Improving Water Supply Services through Private Sector Participation in Cordoba (Argentina)

Transcription

1 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Improving Water Supply Services through Private Sector Participation in Cordoba (Argentina) Summary of the Practice Keywords: Public-private partnership (PPP), water concession contract Strategy: Improving urban environmental services through private sector participation Environmental areas: Urban environment Critical instruments: Organisational arrangements Country: Argentina Location: Cordoba Participants: Province of Cordoba, Aguas Cordobesas (private consortium) Duration: 30-year concession contract was awarded on 21 April 1997 (entry into force May 1997) Funding: Total investment program required in order to reach the coverage target has been estimated at around $500 million. Background: Argentina is a federal nation with three levels of government (national, provincial, and municipal). The municipality of Cordoba, the capital of the Province of Cordoba, encompasses the largest area of any major city in Latin America. It is 24 sq. km and supports the second biggest population in the country at 1,339,164 people (in 1999). The annual budget is U.S.$79 million with per capita expenditure of $59. Water supply in the city of Cordoba is a provincial responsibility, while sanitation is the responsibility of the municipality. According to the 1923 Constitution, water supply throughout Argentina was a municipal service but later this responsibility was transferred to a federal entity (OSN). In 1975, the federal government devolved responsibility for both water and sanitation from OSN to the provincial level. In Cordoba province, this was managed by a new entity (EPOS). However, in 1990 the provincial government transferred responsibility for sanitation to the Municipality of Cordoba, while retaining responsibility for the water supply. On April 21, 1997, due to a lack of public funding, the provincial government signed a concession contract with the private consortium Aguas Cordobesas to supply water for the city of Cordoba. The municipality took no part in the negotiations, although the area for the water concessions was confined exclusively to the jurisdiction of the municipality. Objectives: The objective of this public private partnership (PPP) to guarantee sufficient water supply through a concession agreement that included the following targets: Operate and maintain the 2,766-km pile network. Reach 97 percent water coverage by the end of the concession (Year 2026). Pay royalties to the provincial government both for water abstraction ($0.019/m 3 ) and for water transportation ($0.077/m 3 ). Reduce the average tariff by 8.2 percent at the start of the concession. Carry out an investment program of $150 million in the first two years. Description of the activity: 1. Privatisation Process In 1989, public sector borrowing 12 percent of the GDP, this was coupled with a severe financial crises and hyperinflation in December The government of President Carlos Menem initiated a major structural adjustment program designed to radically reduce the need for public sector borrowing through economic liberalization (tariff and non-tariff reduction), financial and economic deregulation (transport, ports, and postal service), currency convertibility for establishing parity 155

2 between the Argentine Peso and the U.S. dollar, and reform of the government, involving wholesale privatisation of state companies. The privatisation process had two important stages. During the first stage ( ), telecommunications and civil aviation were key sectors that were privatised. However, the state negotiated badly, failing to ensure competition, contract compliance, and the establishment of an adequate regulatory mechanism prior to the sell-off. During the second stage (from 1992 onwards), the gas, electricity, and water sectors were privatised. This time, however, there was a marked improvement in the negotiating capacity of the state, and regulatory frameworks were established prior to the sell-off. The privatisation was also moved to the provincial and municipal governments, as the Cordoba municipality prepared a strategy document for public sector participation in basic service provision. However, the provincial government did not devolve the water supply to the municipality, mainly due to financial considerations, as the concession contract could provide a substantial revenue increase in the form of royalties amounting to $13 million in Concession contract: Under this 30-year concession contract, Aguas Cordobesas would manage the operations of water supply and sanitation within the 24 sq. km jurisdiction of the Cordoba municipality. Aguas Cordobesas, owned by a consortium of Argentinean and foreign companies, has paid-up capital of $30 million with a French utility multinational, Suez-Lyonnaise des Eaux, as the largest shareholder and operator of the utility. The break-down of the shares is: Suez Lyonnaise des Eaux (France, Belgium) with percent; Aguas de Barcelona SA (Spain and 25 percent owned by Suez Lyonnaise des Eaux) with percent; Inversora Central SA (Argentina) with percent; Empresa Constructora Delta SA (Argentina) with percent; Banco de Galicia y Buenos Aires SA (Argentina) with percent; and Servicios del Centro SA (Argentina) with 6.67 percent. The total investment plan has been estimated at around $500 million, needed in order to reach the coverage target. From 1997 to 1999, the concessionaire carried out investments worth $84 million, including a $40 million, 10-year loan with a 3-year grace period, from the European Investment Bank (EIB). The loan represented 47 percent of the first five-year investment plan. 3. Tariffs: The current tariff structure is complex and inequitable, as both volume-based and propertybased charges combine to determine the tariff. All households pay the same basic charge, directly related to the size of their property, for a minimum volume as shown in Box 1. Box 1. Tariff structure under Cordoba water concession project. Property Size Monthly Minimum Consumption Up to 50 m 2 15 m 3 From 50 m 2 to 150 m m 3 per m 2 From 150 m 2 to 250 m 2 45 m 3 plus 0.25 m 3 per m 2 above 150 From 250 m 2 to 350 m 2 70 m 3 plus 0.20 m 3 per m 2 above 250 From 350 m 2 to 500 m 2 90 m 3 plus 0.15 m 3 per m 2 above 350 Above 50 m m 3 plus 0.10 m 3 per m 2 above 500 This approach has negative impacts on equity, as on the one hand the property-based basic charge is very regressive with regard to the size of the property, as larger size properties (wealthy individuals) are allowed more volume and therefore only a few rich individuals pay progressive tariff rates incorporated in the stepped tariff. On the other hand, even the consumers of excess water pay only mildly progressive tariffs, as properties are not individually classified according to their value, because high-value properties in lower band zones benefit and low-value properties in high band zone suffer from this arrangement. Another issue is metering, as the contract stated that metering would be gradually introduced and that new domestic connections would have meters installed. The concessionaire installed 5,000 new meters during ; however, in low-income communities no meters have been installed. The 156

3 concessionaire was not charging these low-income communities. Therefore, ERSEP was negotiating for the introduction of a so-called social tariff for these low-income communities at $5 per month. This would be a very cheap solution, as the communities were paying $30 per month for 6 m 3 to private vendors at the time. 4. Other Challenges: Some of the main challenges under this contract are: The coverage target is 97 percent; however, there are serious problems including land titling in poorer communities; however, the mayor has committed to grant land titles to the poor. At present, the municipality supplies water through tankers to the poorer communities for which apparently no charge is being made. There is no coordination between the municipality and Aguas Cordobesas on this issue. Some vendors supply low-quality water at high costs. There is a generally-agreed policy to gradually reduce the number of these vendors. However, the contract does not spell out specific targets. As a result of ERSEP s active involvement in the negotiations, 11 out of 44 vendors have been transferred to Aguas Cordobesas. According to the contract, the responsibility of the concessionaire is to construct the primary pipeline in the extending network only and the responsibility of constructing the secondary pipeline (defined as less than 160 mm in diameter) and residential connections are the responsibility of the municipality and/or the households. Many households in low-income communities believe that the concessionaire should construct the secondary pipeline. Future success in meeting the coverage targets depends upon the solution to this problem. Land use policies are not being properly implemented, as powerful real estate companies have influence over the direction of city growth. This increases the problems for the concessionaire when trying to plan according to land use plans. Critical Instruments Organisational arrangements When public-private partnerships for water supply contracts emerged in Argentina in the 1990s, the regulatory bodies were often established only after the key privatisation decisions were made. This approach resulted in major complaints about high price increases and poor service quality after the contracts went into effect. In one example, the Province of Tucuman in Argentina awarded a 30-year concession contract to Vivendi in The company doubled tariffs, after just a few months of operation, without improving water quality indeed; it became inexplicably brown. This led to a public protest, and 80 percent of residents stopped paying their bills. The new governor of Tucuman started a campaign that led to the cancellation of the contract in 1998, and resumption of water operations by the provincial government. Vivendi then filed a $100 million lawsuit against the government. In the year 2000, however, the government sought to encourage greater competition among privatised utilities by clamping down on what were seen as abuses of privilege by private companies that have benefited from the monopolistic conditions under weak regulation. Such a tightened stance was reflected in the province of Cordobesas, as it created the new Secretariat for Control and Management of Contracts, and water and sanitation became the responsibility of the Water and Sanitation Department. Another novel multi-sector regulatory agency, Ente Regulador de Servicios Publicos (ERSEP), was created to regulate a diverse range of privatised public services including those provided by Aguas Cordoba. This agency will be financed through a 1.5 percent levy on the tariffs of the privatised utilities as well as any fines that it imposes. The authority for ERSEP to impose fine made it controversial, as another agency in Buenos Aires, Ente Tripartito de Obras y Servicios Sanitarios ETOSS, is financed through a 0.67 percent levy on water bills. ERSEP contracts out the monitoring of water quality to a state-owned laboratory that examines 600 samples per month. ERSEP also monitors the implementation of the investment program of the concessionaire, Aguas Cordobesas. Therefore, it is unclear whether ERSEP will play a role of a 157

4 regulator to balance the interest of consumers and of the private concessionaire, or if it will play a role of contract enforcement on behalf of the provincial government. Impacts Following are the major outcomes until the end of 1999 for this concession contract: The citizens and the provincial government perceived the overall performance of the concessionaire as satisfactory. The coverage has increased from 1,000,000 to 1,140,000 inhabitants in two years ( ) with the number of connections increased from 208,526 to 223,462 during the same time period. Water production varied from 350,000 m 3 /day in winter to 440,000 m 3 /day in summer, totalling 140 million m 3 of distribution during Annual gross income was $65 million with a net profit of $5 million, representing a rise of 11 percent above 1998 profits. The concessionaire paid $9,922,000 for water abstraction and $3,149,668 for water transportation, totalling $13,071,668 in royalty payments. The staff numbers fell from around 1,300 before the concession contract to 436 in 1999, making a ratio of 1.95 staff per 1,000 connections. The concessionaire has provided three direct benefits to consumers, including an 8-percent price reduction in average tariffs, an end to water cut-offs, and improved water quality, leading to a sharp drop in the sales of bottled water. The indirect benefit is through annual royalty payments averaging $13 million to the provincial governments, which can undertake other development projects for the community. Lessons Learned It was found that a policy is needed about cutting the supply of water to customers if they do not pay their water fees. Aguas Cordobesas did not cut off the supply to the customers who have defaulted on their water bills. The company has started legal proceedings to obtain debts totalling $2 million from 2,500 customers (1.1 percent of total customers) who have refused to pay their bills since the award of the contract. The non-payment of the bills is not due to the question of affordability, but rather, to a long-standing and widespread practice of perceiving water as a free good. In negotiating water supply contract such as this, it is important to address the question of sequencing of the investment program. Under the terms of the contract, Aguas Cordobesas must achieve 97 percent coverage by The total investment required to meet this target has been estimated at between $400 million and $650 million. In contrast to a contract the consortium has in Buenos Aires, however, the Cordoba contract does not specify five-yearly coverage targets in the framework of the total period of the overall concession. This situation raises the risk of back loading, whereby the concessionaire postpones major investments until the end of the concession period. In this eventuality, the residents of low-income areas would be the main stakeholders that would suffer from delays in construction to the network. The separation of water supply from sewerage will make it difficult to optimise resources, including the protection of bulk water supply and tariff collection from the same consumers. The exclusion of the local government from the contract makes coordination a difficult task on various issues, as discussed above, where low-income communities will suffer the most. Potential for Application This type of public-private partnership experience can work well in countries that are not yet politically willing to go for higher levels of privatisation (as has been done in PPP projects in Manila). In the Buenos Aires case the ownership remains with the government. This type of arrangement, where the private sector has to pay royalties to the government ($13 million annually in this case), provides earnings for the government to supplement their budgets for other development work. This arrangement also improves efficiency by reducing the number of staff per water supply 1,000 connections (as mentioned here, to 1.95 staff per 1,000 connection in this case). This is an 158

5 important issue in most Asian countries; therefore, this experience can help these countries to reduce staff and improve the efficiency of public services. Overall, real price reductions are likely to occur in this type of arrangement, in contrast to the traditional (and sometimes erroneous) belief that a shift to private sector management will result in an increase in prices (in the Buenos Aires case, the actual result was an average 8 percent reduction in tariffs, as mentioned). Moreover, the quality and quantity of water also improves. Results such as these increases the potential for the replication of such experiences in the Asian region. ONDEO (Suez-Lyonnaise des Eaux) 18 Square Edouard VII, Paris cedex 9, France, Tel: , Fax: Homepage: Contact References Memon, M. A. (2002), Overview and Analysis: Kitakyushu Initiative Seminar on Public-Private Partnerships for Urban Water Supply and Wastewater Treatment, 4 th November 2002, Beijing Nickson, A (2001), The Cordoba Water Concession in Argentina, GHK Working Paper 44205, The University of Birmingham, London. Case reviewer: Dr. Mushtaq Ahmed Memon, Research Associate, Urban Environmental Management, Institute for Global Environmental Strategies (IGES), Kitakyushu Office mushtaq@iges.or.jp Information date: 3 April

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7 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Innovative ways to promote community-based composting in Dhaka Summary of the Practice Keywords: composting, community based, marketing, solid waste management Strategy: Community related initiatives for urban environmental management Environmental areas: Urban environment, Waste management Critical instruments: Awareness/capacity building Country: Bangladesh Location: Dhaka Participants: Waste Concerns (NGO), Local Communities, Map Agro Ltd. Bangladesh (fertilizer company), and PROSHIKA (NGO) Duration: Since 1995 by Waste Concern and a fertilizer company. Another NGO joined in Funding: Lion s Club provided 1,000 sq. m of land and UNDP provided the composting plant Background: The city of Dhaka covers an area of about 816 sq. km. The climate is tropical as in the rest of Bangladesh; for most of the year it is warm with bright sunshine, but during the monsoon season there is heavy rainfall. During the winter months (November to March) it is cool and pleasant. Typical summer temperatures range between 30 to 37 degrees Celsius while in the winter it is a lot milder, ranging between 10 to 20 degrees. Annual rainfall is about 250 cm and humidity is around 80 percent Of the total population about 55 percent of people live below the poverty line in Dhaka. Half of that figure lives in slums and squatter settlements. Within a decade, the slum population has risen to about 3 million. Access to water supply, sanitation, solid waste management, and other civic services is extremely limited. Land is scarce in Dhaka City. Only 360 sq. km of land is available to accommodate residences, offices, services and facilities for more than 5.4 million people. A huge and densely populated city, Dhaka faces an acute solid waste problem in comparison to many other cities in developing countries. The daily production of solid waste in Dhaka is more than 4,000 metric tons. Of this amount, 200 metric tons consists of hospital and clinical waste, which is a mixture of toxic chemicals, radioactive elements and pathological substances. 15 to 20 percent of medical wastes are highly dangerous for human health. This waste when disposed with other municipal waste in open dumps poses a serious health hazard to the people in the city. Due to a shortage of funding, resulting from having almost no direct user charges and a shortage of subsidies, as well as other institutional constraints, the local government has not been able to effectively collect and dispose of the waste properly. Most of the waste is visible on the streets and in drains. Sanitary landfills and other facilities like incineration are almost non-existent. A non-governmental organisation known as Waste Concerns took the initiative to promote community-based efforts for primary collection of waste as well as to encourage composting, in order to reduce the quantity of final waste disposal. Objectives: To create public awareness for waste management. To provide motivation by providing cash to communities that sells the compost. To integrate the private sector with communities for improving the quality of compost and to provide marketing at the national level. To reduce the quantity of overall solid waste resulting in lower expenditures for local government to collect and dispose of solid waste. 161

8 Description of the activity: 1. Initial Efforts: The composition of waste in developing and developed countries is quite different, but if recyclable materials (including organic waste for composting) is separated out then the final volume of waste can be reduced by 60 to 80 percent. This was the understanding of a research-based NGO, Waste Concern, which used the slogan of waste is not waste, waste is a resource to motivate communities in Dhaka to compost organic waste and earn money. Waste Concern studied the potential for composting in Dhaka, where municipal solid waste amounts about 3,000 metric tons per day. Moreover, they also studied the informal sector, which is recovering recyclable solid waste. Their findings suggested that 15 percent of the total waste is being collected by 87,000 people in the informal sector. They are mainly collecting recyclable materials, leaving behind still a large amount of organic waste, which has the potential for composting and for generating economic activity, besides reducing pressure on the collection and disposal of waste. Composting is not a new activity and has been tried in many cities in developing countries, but it has so far in Dhaka failed to make a difference either in reduction of the total waste by a substantial amount or for generating a popular economic activity. This was mainly due to inappropriate approaches towards demand and supply equilibrium. In many cities where composting was attempted, either the supply side was not efficient, as composting was not conducted intensively and there was a lack of quality control of the composted material, or there was low demand for compost due to the location and nature of agricultural activities. Hence, Waste Concern studied carefully the supply and demand aspects and outlined a good framework to carry out composting activities. First, they argued for decentralized composting. Initially, the local government was not convinced by their proposal, due to unsuccessful previous experiences with composting, and did not have a piece of land available to carry out composting. But Waste Concern argued that a decentralized composting system would be (1) labor intensive and less costly compared to a centralized one; (2) wellsuited for the city s waste stream, climate, social, and economic conditions; (3) low cost due to readilyavailable local materials and the use of low-cost technology; (4) an improvement for community participation in waste-source separation; a (5) way to reduce the volume of solid waste at the source more effectively; and (6) a way to enhance income and job opportunities for the poor, socially deprived informal workers and small entrepreneurs of the city. 2. Pilot Project: Waste Concern initiated the first pilot project in 1995 with the help of the United Nations Development Programme and the Lions Club on a 1000 sq. m piece of land. On the demand side, they conducted a detailed survey of the farmers, which revealed that there is a good demand for compost in Dhaka and in adjoining areas, as 94 percent of the farmers were willing to buy compost. The survey also revealed that the farm yields had decreased over 10 years due to excessive use of chemical fertilizers, and that the content of organic matter in the soil was less than 1 percent (compared to the critical level of 3 percent). Hence, it appeared that compost could provide a buffer effect as a protection against the large-scale application of chemical fertilizers. To improve the supply side, a door-to-door solid waste collection system was introduced by Waste Concern to collect the domestic organic waste (free from toxic and clinical wastes). This collection rose to two tons of solid waste per day with the help of modified rickshaw vans. The numbers of households participating also started rising, which are paying about TK 15 per month. Waste Concern tried two different techniques for composting: aerobic (Indonesian), and anaerobic (Chinese). The best technique would be chosen based on these criteria: least capital-intensive; proximity to urban residential areas; minimum nuisance from odors and flies; produces an environmentally safe product; and suited to Dhaka s waste stream, climate, and socioeconomic conditions. The Chinese Covered Pile System was not found to be appropriate for community-based projects due to a problem with odors, although it may be viable for large and remotely located dumpsites. The aerobic Indonesian Windrow Technique was viable for community-based projects although it produced some odor when the windrows are turned, that odour is considered to be tolerable. The nutrient concentrations of both composting methods are shown in Table

9 Table 1. Comparative analysis of nutrient concentration by two composting methods. Compost method p h Nitrogen (%) Phosphorous (%) Potassium (%) Sulphur (%) Aerobic (Indonesian) Chinese Source: Enayetullah and Sinha (2000). 3 Process The process of composting using the aerobic method involves the collection and sorting of solid waste in the resource recovery (composting) plant located within the community. Next, organic waste is heaped into piles under a shed to provide shade, which allows the beneficial microorganisms to decompose the organic waste efficiently. The shed also protects the compost workers from rain and heat of the sun. Pile temperatures of 55 to 65 degrees Celsius are optimum for aerobic composting. To enable microorganisms to obtain sufficient oxygen, the pile is aerated using bamboo aerators. In tropical countries, the piles are liable to reach excessively high temperatures. Turning over the pile along with the use of bamboo aerators is the method used to maintain the pile temperature. Turning associated with watering facilitates rapid decomposition and also moves the non-decomposable materials from exterior of the pile into the interior, thus providing a new food source for the bacteria. The temperature of the pile determines when to turn. The temperature is monitored and records are kept of the temperature trends. A carbon-to-nitrogen ratio of between 35 and 50 is optimum for aerobic composting, but the ratio is slightly higher (carbon 22.6 percent and nitrogen 0.41 percent) in Dhaka. In this project, chicken and cattle manure is used to optimize the nitrogen content and also to overcome the deficiency. Sawdust is also mixed with the waste to increase air spaces, enabling proper aeration and reducing the bulk weight of the compost mixture. This process has very little odor and it requires 40 days for decomposition and 15 days for maturing. After maturing the compost is screened for different grades and packed for marketing. Recently, Waste Concern has been trying to reduce the decomposition time of 40 days by using inoculums (compost digester) to accelerate the decomposition. At present, 500 kg of compost is produced every day by processing two tons of solid waste, with the help of six female workers of informal sector. In the plant, areas are demarcated for waste delivery and residual removal, active composting, maturing, screening and bagging area, a store room for bagged compost, facilities for storage of equipment and personal items of workers, and an office. In addition to these facilities, separate space is earmarked for demonstration of organic farming. Generally 50 to 60 percent of the total site area is used for compost piles, approximately 15 percent for sorting and residue removal, another 15 percent for screening and bagging of compost, and 15 percent for storage and office facilities. 4. Marketing Waste Concern has developed a good network with nurseries and fertilizer marketing companies to sell their compost at a price of TK 2.5 to TK 5.0 per kg. The quality of compost is monitored in the laboratories of Soil Sciences Department of Dhaka University. Table 2 shows the nutrient value of the compost produced by this plan in comparison with the other compost. Table 2. Comparative analysis of nutrient concentration in compost. Compost produced p h Nitrogen (%) Phosphorous (%) Potassium (%) By original Indonesian method In international market By Waste Concern Source: Enayetullah and Sinha (2000). 163

10 5. Innovation The composting (demand and supply) discussed above is considered as a conventional approach with limited impact on the overall solid waste management and economic activities. After attaining stable operations under this conventional approach, Waste Concerns, started to work with more communities and motivate them to carry out their own composting activities. Waste Concern also improved the quality of their compost over time with the help of scientists from a university and was able to raise the nitrogen, phosphorous, and potassium nutrient content to 2.1, 4.0, and 2.6 percent, respectively. In addition, the increased output of compost required greater demand in order to balance supply and demand. To respond, Waste Concern also coordinated between the communities and the original buyers (nurseries and fertilizer shops in Dhaka) to buy the compost produced at the community-based plants. The most innovative parts of this composting initiative are the enrichment of the nutrient and countrywide marketing/sale of the compost. This became possible when Waste Concern signed a partnership agreement with Map Agro Ltd. Bangladesh, a fertilizer marketing company, which purchases compost in bulk and markets it after enriching the compost according to crop and soil requirements. Map Agro operates the Nutrient Enrichment Organic Manure Production Plant at Uttara, Dhaka, where they enrich compost, which they buy at the price of TK 2.5 ($0.046) per kg and sell, after enrichment, at a price of TK 6 to TK 8 ($0.11 to $0.148) per kg in open market. Map Agro has already invested TK 2.5 million ($46,296) in the plant. The success of their compost and marketing raised the demand to 10,000 metric tons, compared to the 500 tons being produced by Waste Concern. Another important innovative part of this initiative is an agreement with PROSHIKA, one of the largest NGOs in Bangladesh, to sell the compost. PROSHIKA supplies the compost to farmers in rural areas adjoining Dhaka, who produce vegetables using only compost without adding any chemical fertilizer (organic farming). PROSHIKA then purchases all the organic vegetables and sells them at three centers in Dhaka. Critical Instruments Awareness/capacity building Actions and not the Sermons Work Well for Motivation Waste Concern started a public awareness campaign to promote the separation of organic waste at source and announce the payment of TK 15 to 60 per month for door-to-door collection, based on a survey conducted with the help of the Goethe Institute in Dhaka. They developed posters and training programs for public awareness. This initiative slowly started picking up momentum and produced two visible outcomes: success with the house-to-house collection system by community-based organizations, and separation of waste at source, mainly of organic materials for compost. The awareness started growing as the news spread about possible earnings from compost. Some communities started their own small compost plants, where six households combine their organic waste for each composting drum. After, the waste turns into compost, the households can sell this to Waste Concern to earn some money. Moreover, as the demand for compost got stronger with the help of Waste Concerns, as discussed above, more households became willing to take part in waste separation and composting. This local initiative also increased the awareness of farmers about the benefits of compost, the awareness of the private sector about enriching and marketing the compost, the awareness of civil society about providing support for door-to-door collection and assisting in composting, the awareness of academia to conduct research and strengthen various aspects like community-based initiatives for solid waste management, and finally, the awareness of the local government to improve its waste collection and disposal methods and to assist in composting by providing the land needed. Impacts These innovative ways have given composting a new dimension to make a real impact on solid waste management, as demand exceeds the supply, and also to generate various economic activities in the various sectors along with protecting the soil for higher agricultural yield. 164

11 The most important outcome of this success is the partnership between the local government and communities for effective solid waste management. Now DCC is in negotiations to a acquire a piece of land at the landfill site for composting. It is evident that communities can apply pressure on governments, not only through protests, but also by showing their successful efforts. This approach facilitates a triangular partnership among public bodies, the private sector, and communities. The impacts of this project are being many. A few factors are critical here. First, what is the cost of extracting recyclable materials from Dhaka s municipal solid waste left over by scavengers? Second, how much compost can be sold in the market at prices that cover the production costs and provides a normal rate of profit? Finally, what are the intangible benefits? The reduced costs to the local government due to reduced quantity of waste should also be considered. Table 3 shows fixed costs, operational costs, and earnings of this plant. In this analysis, the cost of rent of the land is not included (it is quite high in densely-populated Dhaka) and fixed capital is assumed to have a life of 5 years. The net earnings are TK 317,000 per year. Hence, the net present value (NPV) at a 16 percent discount rate is TK 456,682. Table 3. Fixed cost, operational cost, and earnings from the compost. Fixed Costs (U.S.1 = TK50) Item Taka US$ Construction of composting shed with 268,200 5,364 drainage facility of 2,235 sq. TK 120/sq. ft. Construction cost of sorting platform with 45, shed of 375 sq. TK 120/sq. ft. Construction cost of office and toilet facility 50,000 1,000 of 100 sq. TK 500/sq. ft. Purchase of 3 rickshaw TK for 45, each Water and electricity connection 50,000 1,000 Equipment for composting, and work wear for 50,000 1,000 workers Total fixed costs 508,200 10,164 Operational costs (per year) Salary of six TK 1000/month 72,000 1,440 Salary of two van TK 1500/month 36, Salary of four waste TK 24, /month Salary of plant TK 5000/month 60,000 1,200 Water and electricity bill 5, Raw material for compost 12, Total operational cost 209,000 4,180 Earnings (per year) Sale of compost 500 kg from processing 2 400,000 8,000 tons of solid waste per day for 320 TK 2.5/kg Charge for house to house waste collection 126,000 2,520 services TK 15/household/month from 700 households Total earnings 526,000 10,520 Source: Enayetullah and Sinha (2000). 165

12 Other benefits: The main benefit for the local government, Dhaka City Corporation (DCC) is a decrease in waste management cost by reducing the huge volume of solid waste. It is estimated that a small compost plant like this with a three-ton capacity can save DCC TK 897,900 ($17,958) per year (based on average solid waste management cost, including collection transportation and final disposal, at TK 820 per ton). This plant can also reduce the need for 1,095 sq. m of landfill area per year. Other benefits include the improvement in the overall environment of neighborhoods by reducing the illegal disposal of waste on roads, in drains or in vacant lots, as solid waste is collected directly from households; generation of employment for the poor, especially women; new prospects for small-scale entrepreneurs to take part in the recycling business; the return of organic matter to the soil; and the minimization of the use of chemical fertilizers. Lessons Learned First, for success the practice requires that planners have an understanding of all actors, issues, efforts, and outcomes. Next, an in-depth analysis can highlight the keys to successful efforts and their potential for replication. This paper has presented a comprehensive scenario for Dhaka City and its solid waste management by all the major actors, including local government and civil society. As this case suggests, the local governments often face institutional, regulatory, and financial constraints, but innovative and community-driven projects can reduce the amount of solid waste destined for final disposal, and these projects can also provide the political impetus for the local governments to cooperate and encourage such community initiatives. Potential for Application This success story is can be adapted widely many developing countries. It can be divided into various parts, which can be replicated not only for composting or solid waste management, but also for many other environmental issues in urban areas of developing countries. First, community-based approaches and public awareness are important factors for any initiative. Community initiatives are not always guaranteed to be successful, but they do motivate communities to come up with new ideas, as Waste Concern came up with the idea of composting when door-to-door collection failed to produce major positive impacts. Second, initial efforts should be made to establish the conventional techniques. Later, innovate new techniques can be tried in this study, enrichment and marketing of the compost. This approach also requires the actors to explore new partnerships and ideas and try to achieve intensive involvement of the private sector and other civil society organizations, if the public sector is not responding adequately to problems. Third, the public sector responds if communities or the private sector make an effort and create success stories to improve public consensus and pressure on local governments to take positive action. In summary, this story could be replicated not only for innovative approaches in composting to improve solid waste management, but also for other challenges, including wastewater, air pollution, and so on. Contact Waste Concern, House 21 (Side B), Road, Block G, Banani Model Town, Dhaka 1213, Bangladesh Tel: , Fax: , wasteconcern@dhaka.agni.com; waste@netnbd.com Homepage: 166

13 References Memon, M A (2002), Solid Waste Management in Dhaka, Bangladesh: Innovation in Community Driven Composting, September 2002, Kitakyushu. Sinha, A.H.M.M, Enayetullah, I (ed.) (2000), Community Based Solid Waste Management: The Asian Experience, Waste Concerns, Dhaka. Case reviewer: Dr. Mushtaq Ahmed Memon, Research Associate, Urban Environmental Management, Institute for Global Environmental Strategies (IGES), Kitakyushu Office mushtaq@iges.or.jp Information date: 4 April

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15 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Integration of Land Use and Bus System in Curitiba, Brazil Summary of the Practice Keywords: land use, bus network transit Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Climate change, Air pollution, Urban environment Critical instruments: Design, planning and management, Economic instruments, Organisational arrangements, Technologies Country: Brazil Location: Curitiba Participants: city government; research and urban planning institute (IPPUC); public transportation corporation (URBS), private bus operation firms 5 Duration: ongoing Funding: Work based on the Master Plan in 1965 was financed by the Development Company of Paraná and by the Curitiba municipal government s Department of Urban Development. Operation of the bus system is financed completely by bus fares, without any public subsidies. The north-south Bi-articulated Bus Line project (approved in 1995) was financed by the Inter American Development Bank, the private sector, and the Municipality of Curitiba. Background: Curitiba is the capital of the state of Paraná. It is located in southern Brazil and has an area of 432 square kilometres (279 sq. mi.). The city s population in 2000 was 1,586,848, with a metropolitan region population of 2,725,629. The Gross Domestic Product in 1996 was U.S.$15,393 million for Curitiba and U.S.$17,910 million for the metropolitan area of Curitiba. Curitiba s GDP per capita in 1996 was U.S.$9,750, about twice the national level (U.S.$4,889). The first urban plan for the city was developed in 1943 by Alfred Agache, a French urban planner. The plan assumed the dominance of the automobile and the principle approach was massive infrastructure investments, including construction of circular boulevards and major radial arteries. Due to financial difficulty in carrying out Agache s plan and the pressure of rapid population growth, the plan for the city s urban development was reconsidered and the principal directive of the Preliminary Plan of 1965 (subsequently known as the Master Plan) was developed. The idea was to develop the city along linear roads in order to increase the efficiency of circulation and the distribution of services. It proposed infrastructure investment in an organised fashion, and planners hoped to facilitate the city s lagging urban development. The transit system began to operate in 1974, when architect Jaime Lerner was the Mayor of Curitiba, and has evolved since then. Objectives: The Master Plan for Curitiba has the objective of adapting the zoning and land-use requirements to the socio-economic and territorial development of the city. Description of the activity: The transportation system in Curitiba is highly integrated with Land Use and the Road System. The key concept is the structural axis, the physical form around which the development of the city and its transportation network is organised. Land Use: The highest levels of residential and commercial development are concentrated in the two blocks at the centre of the spine, with diminishing densities in the blocks to either side, thus preserving large areas for low-rise residential development in the sectors between axes. 169

16 (Source: IPPUC homepage) Road System: The three-part road system of each axis is made up of one central street with exclusive lanes for efficient public transportation and slow local access traffic lanes with parking. To either side of the central street are one-way arterial streets of traffic (express lanes) headed into or away from the downtown area. This road system was created through a re-definition of the existing streets, not by resizing the streets or constructing overpasses. (Source: IPPUC homepage) Mass Transit: Since 1974, an express bus system, called the Integrated Transportation Network, has been operational in Curitiba. It links downtown to the neighbourhoods through exclusive traffic lanes. The lanes enable a considerably higher average bus speed, without jeopardizing passenger safety. There are now 58 km of exclusive bus lanes which crisscross the city along its north, south, east, west and southwest axes. The great axes are complemented by 270 km of feeder routes and 185 km of inter-district routes, servicing about 65% of the urban area. If added to the conventional routes, Curitiba s urban transportation system covers the entire municipal area, integrating its network with 10 cities of the Metropolitan Region. (Source: IPPUC homepage) Critical Instruments Overview Curitiba s transport system is innovative in design/planning in that it introduced an all-bus network transit system. Its success was also determined by innovative instruments in its operation: economic 170

17 instruments such as single-fare public transport and payment per kilometre; institutional arrangements; and technology components, including tube stations and bi-articulated bus. Design, planning and management All-Bus Network Transit System Curitiba s transportation network is made up exclusively of buses and succeeded in providing excellent access and mobility. The two features essential for the success of this all-bus network transit system are (1) reliable high-capacity buses running along trunk lines on the structural axes where the greatest population lives and works, featuring exclusive lanes with a limited number of cross streets, signal pre-emption, high platforms for entry and exit, and pre-paid boarding; and (2) a complementary network of colour-coded feeder and express buses, all with free transfer, providing dense coverage of the entire city. Economic instruments Single fare of public transit Until 1979, the fares of the bus transit system reflected the operational cost of each line separately. Because they were less lucrative, the longer lines had higher fares, posing high costs for the lowincome population located at the periphery of the city. Since 1979, with one single fare reflecting the cost of the entire system, persons commuting long distances (often the low-income population) are subsidized by those making shorter trips. Besides being socially just, the single fare facilitated the implementation of fare integration between different companies. It is estimated that around 80% of users benefited by the integration. Payment per kilometre The bus system is organised by URBS (Urbanization of Curitiba S/A), the public transportation corporation, and 16 private companies are sub-contracted to operate and maintain the buses. In 1986 the operating companies, which until then had received income directly from their passengers, changed to a system whereby they were paid per kilometre. The municipal government collects detailed operational information (fleet, timetable, kilometres run, etc.), audits the implementation, collects income received daily from the whole system, and pays the operators for services rendered in real costs. Detailed regulations establish the rights and obligations of the operating companies, define the faults and penalties, and seek to eliminate waste while constantly improving the quality of service. This arrangement ensures the fair distribution of income among operators and prevents unhealthy competition among drivers over specific routes. Organisational arrangements Function of auxiliary branch An auxiliary to the city s executive branch of government, the Curitiba Institute of Urban Planning and Research IPPUC (Instituto de Pesquisa e Planejamento Urbano de Curitiba) was responsible not only to plan, but also to test solutions. This dual responsibility has been central to its success. Due to the dual responsibility, new plans are generated, accepted by the community, and put into practice quickly. The population began to trust the ideas of the Institute, and this trust has largely been responsible for changes in the mentality of the city s inhabitants. The community began to believe in the IPPUC and to support its ideas of urban transformation, to suggest improvements and to demand modifications. Technologies Tube Stations The Tube Station, started in 1984, is a bus platform elevated to the level of the entrances/exits of the bus, where automatic doors operated by the tube conductor open parallel to the bus doors. Passengers pay an entrance fare at the turnstile and wait for their respective direct or express bus to pass. Disembarking passengers leave the stations through a direct exit. The Tube can allow controlled access and safe and secure embarkation. The establishment of the Tube Stations guarantees that the bi-articulated buses (see below) have the necessary operational conditions to 171

18 support (with more vehicles) the growth in demand predicted for the next 12 years. The embarkation time fell to one-eight of what it was before these facilities were introduced. (Photo by Mr. Masato Koto, Mets Research &Planning, Inc) Bi-articulated Bus (Surface Metro) The bi-articulated bus has a large capacity (270 passengers) and travels in an exclusive lane. It has no steps or fare collection and use the Tube Station for passenger embarking and disembarking. The first line was implemented in December 1992, with 33 vehicles carrying 100,000 passengers per day on the south-west axis. Due to the system design with special lanes, prepaid passenger boarding and the priority the buses receive in road hierarchy, the bus system can operate with a much higher capacity than traditional city bus systems. In terms of cost-effectiveness, the biarticulated bus system in Curitiba is very effective with the cost of U.S.$3 million per kilometre to construct compared with U.S.$8-12 million per kilometre for a tram system and around U.S.$ (Photo by Mr. Masato Koto, Mets Research &Planning, Inc) million per kilometre for a subway. The new system offered riders greater comfort, and operating costs fell 6% lower than the previous fleet. Impacts The Integrated Transportation Network promoted the use of public transport and reduced the use of private cars. Around 1.9 million passengers use the bus transit system daily with an 89% user satisfaction rate. By 1999, 31,000 new users have been attracted to the Direct lines since 1991 and 10,000 attracted to the Bi-articulated Express lines since This amounts to a diversion of 41,000 auto trips to transit, indicating that almost 9% of the automobiles in the city are now staying in their garages. This change will reduce congestion, fuel consumption, and air pollution, and result in a better environment for the entire population. Actually, Curitiba has shown one of the lowest levels of ambient air pollution in Brazil. This reduction in automobile use is seen regardless of the fact that Curitiba has among the highest household incomes and the second-highest automobile ownership rate in Brazil. Lessons Learned A low cost metropolitan transport system is achievable. By utilizing the existing corridors and adopting measures to intensify development along these corridor roads, public transport systems can be established at relatively low cost. This low-cost public transportation system showed the ability to more quickly and more effectively serve an entire metropolitan population. 172

19 The integration of land use, road systems and mass transit is a powerful tool. Through the use of land-use instruments, local governments can direct population growth and thereby establish effective systems of transportation. Vision, leadership, and flexibility lead to success of urban planning. Curitiba is one of the few cities that realized its urban plan. The factors of Curitiba s success are these: a clear long-term vision, strong leadership to implement the plan, and flexibility in adjustments by utilizing a step-by-step approach. Potential for Application The all-bus transit strategy in Curitiba has been applied in other Latin American cities such as Bogota (Columbia) 1 and Quito (Equador) 2. This strategy might be applicable in moderately sized but highly congested cities around the world. It might also be an integral part of a much more complex metropolitan network, providing efficient feeder service to, and extensions of, a rail transit system. In application, we need to note that (1) the strategy was initiated when auto ownership was low, public transportation needs great, and prior to the traffic congestion that was anticipated with an exponential growth in population; and (2) it is important to balance the overall project and it will not work unless individual sectors are fully inter-linked. Contact IPPUC (The Research and Urban Planning Institute of Curitiba) Rua Bom Jesus 669 Cabral-Curitiba-Paraná Brasil CEP Tel: , Fax: ippuc@ippuc.org.br URL: URBS (Urbanizacao de Curitiba S.A.) Jardim Botanico Curitiba Paraná Brasil CEP Tel: (55-41) , Fax: (55-41) urbs@bsi.com.br References City of Curitiba (2002) Economic Development of Curitiba. < Nieri, Lucas (2000) Socio-Economic Characteristics of Curitiba: Planning for change through the Integration of Land Use and Transportation. in Urban Public Transportation Systems. American Society of Civil Engineers. Ceneviva, Carlos (2000) Operation and Use of the Integrated Public Transportation Network of Curitiba, Brazil. in Urban Public Transportation Systems. American Society of Civil Engineers. ICLEI (International Council for Local Environmental Initiatives) (1991) Curitiba - Land-Use / Transport. ICLEI Case Study number 2. 1 Refer to the practice, TransMilenio Bus Rapid Transit System of Bogota, Colombia 2 Refer to the practice, The Electric Trolleybus System of Quito, Ecuador 173

20 European Partners for the Environment (1999) Private and Public Transport, Mobility, Communication and Urban Issues, The EPE Workbook Series for Implementing Sustainability in Europe. City of Curitiba (2002) Transportation of Curitiba. < Newman, Peter and Jeffrey Kenworthy (1999) Sustainability and Cities: Overcoming Automobile Dependence. Island Press, Washington DC. Kruckemeyer, Kenneth E. (2000) CURITIBA: An International Perspective of the City s Bus Transit Network. in Urban Public Transportation Systems. American Society of Civil Engineers. Development Bank of Japan (2002) Curitiba Ecocity: personal Reflections on The Most Liveable City in South America. Freiberg, Lars (2001) Innovative Solutions for Public Transport; Curitiba, Brazil. Sustainable Development International. Edition 3 p Fumihiko Nakamura (2002) An analysis of urban development of Curitiba city from the viewpoint of Compact City, Traffic Engineering, Vol.37 Special Edition (Japanese) Case reviewer: Dr. Naoko Matsumoto, Research Associate, Institute for Global Environmental Strategies (IGES); n-matsumoto@iges.or.jp Information date: 4 December

21 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Development of the public transport system in Beijing Summary of the Practice Keywords: Mass rapid transport system (MRTS), urban transport, transport network Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Air pollution, Urban environment Critical instruments: Design, planning and management, Economic instruments, Organisational arrangements Country: China Location: Beijing Participants: City government; Urban Research and Planning Institute Duration: 1998 ongoing Funding: Beijing municipal government, commercial investment Background: The city of Beijing suffers from some of the worst air pollution in the world. Since the 1980s, increasing emissions from urban transport have been making the situation worse. In recent years, the content of air pollution has shifted from the primary pollutant of sulphur dioxide (SO 2 ), from burning coal, to the transport-related primary pollutant, nitrogen oxide (NOx). Over the last decade, the passenger capacity of the public transport system has gradually dropped (Table 1). In 1998, the rail-based mass rapid transport system (MRTS) was only 44 kilometres long; in 2001, it was still only 56 kilometres, much lower than that in similar international cities, such as Paris, Seoul, Tokyo, Moscow, and New York. At the same time, the use of personal transport has grown rapidly. In 2001, the share of private automobiles in total vehicle stock was 67.9 percent, an increase of 21 percent since This rapid growth has caused many problems, including low transport efficiency, congestion, and serious pollution. Table 1. Share of transport demand in Beijing (%) Public transport (%) MRTS (%) Personal transport (%) Note: Public transport refers to transit buses and subway; personal transport refers to private vehicles, bicycles, and vehicles owned by social organizations and companies. Source: Energy Research Institute (ERI), Asian Institute of Technology(AIT) report, These problems are caused mainly by rapid growth in the use of personal transport and the slow progress in developing public transport, especially the MRTS. In view of growing passenger demand, the low efficiency of current transportation modes, and strict environmental requirements, the Beijing government decided to focus on developing a public transport plan for the new century, and launched a detailed project with a focus on the MRTS. In the near future, the construction of a rail-based mass transport system is expected to greatly contribute to alleviating some of the city s problems. Beijing s bid to host the 2008 Olympics has added to the project s urgency and importance. 175

22 Objectives: Create a good transport system in time to host the 2008 Olympics. Improve the efficiency of urban transport in Beijing and create a service favored by the public with a well-constructed public transport system. The target by 2008 is that 60 percent of people s daily trips will be met by the public transport network, 20 percent by bicycles, and the remaining 20 percent by private transport. By then the MRT will meet 33 percent of public transport demands, and by 2020 the share would increase to 55 percent. Description of the activity: There was rapid development of the public transport system in Beijing during the government s Ninth Five-Year Plan ( ). By the year 2000, the number of passengers carried by public transport reached billion people, accounting for 33.5 percent of total passenger traffic. The number of buses increased from 4,452 to 10,077 from 1995 to 2000, the number of bus routes grew from 260 to 422, and the total distance travelled went from 3,938.6 to kilometres. Subway construction has been stepped-up in Beijing s downtown area. Over the next ten years, according to the plan, the length of rail lines will be extended by 40 kilometres per year, with an investment of over 10 billion RMB (U.S.$1.2 billion)) each year. 1 Before the 2008 Olympics, eight new MRTS routes will be built (Table 2). By 2008, the total length of subway lines in the downtown area will be about 250 kilometres long. Combined with the MRTS in the suburbs, the total length will total 300 kilometres. Table 2. Plan for MRT lines in Beijing by Subway route Length (km) Status No.1 and No.2 56 In service No In operation January 2003 No Under construction Ba-tong line 19 Under construction No Under construction Olympic line 4.0 Under construction Yizhuang line 26 Under construction Airport line 22.0 Under construction No Under construction Total 251 By the end of 2010, 13 subway lines and 2 extension lines are planned, and the total length of subway will be up to 408 kilometres. By the end of 2020, the downtown area will have 20 subway lines, totaling 700 kilometres. An additional 360 kilometres of the MRTS will link the central downtown core with the 14 satellite towns located on Beijing s outskirts and suburbs of the city, including light rail lines, suburban railways, tram lines, and magnetic suspension railways. For the non rail-based public transport system, the focus over the next seven years is to optimise the transportation network. With the downtown area as the centre and radiating out to the suburbs and residential areas, the final network will be highly accessible, rapid, and convenient. By 2008, the fleet of transit buses will number 18,000 (from about 10,000 now) with 650 public transport lines. Critical Instruments Overview The development of a public transport system is a project that requires the integration of city planning, technology development, and public involvement. 1 The official currency in China is the Renminbi (RMB or CNY). One RMB = U.S.$ / 1 U.S.$ = CNY. 176

23 Design, planning and management Public transport planning The development of a public transport plan is a part of city planning, and a good design is critical. In order to develop a better system, the Beijing government invited research institutes and a planning agency to participate in the design and planning stage, with public transport as its top priority. Investment bidding system The municipal government of Beijing has invited international bidding on work to modify its existing MRTS construction plan the first time for urban transport planning in the history of China. The government has already modified its MRTS construction plan several times to keep pace with the development trends of the local economy, society, and environment. Only a scientific and foresighted MRTS development, integrated with the much more complex overall planning of the city, will guarantee a sustained and stable development of the MRTS. Economic instruments Involvement of the public in price-setting The fare price of public transport is a topic that has long been discussed in Beijing. Now, the price for bus and subway is decided based on cost, but the public can join in on the process. Newspapers helped publicize the discussion and public meetings were held when the new price was set. Organisational arrangements Introduction of competition In order to promote public transport, the Beijing government decided to reform the operation system for buses. Before 1996, the bus system was operated solely by the Beijing Public Transit Company, controlled by the government. After that, other companies were allowed to offer bus service, including the Beijing Bus Company and Yuntong Company. This shift allowed more buses to connect-up with suburban areas, operated by various county-level transport companies. This move introduced competition and provided improved service to the public. The Beijing municipal government has established a joint venture with a Swedish company that will introduce advanced subway-shield construction equipment for the city s subway construction. Another option for reducing construction costs is to construct overhead light railways or isolated surface railways outside of the No.3 Ring Road in Beijing, instead of an underground subway. Impacts The public transportation system will be significantly extended (Table 3). Table 3. Public transportation in Beijing (km) 2000 (km) Length of the MRTS Vehicle stock of transit buses (thousands) Operating routes (buses) Bus passengers (billions) Air quality has improved. Even though it is difficult to accurately measure the contribution of public transport in air quality improvements, some gas concentrations closely related to vehicle type, such as carbon monoxide (CO), have decreased over the last few years (see Table 4 and Figure 1). Downtown traffic congestion has eased. It now takes commuters only half an hour to cover the same distance by subway that used to take one and a half hours by bus. As a rapid, convenient, and 177

24 reliable transport mode (being isolated from other surface transport systems), the MRTS has enlarged traffic capacity and, consequently, reduced the costs of congestion in the downtown area. This has helped the central downtown function more fully as a service center of production. As an efficient and clean means of transportation, the MRTS has displaced other modes, and consequently reduced oil consumption and air pollution improving the overall environment for the entire urban population. Economic development has grown along the MRTS line. By linking the exurb areas to the central downtown, the MRTS has helped the city extend and radiate its influence throughout the peripheries, which has expedited more balanced development between the outskirts and the downtown area. The deterioration of air quality slowed after 1998, as shown in Table 4 and Figure 1. Although the vehicle stock in Beijing has increased rapidly since, concentrations of NOx and CO have not risen correspondingly. In fact, their concentrations have dropped by 16.4 percent and 21.2, respectively, over the same period. Table 4. Average daily concentrations of NOx and CO and vehicle stock in Beijing NOx (µg/m 3 ) CO (µg/m 3 ) Vehicle stock (millions) Source: Energy Research Institute, NOx (µg/m3) Vehicle stock (million) Year Figure 1. Average daily concentrations of NOx and vehicle stock in Beijing Lessons Learned For cities with plentiful supplies, using natural gas-powered vehicles (NGV) is a good choice for reducing emissions of NOx, CO, and particulate matter (PM), compared with gasoline-powered vehicles. NGVs produce higher methane (CH 4 ) emissions, however, compared with conventional vehicles, and more CO 2 than efficient diesel-powered vehicles. Other shortcomings of NGVs include high initial cost, heavy deadweight, short range, and safety problems. MRTS construction requires good long-term planning. In order to create a well-designed subway transport system, municipal governments should draw-up subway blueprints based on detailed feasibility studies, with priorities on regional economic development and environmental protection. The toughest problem facing the development of the MRTS is its high construction cost and astronomical investment required. There are two ways to settle the problem: one is to lower construction costs through institutional and technological innovation; the other is to raise funding through innovative financing. 178

25 Potential for Application Developing public transport is the only wise choice available to large cities in China and other Asian countries; otherwise environmental problems and traffic congestion will surely worsen. Cities should develop their public transport plan based on their own local conditions. The key is to make clear policy decisions from the start Is the focus public welfare or commercially based transport? Adoption of alternative fuel vehicles to protect air quality has proven to be a good choice for local transport systems. It could be introduced first in the public transport system, and then extended to other vehicles. The MRTS development strategy in Beijing could be applied in other large mega-cities around the world. It could also be an integral part of a much more complex metropolitan network, providing efficient connecting service to other surface transport modes. Beijing Transport Bureau 2, Huanbaishu Street, Xuanwu Dist. Beijing , China bjtb@bjtb.gov.cn Contact References Bastian, Andreas Fuel requirements of environment friendly cars.. Volkswagen Group China. Beijing Youth Newspaper. 300 km track transport will cover New Beijing with 8 lines before < (13 December 2002). Center for Auto Technology Research, China Newest auto technologies in the world. Shandong Science & Technology Press. Energy Research Institute (Beijing) ARRPEEC Project. Project report on issue 1: Urban transport energy demand and emission analysis for Beijing. Energy Research Institute (Beijing) ARRPEEC Project. Project report on issue 2: Energy efficiency improvement of urban transport system and mitigation of GHGs and other harmful emissions Case study of Beijing and Hangzhou. General planning for Beijing development ( ) (in Chinese). < (16 May 2002). He, Dongquan Study on pollution assessment system of urban vehicles and emission control target. Ph.D. thesis. Tsinghua University. IPCC IPCC draft guidelines for national greenhouse gas inventories: Reference manual. IPCC. OECD and IEA Revised 1996 IPCC guidelines for national greenhouse gas inventories: Reference manual. IPCC. Junqing, Guo City Railway transport development target. Government message announcing meeting, 14 October Planning for transport development and administration for Beijing Olympic planning (in Chinese). < (4 December 2002). Yang, Hongnian Beijing urban transport and environment. Proceedings of Workshop on Beijing Energy and Environment. Case reviewer: Ms. Zhu Songli, zhusongli@eri.org.cn Mr. Yu Shengmin, yushengmin@eri.org.cn Dr. Jiang Kejun, kjiang@eri.org.cn Information date: 28 February 2003, revised 28 March

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27 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Development of a rail-based mass rapid transport system in Shanghai Summary of the Practice Keywords: Mass rapid transport system (MRTS), urban transport Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Climate change, Air pollution, Urban environment Critical instruments: Design, planning and management, Economic instruments Country: China Location: Shanghai Participants: City government; Urban Research and Planning Institute Duration: 1990 ongoing Funding: Shanghai Municipal Government, around U.S.$3billion by 2001 Background: Shanghai, one of China s most important industrial and financial metropolises with unique economic and geographic characteristics, is a modern city gradually stepping into the orbit of international players. Shanghai covers an area of sq. km. At the end of 2001, there were million permanent residents in Shanghai compared with million in 1996, with an annual growth rate of 0.4 percent. In 2001, its GDP was billion RBM while its per capita GDP was 37,382 RMB, with an annual increase of 8 percent. The rapid growth of Shanghai s GDP and population widened the gap between supply and demand for transportation. At the same time, any rapid growth in the economy provides a stronger basis for investing in the construction of urban transportation. Since the 1990s, Shanghai s municipal government has gone to great lengths in developing a rail-based MRTS in the city. Construction on the first subway line began in January 1990 and it went into operation in April In recent years, especially, rapid economic growth has accelerated Shanghai s rail-based MRTS construction. By the end of 2001, subway lines in Shanghai had grown to 65 km, taking on 10 percent of its public passenger transportation needs., with another six railways under construction. In January 2003, the first magnetic suspension railway in the world was put into operation, linking Pudong and its airport. In view of growing passenger travel demand, the low efficiency of other current transportation modes, and pressing environmental requirements, the Shanghai government decided to concentrate even greater efforts in developing MRTS during the new century. A detailed plan has been worked out. Between 2001 and 2005, the Tenth Five-Year Plan period, construction of a rail-based mass transportation system is expected to be expanded significantly. Objectives: Improve urban transportation efficiency in Shanghai through the construction of a favorable public transport system supported by MRTS. Before 2005, 20 percent of the public transportation demands would be met by MRT, and by the year 2020, the share would increase 60 percent. Description of the activity: At the end of 2001, subway lines in Shanghai totaled 65 km, which made it the longest subway system in Mainland China. There are currently three lines in operation with a total investment of approximately U.S.$3 billion. Even though the total length of subway lines amounts to less than one percent of all the roads in Shanghai, passenger traffic by subway is higher than 10 percent of the total. 181

28 The 30 km magnetic suspension railway linking the downtown area and Pudong airport was put into operation as a tourist train and will be open for service in September It will be the first commercially operated magnetic suspension rail system in the world. Rail-based subway construction proposed for the Tenth Five-Year Plan would increase the lines by 15 to 20 km each year with an investment of over 10 billion RMB. By the end of 2005, rail-based MRTS in Shanghai would form one complete loop plus two cross lines and several radiant lines totaling more than 200 km capable of bearing 20 percent of the public transportation demand. By the end of 2020, the city would build eight new subway lines, five city railways in the downtown area and four MRTS railways to link the suburbs and downtown, for a total of 800 kilometers. Figure 1: Shanghai s rail-based MRTS layout programme in the Tenth Five-Year Plan ( ). In order to break the monopolistic pattern of subway operation, the Government of Shanghai will separate subway construction from the operations market by establishing several operation companies to run the subway lines. Each company would get its operation license for a certain subway line by open competitive bidding. The government would also set up an efficient, transparent and fair supervisory system for the MRTS investment portfolio, the construction contracts and the operation markets to protect the rights and interests of investors and passengers. Critical Instruments Overview MRT in Shanghai has developed rapidly. It benefited from well-designed development plans, which encouraged commercial funding. Design, planning and management MRT Development Plan Shanghai s Municipal Government modified its MRTS Construction Plan several times to keep pace with developing trends of the economy, of society and of the environment in Shanghai. Only a welldesigned project fully integrated with the overall planning of urban development would guarantee the sustained and stable development of MRTS. Economic instruments Raising Funds for MRTS by Financial Innovation In order to construct sufficient transportation infrastructure to support economic growth, a considerable amount of investment is essential. Experience in the past reveals that it is very difficult to depend on the 182

29 government as the sole investor for such a heavy burden. Therefore, Shanghai s government adopted several preferential policies and measures to attract investors from home and from abroad to participate in both the construction and the operation of its transportation infrastructure. These preferential policies increase the financial resources available for the construction of MRTS. By setting up an innovative multi-entity investment system along with integrated land use development policies along the subway lines, government investments, local bonds, loans from domestic banks and foreign governments or international financial organizations could all be attracted to these types of mega-projects. Impacts The MRTS has eased traffic jams in the downtown area. Along the subway lines, commuters now only require half an hour to cover the distance that would otherwise have taken them one and a half hours if they had taken the bus as before. As a rapid, comfortable, and punctual means of transportation, as well as being safely isolated from other surface transportation systems, MRTS enhanced traffic capacity considerably. Consequently it has reduced the cost of congestion in the downtown area thus helping the central downtown core to function fully as the service center of production. As an efficient and clean means of transportation, MRTS has displaced other systems, and has consequently reduced oil consumption and air pollution. It has therefore created a better environment for the entire urban population. MRTS has spurred economic developments along its path. Linking the suburbs to the central core, MRTS has helped the downtown city to extend and radiate its influence throughout the periphery thus facilitating a more balanced overall development. Lessons Learned MRTS construction requires thorough long term planning. In order to prepare a subway transportation system, which is scientifically sound and open to future changes, municipal governments should make a subway; blueprint based on detailed feasibility studies, which allow for future regional economic and environmental developments. The most serious hurdle that slowed the development of MRTS was high construction costs, and consequently the astronomical investments required. Policies should be designed to attract more commercial investments for MRT construction so that a wider commercial base might become available. Investors could own part of the system and receive some profit from its operation. Potential for Application The MRTS development strategy in Shanghai could be applied in other megalopolis centers around the world, wherever there is enough economic strength to warrant it. It could also be integrated into a much more complex metropolitan network, providing efficient links with other surface transportation modes. Contact Center for Energy, Environment and Climate Change (CEEC) Energy Research Institute (ERI) B-1407, Jia No.11, Muxidibeili, Xicheng Dist., Beijing , China Tel: ; Fax: kjiang@eri.org.cn URL: 183

30 References Development Plan of City Railway Transport in Shanghai for Tenth-Five Year Plan, < Zhou Hanmin, Entering to WTO and Transport Development in Shanghai in the New Century, < Map of City Railway Construction Plan. < White Cover Book for Transport in Shanghai, Shanghai People Publishing House. Case reviewer: Mr. Yu Shengmin, CEEC, ERI, Information date: 28 February

31 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Emission Control Measures in Shanghai, China Summary of the Practice Keywords: emission control, emission standard, vehicle license auction, motorcycle ban Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Climate change, Air pollution, Urban environment Critical instruments: Design, planning and management, Regulatory instruments, Technologies Country: China Location: Shanghai Participants: Shanghai Transportation Management Bureau, Shanghai Planning and Development Commission, Shanghai Environment Protection Administration Duration: 1999 to present Funding: Shanghai government Background: Shanghai s rate of economic development is among the highest of all cities in China. In 2001, the total GDP and per capita GDP of Shanghai were billion US$ and 4504 US$, respectively. Along with economic development, however, came increasing emissions of pollutants in Shanghai, which has been identified as one of 46 key cities that need to control their air emissions. Air quality in Shanghai is on the medial level of these cities. The concentrations of PM10 (particulate matter (PM) with a mass median aerodynamic diameter less than 10 micrometers) and sulfur dioxide (SO 2 ) in Shanghai are about two to four times higher than that of cities in developed countries. Tailpipe exhaust pollution from vehicles has become one of the main factors affecting the air quality of Shanghai. According to statistical data, by 2002 there were total 1.4 million vehicles in the city, including about 700,000 automobiles and 700,000 motorcycles. Annual emissions of nitrogen dioxides (NO 2 ) from vehicles are about 128,000 tonnes, 1.33 times higher than the environmental capacity. Environmental monitoring shows that the concentrations of carbon monoxide (CO), hydrocarbons and nitorigen oxides (NOx) near main road intersections are all above the national standards 2 for air quality and other relevant standards 1. Furthermore, the number of vehicles in Shanghai is still increasing at an annual growth rate of 14 percent. The number of vehicles in the city in 2005 will probably exceed the officially predicted number of 1.5 million. It is important to develop economy in the city, but the capacity of the urban environment cannot allow more tailpipe exhaust pollution. The Shanghai government therefore determined to improve the environmental quality level of vehicles and to limit the increase of vehicle to reasonable levels. Objectives: Controlling pollution from vehicle tailpipe exhaust. Improving the air quality and transportation environment of Shanghai. Providing a better city environment for Shanghai citizens. Achieving the objective of stabilizing Shanghai air quality at the national secondary level in China has established three national standards for air quality to limit the concentration of air pollutants in cities or some special areas. These three standards all lay down the concentration limit for the pollutants in ambient air, such as CO, NOx, SO2, etc. Standard applied in an area is defined by the character of the area. Standard 1 is applied in conservation areas and areas that need additional protection of their environment. Standard 2 is applied in most common cities in China. Standard 3 is applied in designated industry areas. For example, for level 2, the daily average concentration of CO and NOx are no more than 4.00 mg/m 3 and 0.05 mg/m 3, respectively. 185

32 Description of the activity: The emission control activities listed here mainly include three kinds of measures: improving the environmental performance of vehicles (mainly through the implementation of emission standards), forbidding the operation of motorcycles, and controlling the number of vehicle licenses issued for private use. Improving the environmental performance of vehicles The core of this activity is to increase the emission standards of vehicles in Shanghai. Authorized by SEPA (the State Environment Protection Administration) of China, the Shanghai government started implementing a national second-phase emission limit for vehicles (equivalent to the EU-II emission standard 2 for tailpipe exhaust of vehicles) on 1 March Starting on 1 May 2002, any vehicle that did not enter into in the admitted vehicle type catalogue could not obtain a license. The EU-II standard is targeted at newly purchased vehicles, so vehicles purchased before March 1 need not comply with this regulation, but Shanghai government plans to establish some other relevant measures to limit emissions from current-use vehicles. It is expected that by the end of 2005, all vehicles operating in central areas and the Pudong newly developed area of Shanghai will meet the EU-II standard. Shanghai is the second city to imtroduce the stricter emission standards in China (Beijing, the capital, was the first). The prescribed starting year for implementing this measure for other cities is Besides implementing the stricter emission standards on vehicles, the Shanghai government also strengthened the monitoring and maintenance of current-use vehicles and promoted the elimination of old vehicles. The relevant activities include establishing the monitoring and maintenance mechanism for current-use vehicles; stringently checking on the vehicles with more emissions than those prescribed by standards; forcibly eliminating the older-model and highpollution vehicles that cannot meet standards. Forbidding the operation of motorcycles There were 640,000 registered motorcycles in Shanghai, in which 500,000 were light motorcycles. The motorcycles account for about 55 percent of all vehicles, but only bear about 2.1 percent of the total transportation capacity. Because of the low level technology used for motorcycles, their emissions are quite high. The safety factor of motorcycle is the lowest of all types of vehicles and air pollution induced by motorcycles is serious. In order to strengthen control of motorcycle use, the Shanghai government determined to prohibit the operation of two-wheel motorcycles (including light motorcycles) on main roads inside the circle line, five vehicle roads and some other regions. Meanwhile, the government enlarged the area where two-wheel motorcycles (including light motorcycles) with out-of-city licenses are prohibited, and set stringent penalties on the two-wheel motorcycles without licenses that are operating illegally. Controlling the number of vehicle licenses for private use Early in 1990, Shanghai began to control the number of vehicle licenses issued for private use. The detailed control measure is to limit the total number of annual new vehicle licenses for private use and sell new licenses by auction. At the beginning of policy implementation, the licenses were auctioned at a base price. After 2000, the licenses for domestically made vehicles were auctioned without a base price, and after October 2002, licenses for domestic and imported vehicles were all auctioned without a base price. Next, in order to mitigate conflicts between supply and demand for vehicles for private use, the Shanghai government started gradually increasing the number of vehicle licenses for private use on the premise of maintaining the total number of vehicle licenses. For example, after 1 July 2002, the transportation management department stopped extending 2 Europe has adopted some emission control standards for vehicles since These standards are called EU-I, EU-II, EU-III, etc, respectively. So far, the most advanced and strictest standard is EU-IV standard which has been established and will probably be implemented in The EU-II, EU-III, and EU-IV standards are different for diesel and gasoline vehicles. EU- II standard for passenger cars is 2.72 g/km for CO and 0.97 g/km for HC and NOx. EU-II standard for passenger cars (gasoline vehicles) is 2.2 g/km for CO and 0.5 for HC and NOx. Since most of China s large-scale vehicles are designed and produced by European producers, China government established emission control standard for vehicles according to EU standard. The control index of China s emission standard is comparable with EU standard. 186

33 vehicle licenses for buses, and provided the extra licenses for private vehicles. In general, the Shanghai government will continue to control the total number of vehicles and continue the policy of selling private vehicle licenses by auction over the next few years. The policy of selling private vehicle licenses by auction is a market-based and transparent approach implemented by the transparent department to resolve the problem of limited transportation resources. The earnings from auction are used in the construction of roads and the public transport system. Critical Instruments Overview The introduction of emission controls is a complex measure that requires integrated action. City governments need to consider various countermeasures to improve their air quality and transportation environment. In most cases, several critical instruments are needed to support and strengthen the effects of emission control measures. Design, planning and management Air quality control planning To attain world-class status as a large international city, Shanghai established targets for ecoenvironment development. The city s Air Environment Protection Plan was announced for Tenth-Five Year Plan of Shanghai in Air quality targets called for significant improvements by 2005 compared with Countermeasures for emission controls from transport were listed, including further adoption of emission standards, emissions testing of existing vehicles, limits on the operation of heavily-polluting vehicles, more clean-fuel buses and taxies, and improvements in public transport. Transportation planning The Shanghai government made a public transport first policy. Besides establishing some incentive policies for all kinds of vehicles, the Shanghai government established and will continue to improve corresponding supporting policies on planning, investment, taxation and management, to embody a strategic orientation of public transport first. The Shanghai government will also promote the construction of rail transportation, establish rail transportation net composed of subway, urban light rail and new-type trolley car systems, and make rail transportation the core of urban public transit. It is expected that rail transportation in the city will reach 140 kilometers in length in Regulatory instruments Environmental friendly public transit In order to mitigate pollution from public vehicles, to replace old buses, public transit departments should select environmentally sound buses with good performance and quality, and that can meet EU-II standards. After 2004, all new buses and taxis in Shanghai will meet the EU-II standard. Technologies Use of No-Lead Gasoline In order to reduce lead pollution and promote emission standard controls, started from 1997, unleaded gasoline was used in Shanghai, and the use of leaded gasoline was prohibited. Impacts In general, the emission control measures implemented by the Shanghai government have had a good and active effect on air quality and the transportation environment of Shanghai, by varying degrees. The effects of the EU-II standard are apparent. According to estimates, if implementing the EU-II standard, the emissions of CO, hydrocarbons and NOx from light vehicles can be reduced by 30, 50 and 50 percent, respectively, and the emissions of CO, hydrocarbons, NOx and PM from heavy vehicles can be reduced by 13, 11, 22 and 63 percent, respectively, compared with the EU-I 187

34 standard level. The implementation of EU-II is also very helpful to improve vehicle technologies in all respects. The pollutants emitted by a common two-stroke motorcycle are about 30 times higher than from a normal car. Even a four-stroke motorcycle with better performance will produce twice the emissions of a normal car. Therefore, if the policy of prohibiting the operation of motorcycles can be implemented effectively and fully, the CO and NOx pollution produced by the transportation sector will be reduced by a large degree, the utilization of transportation and road resources will be increased effectively and the frequency of traffic accidents will be reduced. Since the policy of selling the vehicle licenses for private use by auction is a market-based and transparent measure, and the revenue from the auction can be used in the construction of the road and transportation system, it can accelerate improvements in transportation. This policy can also promote the development and integrity of the second-hand vehicle market. Lessons Learned Introduction of emission standards is an effective way to improve emissions from transportation. Because of experience in many regions in the world, emission standards are recognized to be an efficient way to control emissions. Also, this is a relatively low-cost option to improve air quality. Energy saving is an ancillary benefit from the introduction of emission standards. A pre-announced schedule for introduction of emission standards is necessary to avoid additional cost. The public and vehicle producers need to be made aware of the schedule of emission standard introduction, in order to prepare for it. The availability of vehicles and clean fuels are critical for introduction of emission standards, and time is needed to prepare them. Strong governance and public involvement is important to implement emission control measures. It is important that the public be made aware of the benefits of emission controls and the negative impacts from air pollution. Supervision and management of relevant policies and measures, and establishment of supporting systems should be strengthened. The success of measures depends on their implementation status. Strengthening supervision and management can help to improve the implementing effects and transparency of measures and avoid corresponding violations and illegal conduct. Flexible regulations should be designed at the beginning of implementation of these measures to allow some special cases. For example, the Shanghai Environment Protection Administration and other bureaus have considered some special problems appearing after the implementation of the EU-II standard. Based on investigation, some citizens have bought new vehicles that cannot meet EU-II standard before March 1st but had no time to apply for licenses. The Shanghai Environment Protection Administration and other related departments therefore decided to allow the operation of these kinds of vehicles following a strict checking process. Enhancing the study of results of emission control measures and discussing these topics with citizens will improve the implementation effects of measures. So far, emission controls mainly focused on cars, buses and trucks, motorcycles, but mini three-wheel motor vehicles should also be included. The involvement of the public is essential for the success of such measures. Because of the complexity of air pollution sources, the effects of emission control measures used in the past should be analyzed, so that future directions can be adjusted and improved. Potential for Application Emission standards can be introduced in other cities. Emission standards have been adopted by many countries in the world, so many cities already have experience in the introduction of such standards. EU-I emission standards will be introduced across China in January 2004, but it will be a challenge to apply more stringent emission standards, such as EURO-III and EURO-IV, for many cities in China. When other cities introduce emission standards, motorcycles should also be included, because the number of motorcycles operating in some cities is huge. 188

35 Contact Shanghai Environment Protection Bureau No. 161, 1039 Huashan Street, Shanghai , China Tel: References All references here are Chinese and the headings below are translations. China Statistic Yearbook 2002, China Statistic Press. Shanghai will mainly control soot emission, China Chemical Engineering Newspaper, 27 July Shanghai will start an environmental plan with a highlight on vehicles, Xinmin Night Newspaper, 15 June Shanghai started forbidding the operation of motorcycles, Shanghai Morning Newspaper, 30 July The policy of auction of imported car with base prices is canceled, Shanghai Morning Newspaper, 16 October The comparison of consumption policies of three cities, Beijing Entertainment Information Newspaper, 29 November The background of forbidding of the operation of motorcycles, < accessed 6 March Jia Pengyun, For transportation, it is a good way to limit the number of private car licenses, China Business Times, July Jiang Hua, The proportion of private cars is rising, Jie Fang Daily Newspaper, July 17, 2002 Shanghai starts implementing EU-II emission standard on March 1st, < accessed 6 March Shanghai will implement EU-II emission standard for vehicles from March this year, < accessed 1 March Shanghai City Transportation in 21 Century, < accessed 26 February Shanghai will implement EU-II standard from March 1 st, < accessed 26 February 2003 Gao Yuan, Which kind of vehicles will Shanghai people select? Hua Dong News, 11 Nov Case reviewer: Mr. Liuqiang, CEEC, ERI, liuqiang@eri.org.cn Information date: 12 March

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37 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Emission controls in Beijing Summary of the Practice Keywords: tail-pipe, emission standard, three-way catalyst, green label Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Urban environment Critical instruments: Technologies Country: China Location: Beijing Participants: Government, research and urban planning institutions, public transport corporation, taxi corporation, private transport firms Duration: 1998 ongoing Funding: Beijing government Background: Up to the early 1990s, the number of vehicles on roads in Beijing was not as large as in other cities of a similar size in the world. Before 1998, no emission standards or other emission control measures were in effect in Beijing. In 1998, however, the Beijing government recognized the deterioration of the environment, specifically with respect to air pollution. According to monitoring reports of the United Nations Environment Programme, in 1997 Beijing was one of the top ten cities with the worst air pollution in the world. The concentration of nitrogen oxides (NOx) and total suspended particulates (TSP) is much higher than World Health Organization(WHO) guidelines. In contrast to the pollution in past decades, in which sulfur dioxide (SO 2 ) emissions from coal burning were the primary pollutants year-round, NOx emissions from motor vehicles emerged as the primary pollutants in recent summers. Hence, emissions from motor vehicles are regarded as one of the three main pollution sources in Beijing. By rough statistics, carbon monoxide (CO), NOx and lead (Pb) emissions from vehicles account for 85 percent, 45 to 50 percent and 80 to 90 percent of total emissions, respectively. Rapid growth of the vehicle stock in Beijing is one of the reasons air pollution caused by vehicles is on the increase. In 1998, the vehicle stock in Beijing amounted to 1.4 million; this marks an increase by 350 percent in ten years. The vehicle stock continues to increase by an annual average growth rate of about 25 percent. Another reason for increases in air pollution is the loose tail-pipe emission standards implemented in Beijing. In order to moderate the air pollution caused by motor vehicles, a series of actions were carried out starting in One of the actions is to implement more stringent tail-pipe emission standards. As a result, the Emission Standard for Exhaust Pollutants from Light-duty Vehicles (DB11/ ) was issued by the Beijing government on 25 August 1998, and went into effect on 1 January Objectives: Long-range targets: to develop sustainable development targets in Beijing, as it grows into a large international metropolis. Medium-range targets: to fully meet the requirements of the National Environmental Quality Standards in 2010 (with respect to air quality, to meet national emission standards). Short-range targets: to lower the concentration of air pollutants in Beijing. 191

38 Description of the activity: Tail-pipe emissions from new light-duty vehicles were newly required to meet emission standards. The European Union (EU) emission standards are being adopted in Beijing. EU-I (European standard in 1992) entered into effect in January EU-II was planned for introduction by the beginning of 2004 (European standard in 1996). In effect, the EU-II standard was introduced in January In order to make improve air quality before the Olympic games scheduled for 2008, tail-pipe emissions from new light-duty vehicles will be required to meet the EU-III standard (the current European standard) in Stringent regulations for disposal of older vehicles were implemented, requiring the scrapping of all old and badly polluting taxis before September At the end of 1998, the first yellow taxi was scrapped, and during the following ten months, 30,000 of them were removed from Beijing streets. Starting on 1 January 1999, new vehicles that could not meet the new standards were not allowed to be sold in Beijing. Three-way catalyst mechanisms plus electronic jet equipments were installed on new vehicles to enable them to meet the new standards. By the end of 2001, 190,000 existing gasoline-powered vehicles registered before 1995 were retrofitted with electronic fuel injection equipment and three-way catalyst mechanisms. Inspections of on-road vehicles were enhanced. Owners of vehicles not able to meet the emission standards will be penalized. The first period after emission standards were introduced, all vehicles were classified into three classes: green label, yellow label and red label. The first class is deemed environment-friendly and all vehicles in this class are exempted from road and random inspections. Owners of vehicles in the second class are asked to make the necessary changes within a limited time period. When air pollution is severe, vehicles with red labels are not allowed to operate. Now all the vehicles in Beijing must pass annual inspections in order to get green labels, which are made visible in the front windshield of the vehicles. Vehicles that do not pass the inspections will not receive green labels and therefore are not to be driven. Critical Instruments Overview The introduction of emission standards for vehicles in Beijing developed quickly and contributed to controlling air pollutants. The successful adoption of emission standards in Beijing depends on having the relevant instruments, such as high quality fuel standards, vehicle emission checking systems, and the availability of vehicles that meet standards, etc. Together with the introduction of emission standards, unleaded gasoline fuel and emission checking systems were adopted. Technologies (1) High Quality Fuel Standard In order to promote the introduction of emission standards for vehicles, high quality fuel standards were also announced. The first step was the use of unleaded gasoline from June 1997 in Beijing. In order to introduce and meet the emission standards of the European Standard III in 2007, fuel providers were asked to produce cleaner gasoline and diesel before Technologies (2) Emission checking system Before the introduction of emission standards, there were no emissions checking systems in Beijing. At first, two working-stage checking systems were used in 1998, and were improved to simple working checking systems from Every year, all the vehicles in Beijing have to pass an annual checking to get a green decal (which indicates that the vehicle passed the emission standards), and a tax-paid decal. All the decals must be visible in the front windshields of vehicles. No car can be used without these decals. Policemen can stop cars without these decals and penalize drivers by taking their driving licences. 192

39 Impacts The deterioration of air quality was moderated after 1998, as indicated by Table 1 and Figure 1. Although the vehicle stock in Beijing increased rapidly during the three ensuing years, the concentrations of NOx and CO in the atmosphere did not increase correspondingly. In fact, their concentrations dropped by 16.4 percent and 21.2, respectively, during that period. Calculated by environment protection sectors in Beijing, the retrofitting of 190,000 existing vehicles resulted in the reduction of 8,000 tonnes of NOx and 155,000 tonnes of CO emissions. Table 1. Average daily NOx and CO concentrations and vehicle stock in Beijing NOx (µg/m 3 ) CO (µg/m 3 ) Vehicle stock (million) Source: Energy Research Institute, NOx (µg/m3) Vehicle stock (million) Year Figure 1. Average of daily concentration of NOx and vehicle stock in Beijing Lessons Learned Introduction of emission standards is an effective way to decrease toxic emissions from transport vehicles. Due to the experiences of many regions in the world, developing emission standard guidelines is recognized as an efficient way to control emissions. Emission standards are also a relatively low-cost option to improve air quality. Energy saving is an ancillary benefit from the introduction of emission standards. A pre-announced schedule for the introduction of emission standards is necessary to avoid additional cost. Time should be given to car users and car manufacturers to be ready to introduce new emission standards. Technological support to ensure emission standards are met is important Fuel quality should be improved to be suitable for new engines and to satisfy the requirements of the emission standard guidelines. A supply of high quality fuel should be guaranteed in order to match the requirements of new engines. 193

40 Potential for Application Lower level emission standards are easy to introduce. This is a strong government action with public participation. Many cities in the world have already introduced emission standards. Beijing and Shanghai are two Chinese cities that have had good experiences in introducing emission standards for vehicles. From a technical point of view, car manufacturers have already adopted EURO-II emission standards; related inspection systems, and supplies of unleaded gasoline are already in place for the introduction of emission standards. Cities such as Beijing and Shanghai have already met the schedule for EURO-III and EURO-IV emission standards. However, it will take time to be ready for these standards with respect to the manufacturing of cars and fuel quality. Generally speaking, at least EURO-II could be easily introduced in other cities in China. Contact Beijing Environment Protection Bureau No. 14 West Chegongzhuang Street, Haidlan District, Beijing, China Tel: , Fax: References Bastian, Andreas Fuel requirements of environment friendly cars. Volkswagen Group China. Beijing Youth Newspaper. 300 km track transport will cover New Beijing with 8 lines before < (13 December 2002). Center for Auto Technology Research, China Newest auto technologies in the world. Shandong Science & Technology Press. General planning for Beijing development ( ) (in Chinese). < (16 May 2002). He, Dongquan Study on pollution assessment system of urban vehicles and emission control target. Ph.D. thesis. Tsinghua University. IPCC IPCC draft guidelines for national greenhouse gas inventories: Reference manual. IPCC. OECD and IEA Revised 1996 IPCC guidelines for national greenhouse gas inventories: Reference manual. IPCC. Junqing, Guo City Railway transport development target. Government message announcing meeting, 14 October Planning for transport development and administration for Beijing Olympic planning (in Chinese). < (4 December 2002). Yang, Hongnian Beijing urban transport and environment. Proceedings of Workshop on Beijing Energy and Environment. Case reviewer: Ms. Zhu Songli, zhusongli@eri.org.cn Dr. Jiang Kejun, kjiang@eri.org.cn Information date: 28 February 2003, revised 28 March

41 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Integrated road transport system development in Beijing Keywords: road system, urban transport, parking management, intelligent transport management Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Air pollution, Urban environment Critical instruments: Design, planning and management, Economic instruments, Organisational arrangements, Technologies Country: China Location: Beijing Participants: City Government; Urban Research and Planning Institute Duration: ongoing Funding: Beijing Municipal Government Background: Rapid growth of GDP and population widened the gap between transport demand and supply, and consequently worsened traffic and commuting conditions in Beijing. In order to improve this situation, an integrated road transportation system design was adopted in Beijing, covering several aspects. The development of urban road transport system is complex work that requires the cooperation of various government agencies and research institutes. The extension of road systems, parking management and intelligent transport management systems are described here. Extension of roads in Beijing The average speed on main roads dramatically decreased between 1980 and 1985, as shown in Table 1. Table 1. Road operating speeds in Beijing. Name of road Operating speed in km/h Change rate (%) No.3 Ring Road North No.2 Ring Road West No.2 Ring Road East Qianmen Street Changan Street Source: Y. Hayashi, et al. (1998). The effects of economic restructuring on China s system for financing transport infrastructure. Transport Research A. Vol. 32 No.3. pp Worsening traffic and commuting conditions caused many problems in Beijing, such as traffic congestion, accidents, traffic noise, and pollution. In view of the pressing traffic problems, the Beijing government has been making great efforts to improve the road system since From the beginning of the twenty-first century, as the future host city of the 2008 Olympic games, Beijing Municipal Government has strengthened its transport infrastructure construction, including expressways, city throughways and ring roads as well as Mass Rapid Transit System (MRTS). Parking management Summary of the Practice Parking prices in Beijing were very low in the past. The parking price policy formulated by the price branch of the Beijing government had not changed between the beginning of the 1980s and This policy stipulated the parking price for one car as 1 yuan (Equivalent to 0.12 US$) for four hours. Over 195

42 the course of twenty years, the transportation situation, economic development level and environmental demands of Beijing changed considerably and the pricing policy changed. In view of these factors, the government of Beijing modified the parking price policy in June Intelligent transport system An Intelligent Transportation System (ITS) effectively applies advanced information, communication, control and computer technologies to the whole transportation system, through which the close coordination between people, vehicles and roads can be realized. ITS can help to establish a large-scale, versatile, real-time, accurate, high-efficiency, low-energy-use and low-pollution integrated management and service system of transportation. ITS provides support for transportation participants who can be subdivided into two subsets: (1) transportation users and customers, the (2) transportation managers and organizers. ITS is expected to provide convenient traffic conditions, mainly information services, for the former and powerful supportive and controlling tools, mainly supportive decision-making information, for the latter. Objectives: Improve the urban transport efficiency in Beijing. Promote the socio-economic and land use development of the city. Make a good transport environment for the hosting of the 2008 Olympic games. Combine parking price with transportation management; reduce traffic flow capacity in central urban areas and corresponding traffic congestion, and reduce environmental pollution through the policy of increasing parking prices. Description of the activity: Extension of roads in Beijing The Beijing urban road system consists of four function levels of a high-efficiency road network, which includes throughway corridors, distributing backbone roads, sub-arterial roads and spur tracks. In which, the throughway corridor network is comprised of the No. 2 Ring Road, No. 3 Ring Road, No. 4 Ring Road, No. 5 Ring Road, and No. 6 Ring Road (under construction), as well as 11 radial main roads and 6 trans-meridional and 3 meridional backbones According to Beijing Urban Transport Planning, the average road network density within No. 5 Ring Road and No. 3 Ring Road came to 2.62 km/km 2 and 4.66 km/km 2, respectively, in Parking management Figure 1 Planning map of Beijing urban transport Parking fees in Beijing were increased in June Parking fees differed by region, parking time and vehicle type. In the daytime, parking fees of outdoor parking lots located inside the No 4 Ring Road are 196

43 now 2 yuan per hour for small-sized and 4 yuan per hour for large-sized vehicles, and outside the No. 4 Ring Road they are 1 and 2 yuan per hour, respectively. In the nighttime, parking fees for different regions are the same, 1 yuan per hour for small-size vehicles and 2 yuan per hour for large-size vehicles. Before that, parking fee is 1 yuan for 4 hours during the day time. At the same time, some other kinds of parking fee were also increased, especially for eight central areas. In eight downtown central commercial areas such as the Wangfujing, Dongdan, Xidan, Qianmen, and Financial Street areas, etc., the parking fees are now 5 yuan per hour for small-sized vehicles and 10 yuan per hour for large-sized vehicles. Intelligent transportation system Since the latter period of ninth-five-year-plan, Beijing preliminarily established 12 intelligent transportation systems, including a transportation controlling center, a command and deployment system, a transportation monitoring system, a signal controlling system, a transportation induction system, and a global positioning system (GPS) for traffic police vehicles, a 122 call-the-police system for traffic accidents, an automatic monitoring system on traffic violations, a traffic information collection and disposition system, a computer lattice system for traffic management, a digitalized management system and an information management system. The detailed implementation of some of these systems is as follows: Transportation monitoring system: 175 camera-monitoring points have been established creating seamless camera monitoring of ring roads. Transportation signal controlling system: Central controlling of 252 urban crossings and coordinated control of six main roads. The computerized real-time optional controlling of the Pingan Street crossing and the Liangguang Street crossing has been realized, with good results. Transportation induction system: Presently there are nine of outdoor display screens being used on the No. 2 Ring Road and linking road. Through the command sent by the command center, the information displayed on the screen can be scrolled and changed. GPS for traffic police vehicle: 240 traffic police vehicles have been equipped with GPS. If a traffic accident happens, the command center can identify which vehicles are near the accident and dispatch the nearest one to solve the problem as soon as possible by wireless telephone. Automatic monitoring system of traffic violations: In total 402 sets of equipment have been installed and can automatically monitor seven kinds of traffic violations, 24 hours a day. The system data and video images of 53 crossroads can be retrieved automatically. Collection and disposition system of traffic signals: 500 annular-coil monitors installed on 80 crossings of main urban streets can collect traffic flow capacity information. 144 monitoring sections installed on the No. 2 Ring Road and No. 3 Ring Road can collect real-time traffic information about flow capacity and average speeds of vehicles. Other: Beijing tried out the ETC (Electronic Toll Collection system): At the end of 1996, the Capital Highway Development Company introduced a set of ETS equipment from the Amtech Company (U.S.) and installed this system at the Tianzhu toll station of the Capital Airport Highway. Critical Instruments Overview Integrated transport system development requires many connections with other activities in city development. The promotion of integrated road transport systems requires various supporting countermeasures. Key instruments are explained below. Design, planning and management Up to the present, the Beijing government has modified its urban road network development planning several times to keep pace with the development trends of the economy, society and the environment in Beijing. Only a scientific, foresighted and flexible road network planning approach, integrated with the 197

44 much more complex overall planning of Beijing, would guarantee the sustained and stable development of urban transport. Develop underground parking lots The objective of this kind of policy is to take full advantage of underground space. Originally, the parking fees of underground parking were much higher than that for outdoor parking, which is why drivers would not park their cars underground. The increase in outdoor parking fees can help to change this situation. The advantages of underground parking include that it does not occupy much space on the ground, it does not affect the urban landscape, and it can help reduce the traffic congestion induced by unorderly parking. Economic instruments Financial innovation to raise funds for road system construction The Beijing municipal government has introduced many innovative measures to diversify and increase the funding resources available for road system construction. Besides funds appropriated by the central and local governments, domestic loans, foreign investment, bonds, revenue from the land market, as well as earmarked taxes and fees based on the beneficiary-pay system, have enabled road construction investment to catch up and keep pace with demand. Foreign enterprises and the private sector can now invest in the transport infrastructure area, which formerly was monopolized by the public sector. Urban residential developers have are required to improve the transport infrastructure in the vicinity of their developing regions. Organisational arrangements Establish of organization In the beginning of 2000, a leading government unit on the coordination of development of ITS was established, called the State Leading Group and Office for the Coordination of ITS. Technologies Technology research support Between 1986 and 1995, China did a lot of scientific research and engineering research in the area of transportation management systems and set down a series of relevant standards and criteria, which provided a strong basis for the future research and development of ITS. Impacts Much of Beijing s modern transport network has been formed in recent years. Until 1998, the length of roads in Beijing was 3721 km and the area under road network amounted to million m 2, with an annual growth rate of 4.15 percent, as shown in Table 2. There are in total 138 large cloverleaf junctions, 125 overpasses and 293 underpasses in Beijing. The No. 2 Ring Road, No. 3 Ring Road, No. 4 Ring Road and No. 5 Ring Road were successively constructed and brought into service. Construction on the No. 6 Ring Road began in 2000 and will come into service in the near future. 198

45 Table 2. Road network development in Beijing. Year Road length (km) In which: First level road* In which: Second level road Area covered by road network (10,000 m 2 ) In which: first level road In which: Second level road ,979 1, ,485 1, ,276 1, ,905 1, ,194 1, ,494 2, ,665 1,577 1,265 3,807 2,319 1, ,637 1,723 1,371 4,061 2, ,721 1,668 1,447 4,214 2,980 1,248 Source: ERI, AIT report. Note: Basically road in China is classified into four levels which first level is best quality road. Generally first level road and second level road represent better quality road in China. In 1998, the motor vehicle stock in Beijing had grown to more than five times that of 1985, up to 1.16 million vehicles, with an annual average growth rate of 13.8 percent. Passenger and freight transport volume was about 23.7 billion passenger-kilometers and billion ton-kilometers, respectively; both were about 1.3 times the levels of Despite the increased traffic, road-operating speeds had begun to increase gradually compared with According to the objectives of Beijing transport planning, the average operating speed on urban throughways during rush hour should be 35 to 50 km/h, and 20 km/h on general trunk roads in the year The impacts of increasing the parking prices include: Reduced the traffic flow in central urban areas and reduced the traffic congestion induced by shortage of parking space and unorderly parking. Increased the activities of parking lot owners, promoted the use of existing underground parking grounds and improved the development of potential parking places. Increased the revenues of parking, were able to attract more funds into parking construction and accelerated the development of parking places. The introduction of ITS have contributed to Beijing by reducing traffic congestion and improving the transportation management efficiency. For example, after implementing the computerized optional coordinated controlling system on Ping-an Street, the average rate of stoppage of vehicle flow has been reduced by 29 percent and the average speed of vehicles has increased by 25 percent compared with the traditional single-point controlling system. After establishing the GPS for traffic police vehicles, the command center sent out an average of 560 deployment orders per day and the average time for traffic police to arrive at the accident site in urban areas is now about 3.6 minutes, 10 minutes less than in the past. Due to the improvement of ability to deal with accidents, the frequency of traffic congestion induced by traffic accidents has been reduced by 25 percent. Lessons Learned Transport development should be properly combined with city planning. Future development of a city should be based on a clear picture, so that the transportation systems can be designed together. Because of the rapid development of Beijing in recent years, design for transport system requires long-term consideration. The No. 4 Ring Road was designed to reach capacity by the year 2006, but two years after it was constructed in 1998, the capacity had already been reached, and now the target speed is hard to achieve because of traffic congestion. Similar cases can be observed, such as at the Xizhimen interchange. 199

46 Increased public awareness of various developments in transport, such as ITS, parking fee changes can contribute to the environment by facilitating better transport choices. Advanced technology should be fully used in transport development. Countries should promote the development of the ITS industry and establish their own ITS industries and technology; use new types of pavement, etc. The localization of these technologies could contribute to economic development. Potential for Application The integrated transport system development strategy in Beijing might be applied in similar megalopolis cities in countries in economic transition. Many of the possible countermeasures are lowcost options and easy to introduce in other cities. The raising of parking fees is one efficient way to control traffic volume. Development of road systems and ITS in large cities is a certain trend to satisfy transport demand and provide better transport systems, especially in the rapidly developing region of Asia. As city to test these systems, Beijing has some advantages to establish ITS, but for ordinary cities, there may exist some problems in the area of infrastructure, capital and labor inputs. How to extend these systems and adapt them to other cities is a tough task for the Chinese government in the future. Contact Beijing Transport Bureau 2, Huanbaishu Street, Xuanwu Dist., Beijing , China bjtb@bjtb.gov.cn References Bastian, Andreas. 2001, Fuel requirements of environment friendly cars.. Volkswagen Group China. Center for Auto Technology Research, China Newest auto technologies in the world. Shandong Science & Technology Press. Energy Research Institute (Beijing) ARRPEEC Project. Project report on issue 1: Urban transport energy demand and emission analysis for Beijing. Energy Research Institute (Beijing) ARRPEEC Project. Project report on issue 2: Energy efficiency improvement of urban transport system and mitigation of GHGs and other harmful emissions Case study of Beijing and Hangzhou. General planning for Beijing development ( ) (in Chinese). < (16 May 2002). He, Dongquan Study on pollution assessment system of urban vehicles and emission control target. Ph.D. thesis. Tsinghua University. IPCC IPCC draft guidelines for national greenhouse gas inventories: Reference manual. IPCC. OECD and IEA Revised 1996 IPCC guidelines for national greenhouse gas inventories: Reference manual. IPCC. Junqing, Guo City Railway Transport Development Target. Government message announcing meeting, 14 October Planning for transport development and administration for Beijing Olympic planning (in Chinese). < (4 December 2002). Yang, Hongnian Beijing urban transport and environment. Proceedings of Workshop on Beijing Energy and Environment. Case reviewer: Mr. Liu Qiang, liuqiang@eri.org.cn Yu Shengmin, yushengmin@eri.org.cn Dr. Jiang Kejun, kjiang@eri.org.cn Information date: 28 February 2002, revised 28 March

47 Asia-Pacific Environmental Innovation Strategies (APEIS) Research on Innovative and Strategic Policy Options (RISPO) Good Practices Inventory Introduction of Alternative Fuel Vehicles in Beijing Summary of the Practice Keywords: Alternative fuel vehicles (AFVs), Natural gas vehicles (NGVs), dedicated fuel vehicles, bifuel vehicles Strategy: Development of environmentally sustainable transport systems in urban areas Environmental areas: Urban environment, Air pollution, Climate change Critical instruments: Technologies Country: China Location: Beijing Participants: Government, research and urban planning institutions, public transportation corporation, Taxi Corporation Duration: ongoing Funding: Beijing government, Beijing Public Transit Company, Beijing Bus Company, Taxi Corporation Background: In 1998, the Beijing government recognized the serious problem of deteriorating environmental quality, especially increasing air pollution. According to a monitoring report of the UNEP, Beijing is among the ten most polluted cities in the world. The concentration of NOx total suspended particulates (TSP) is much higher than the World Health Organization(WHO) guideline recommends. Whereas in past decades SO2 emission from coal burning was the primary pollutant year-round, in recent summers NOx emissions from motor vehicles has become the primary pollutant. As a result, emissions from motor vehicles are now regarded as one of three main pollution sources in Beijing. A rough estimate sets CO, NOx and Pb emissions from vehicles at 85 percent, 45 to 50 percent and 80 to 90 percent, respectively, of the total emission of these pollutants. Although transit buses and taxis comprise only a small portion of the total vehicle stock, their daily distance travelled and annual number of days used are much greater than other kinds of vehicles. Therefore, emissions from transit buses and taxis account for quite a large share in total vehicle emissions. The Beijing government decided that the first alternative fuel vehicles (AFVs) developed should be buses and taxis. The Public Transportation Corporation received natural gas vehicles (NGVs), a dedicated fuel vehicle, and LPG(Liquid Petroleum Gas)-gasoline vehicles, which are a bi-fuel vehicle. Part of the Taxi Corporation s fleet was modified to become bi-fuel system vehicles (LPG/Gasolinetaxi). Objectives: Long-term targets: Meet the ecological requirements set out for an international metropolis. Mid-term targets: By 2010, fully meet the requirements of National Environmental Quality Standards. For air quality, meet the second level of requirements. Short-term targets: Optimize the energy mix in the transportation sector and lower the concentration of pollutants in the air in Beijing. Description of the activity: In September 1999, the first CNG(Compressed Natural Gas) transit bus appeared in Beijing, marking the beginning of the project. By the end of 2001 Beijing had 1630 NGVs, the most of any city in the world. In addition, 3000 buses were modified to become LPG-buses (bi-fuel). There are 24 natural gas stations in Beijing and 71 LPG stations. 201

48 By the end of 2001, more than 30,000 taxis had been modified to become bi-fuel cars (taxi-lpggasoline). The Beijing government and research institutes have supported the R&D of new CNG and LPG vehicles. Source: Beijing Bus Manufacture Factory Critical Instruments Overview Accompanying the development of AFV in Beijing, key issues for its implementation include infrastructure development for CNG and LPG stations, and availability of advanced AFV. Technologies (1) Construction of CNG and LPG Stations After introducing AFV technology Beijing was faced with a lack of CNG and LPG stations. Taxis are equipped with a bi-fuel system but in many cases taxi drivers simply used gasoline rather than LPG. However, there are now more than 72 LPG stations in Beijing which could help encourage taxi drivers to use LPG exclusively. Technologies (2) Development of Single Fuel Vehicles Taxis in Beijing use a bi-fuel system but many taxi drivers still favour the gasoline system because of its convenience, and this is contrary to the goal of adopting a purely LPG system. Therefore in 2003 the Beijing government decided to introduce single fuel vehicles, mainly for taxis and government vehicles. Major car manufacturing companies in China started to provide single-fuel cars with LPG for use as taxis, and more models have appeared recently. Technologies (3) Development of New CNG Buses Availability of good-quality CNG buses is important for large-scale use within the transit system. Even before emission standards were adopted and CNG buses used in Beijing, the Beijing Bus Manufacturing Company had invested in CNG bus development. By the end of 2001, after introduction of the first generation CNG bus, two new models were developed and put into use. Recently, several more bus-manufacturing companies have been capable of providing high-quality CNG buses and other AFV. Compared with the first generation CNG buses, new CNG buses have much better operational performance. Impacts Compared with gasoline and diesel buses, alternative fuel buses have much lower emissions. Of all the liquid or gaseous fuels ready for commercial transportation use, CNG offers the greatest reduction in emissions compared to gasoline, illustrated as follows: Carbon dioxide emission is approximately 19 percent less, while producing the same calorific value; carbon monoxide is reduced by 65 to 90 percent; reduction in non-methane hydrocarbons (NMHC) is up to 97 percent; particulates are virtually eliminated; and ozone reactivity from NGVs is up to 80 to 90 percent better than gasoline emission. Therefore adoption of alternative fuel buses could contribute to local air quality improvement. 202