arnulf Gru"bler, "The transportation sector: growing demand and emissions, International Institute for Applied Systems Analysis (RR-94- 5), May 1994. 3. Government of Netherlands, Ministry of Housing, Spatial Planning and the Environment, "Government policy of the Netherlands on air pollution and aviation", June 1995. 4. Organization for Economic Cooperation and Development, Environment Directorate, "Synthesis report on recent OECD work and findings on sustainable transport" (ENV/EPOC/PPC/T(95)3), 9 November 1995. 5. Lee Schipper, Elizabeth Deakin, and Daniel Sperling, "Sustainable transportation: the future of the automobile in an environmentally constrained world", Spring, 1995. 6. United Nations Centre for Human Settlements (HABITAT), "Economic instruments and regulatory measures for the demand management of urban transport", Mimeo., September 1995. 7. , "Strategic options for public transport improvements in cities of developing countries", Mimeo., September 1995. 8. , "Urban transport demand management in European cities", Mimeo., September 1995. 9. , "Trade management experiences in Nordic cities", Mimeo., September 10. United Nations Development Programme, "Mararkech seminar on sustainable development of rural areas and decentralized electrification issues: recommendations on changing the scale and place of decentralized electrification processes in rural areas." 11. United Nations Development Programme, "UNDP initiative for sustainable energy", Mimeo., 12 September 1995. 12. United Nations Economic Commission for Europe, "Draft guidelines for a common strategy regarding transport and the environment" (ECE/RCTE/PC/10/Rev.3), May 1995. 13. United Nations Environment Programme, Industry and Environment Programme Activity Centre, "Transport and Environment", Industry and Environment Volume 16, No. 1-2, January-June 1993. 14. Michael P. Walsh, "Managing urban motor vehicle air pollution", mimeo, 20 October 1995. 15. World Energy Council, "Conclusions and recommendations of the 16th World Energy Council Congress," Tokyo, 1995.
This document has been posted online by the United Nations Department of Economic and Social Affairs (DESA). Reproduction and dissemination of the document - in electronic and/or printed format - is encouraged, provided acknowledgement is made of the role of the United Nations in making it available.
Date last posted: 3 December 1999 10:27:35