United Nations
Commission on Sustainable Development

Background Paper



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

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

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

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

             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

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

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.,

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.


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Date last posted: 3 December 1999 10:27:35
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