Transport Sector GHG Emission Reduction Strategies

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1 Transport Sector GHG Emission Reduction Strategies Hirofumi Ohnishi Chair, WG on Transport GHG Reduction Strategy OECD/ITF Joint Transport Research Center 1

2 Recent Development of Climate Change Issue GHG emissions reduction by 80% by 2050 as long-term target of developed countries GHG emissions reduction by 0~25% by 2020 as midterm target of major developed countries. 25% reduction of Japan s target. Limiting of global average temperature increase by 2 Post-Kyoto framework to be negotiated at COP15 in Copenhagen in December

3 Overview Three climate change-related challenges for transport : i. meeting ambitious GHG emission reduction goals; ii. transitioning to less carbon-intensive energy sources; and iii. substantial investments in order to adapt infrastructure and facilities to climate change. 3

4 World CO2 Emissions from Fossil Fuel Combustion, 2006 Manufacturing Industries and Construction 19.4% Other Sectors 11.4% Transport 24% Road 16.7% Domestic Aviation 1.2% International Aviation 1.4% Domestic Navigation 0.4% International Maritime 3.0% Other Transport 1.1% Energy 45.5% 4

5 Transport CO 2 Emissions from Fossil Fuel Combustion** Mt CO 2 eq Mt CO 2 eq % change CAGR* CAGR* World % 2.11% 2.26% OECD % 2.07% 1.16% ITF % 1.37% 1.38% North America % 1.53% 1.04% EU % 1.79% 1.31% EU New % 2.49% 6.02% Asia Pacific % 2.15% 0.54% India % 1.66% 2.27% Other % 1.29% 3.29% Top 10 Rest of World % 5.27% 5.38% Rest of World % 3.78% 3.53% * compound annual growth rate ** including international maritime (IEA estimate) and international aviation 5

6 Some countries have been able to reduce transport CO2 emissions. In Germany, transport CO2 emissions have been declining since the late 1990s due to: i) vehicle fuel economy improvements; ii) biofuels tax exemption and quota system; iii) increased fuel taxes on conventional fuels; iv) road pricing of heavy duty vehicles; v) differentiated vehicle excise taxes linked to engine displacement; and vi) new vehicle labelling. France has been able to stabilise the emissions due to: i) improved vehicle fleet efficiency; ii) reduced travel speeds; and iii) stabilised travel volume. In Japan, the emissions have also decreased since 2001 even as the economy grew. This is due to: i) improved load factors in road freight transport; ii) improved vehicle fuel economy triggered by increasingly stringent standards; iii) an increased share of fuel efficient micro-cars and the greater number of hybrid drivetrains; and iv) reduced traffic congestion. 6

7 Transport CO2 Emissions in Japan,

8 Key Messages 1. Many transport technological GHG reduction measures are relatively low or even negative cost, but the absolute transport contribution of low-cost CO2 abatement will generally be less than other sectors. While net average social costs are low, capital costs are likely to be high in the transport sector compared to the measures in other sectors. 8

9 Marginal Abatement Cost Curve for Road Transport in 2030, McKinsey 9

10 Key Messages 2. In order to effectively tackle transport GHG emissions, governments need a robust evaluation and monitoring framework to guide their action. Evaluation and monitoring relies on adequate data: transport GHG strategies need to cover data collection and processing to be improved in many instances. 10

11 Evaluation and Monitoring Framework for Addressing Transport CO2 Emissions Demand Supply People s lives Improvement of Welfare Economic Activities Economic Growth Vehicle Fuel, Energy Mode share Infrastructure Freight transport Passenger transport Traffic (Market) CO 2 Emissions CO 2 Emissions = Activity x Mode Share x Efficiency x passenger freight tank to wheel traffic efficiency Fuel carbon content well/field to tank 11

12 Evaluation Model of Transport CO2 Emissions 12

13 Areas for Actions to Reduce Transport GHG Emissions Travel demand Mode share Fuels and energy Vehicle efficiency Traffic efficiency Land use planning Public transport Freight transport Passenger vehicles Road network Fiscal and economic measures Technological research and development Information and education 13

14 Key Messages 3. Cost-effectiveness assessments of measures for contributing to GHG mitigation objectives may more effectively guide policy. 4. Changes in fuel tax rates have an important impact on the effectiveness of other transport GHG reduction policies. 5. Fuel efficiency standards are essential to encourage consumers to make fuel economy investments. Long term fuel economy standards would create the stability, based on which car manufacturers need to invest in new technologies. 14

15 Improving vehicle fuel economy of internal combustion engine is a key low-cost GHG reduction strategy. There is a clear opportunity to improve new car fuel economy by 30% or more by 2020 and by 50% by 2030 at low costs. 8,000 7,000 6,000 5,000 4,000 LDV CO2 Mid range BAU LDV CO2 Stabilization 3,000 2,000 1,

16 Key Messages 6. Well designed CO2-based differentiated vehicle taxation or feebate schemes hold great potential to stimulate both supply and demand for fuel efficient vehicles. Such tax incentives need to be better aligned internationally especially in Europe. They also need to be coherent with other incentives such as consumer labelling schemes. 7. Better traffic management has the potential to deliver important CO2 reductions if care is taken to avoid induced traffic effects. Even in some cases where overall travel increases, emissions are reportedly still less than before due to more efficient operating speeds. 16

17 CO2 and VKT Impacts of Selected Road Infrastructure Modifications in Japan CO 2 emissions n tio ifica d o m to r rio l p v e le g e ra a v e to d x e e d In Traffic volume (vkm) Metropolitan Area Rural Area New bypass Lane increase Intersection treatment

18 Key Messages 8. Fuel carbon standards and transparent biofuel sustainability criteria are essential in ensuring that shifting from oil to alternative fuel sources results in less, not more, lifecycle CO2 emissions. 9. Demand management such as mobility management initiatives, land-use planning and promotion of quality public transport can help to reduce GHG emissions and deliver synergies and cobenefits related to congestion mitigation as well as air pollution and safety improvements. 18

19 Cumulative trips, passenger distance and CO2 emissions of passenger cars by trip length in Great Britain, 2002/2006 average 100% 90% 80% 70% 60% 50% % of total car trips - Cumulative % of total passenger distance - Cumulative % of total car CO2 - Cumulative 23% of all car trips are less than 2 miles but only account for 4% of CO2 emissions 57% 78% 93% 62% 56% 40% 37% 100% 90% 99% 88% 30% 20% 23% 19% 30% 80% 70% 60% 50% 40% 85% 10% 0% 7% 4% 0.9% 3% 0.4% 14% Distance (miles) 30% 20% 10% 0% Distance (miles) 19

20 Key Messages 10. Fuels for international air and maritime transport are not taxed and thus climate and other externalities are not captured in these markets. Timely actions by ICAO for aviation and IMO for maritime are critical to develop measures to reduce emissions from international aviation and maritime transport. 20

21 WG Report Outline 1. Linking Transport GHG Emissions to Climate Change: The Impact Pathway 2. Linking Transport Activity to CO 2 Emissions: Drivers, Trends and Projections 3. CO 2 Reduction Potential from Improving Efficiency: Vehicles, Traffic and Drivers 4. CO 2 Reduction Potential from Reducing Fuel Carbon Content 5. CO 2 Reduction Potential from Changes in Activity, Land Use and Mode Share 6. CO 2 Reduction Potential from International Air and Maritime Transport 7. Cost Effectiveness in Transport GHG Reduction: How to know, how much to reduce at what cost? 8. Evaluation of Transport-sector GHG Reduction Measures and Designing Effective Strategies 9. Conclusions and Recommendations 21

22 Thank you for your attention. 22