Tracking Transport 2020

The transport sector is in a critical transition. Existing measures to increase efficiency and reduce energy demand must be deepened and extended for compliance with the Sustainable Development Scenario (SDS).

This process should be set in motion in the upcoming decade, as any delay would require that stricter measures be taken beyond 2030, which could noticeably raise the cost of reaching climate targets. Combined efforts across all transport modes, accompanied by power sector decarbonisation, will be crucial to achieve SDS goals.

Emissions from aviation and shipping have recently been increasing at a faster rate than for any other transport mode. But energy demand and emissions have also continued to rise in all modes of road transport (cars, trucks, buses and two- and three-wheelers), and increases have been particularly rapid in heavy-duty road freight transport. As a result, the road share of total transport emissions has remained relatively stable at nearly three-quarters of total transport emissions since the turn of the century.

Road transport emissions continued to increase despite progress in electrification: the number of electric cars on the world’s roads exceeded 7 million in 2019, and fleets of electric buses and trucks are being procured in more and more cities around the world. Therefore, continued growth in emissions is due largely to:

• Car buyers continuing to purchase larger, heavier vehicles, not only in the United States but increasingly in Europe and Asia. This trend is common to all vehicle markets and has led to a slackening – or in some cases even reversal – of national rates of fuel consumption improvements. The worldwide market share of SUVs rose 15 percentage points between 2014 and 2019, to make up 40% of the global light-duty vehicle market. Shares in North America and Australia were particularly high, around 50%.
• Rising global GDP in 2019, together with the proliferation of online commerce and rapid (i.e. same-day and next-day) delivery, which continues to raise road freight demand.

Global transport sector energy intensity (total energy consumption per unit of GDP) dropped by 2.3% in 2019 after falling an average 1.4% per year between 2000 and 2018. However, energy intensity must drop by 3.2% on average annually from 2020 to 2030 – more than double the annual average rate of decrease since 2000 – to put transport efficiency on track with the SDS.

For the transport sector to meet projected mobility and freight demand while reversing CO₂ emissions growth, energy efficiency measures will need to be deployed to maximum effect.

Energy efficiency measures in transport can take many forms, including:

• managing travel demand to reduce frequency and distance as well as dependence on high-energy-intensity modes (e.g. car and air)
• shifting travel to the most efficient modes
• system-level and operational efficiency measures
• deploying energy-efficient technologies for vehicles and the fuels that drive them (e.g. electrification enables the use of motors that are far more efficient than internal combustion engines).

An integrated, coherent and co‑ordinated set of policies is required to put the transport sector on the SDS pathway. Measures at various levels of jurisdiction – national, subnational, within cities or in multi-country regional blocs – must spur progress in:

• Managing travel demand to reduce the frequency of trips, distances travelled and dependence on cars, and to shift travel to the most efficient modes (i.e. the ‘avoid/shift’ approach).
• Improving the energy efficiency (i.e. fuel economy) of vehicles.
• Increasing the availability and use of sustainable, low-carbon fuels.

In addition to CO₂ emissions, the SDS targets air quality improvements. Adopting cleaner fuels and enacting tighter emissions control standards for vehicles would improve outdoor air quality in the developed and developing world alike.

Many regulatory measures – including vehicle efficiency standards, zero-emission vehicle mandates and low-carbon fuel standards – can encourage the adoption of more sustainable transport technologies.

For example, fuel economy standards have already proven their efficacy in reducing specific (per-kilometre) emissions of cars and trucks. For vehicle efficiency standards to remain effective, however, it will be critical that they evolve to:

• Reflect real-world operations. As the Dieselgate scandal so vividly demonstrated, it is possible for car manufacturers to comply with tests even though their vehicles emit pollutants with serious health impacts. This also applies to CO₂ emissions, but regulatory procedures can be improved, for instance through adoption of the WLTP, a testing system that incorporates real-driving emissions, and in the case of local air pollutants, through efforts such as the Real Urban Emissions (TRUE) initiative, which monitors in-use emissions.
• Broaden the regulatory scope beyond direct tailpipe emissions. Regulations should also cover the upstream emissions and sustainability impacts of fuel production and distribution. A well-to-wheel approach should be adopted as new technologies such as electric and hydrogen vehicles, and alternative fuels such as biofuels, gain market shares. Policies should eventually extend beyond operations to vehicle production and disposal. While there are many practical challenges to this lifecycle vehicle regulation approach (including overlap with policies covering other sectors), it is necessary to begin by gathering and analysing data to monitor the lifecycle impacts of current regulatory frameworks.
• Align standards with climate pledges. The disparity between policy coverage and stringency and the actions needed to meet emissions reduction goals is a major obstacle in curbing transport emissions growth. To be realistic and actionable, Nationally Determined Contributions must be founded on credible projections of transport activity and include policies to promote sustainable transport.
• Guard against regulatory loopholes and expand to encompass new technologies and business models. For example, one regulatory loophole could be closed by including trailer efficiency mandates in heavy-duty-vehicle efficiency standards, or even mandating vehicle efficiency standards for two-wheelers (only China has such standards). Examples of regulating new business models include new ways to promote Mobility-as-a-Service and fleet regulations for taxis and ride-sourcing platforms.

Fiscal policies can spur progress in both reducing emissions and raising air quality. Taxes that reflect the societal costs and the cost of environmental damage incurred by burning fuel influence passenger and freight mobility choices. People may reduce discretionary car trips, car-pool, purchase more efficient vehicles and drive more efficiently, choose alternative transport modes or not take trips at all. Reducing or phasing out subsidies (implicit or explicit) on transport fuels also impels these shifts.

Taxing at the point of vehicle purchase and/or circulation can also affect transport decisions. Differentiated taxation schemes, also known as feebates, can incentivise vehicle makers to provide more efficient technologies and consumers to purchase cleaner, more fuel-efficient cars. Ideally, taxation schemes should directly target performance outcomes, including CO₂ or local pollutant emissions reductions.

With rising efficiency and more EVs in circulation, eventually fuel taxes will not provide enough revenue for road infrastructure maintenance. Although EVs do not emit local air pollutants, their societal impacts include congestion and road wear. A well-timed phase-in of road pricing to supplement fuel taxation will be needed to manage the transition to cleaner and more sustainable road transport.

The many measures available to improve transport sustainability in cities fall into three categories:

• travel demand management (TDM) policies, both fiscal (e.g. congestion and parking pricing) and regulatory (e.g. zero‐emission zones)
• policies altering urban form and promoting densification, including mixed- and transit-oriented development and multicentric city layouts, to reduce trip frequency and distance
• investment in public and non‐motorised transport, including maintenance, improvements and extensions to public transit networks, passenger fare subsidies, and buildouts and improvements to walking and cycling infrastructure.

At the end of 2019, the number of electric light-duty vehicles on the road exceeded 7 million. Along with rising market uptake of electric cars, lower costs and better battery performance are making truck and bus electrification attractive for certain operations, especially in cities.

Meanwhile, China continues to lead the world in urban train and high-speed rail expansion, with a significant amount of track laid rapidly in the past decade to supply electric, low-carbon passenger services for decades to come. India has ambitious plans to build high-speed rail networks along its golden quadrilateral.

Reducing transport CO₂ and pollutant emissions will require sustained policy efforts to enhance efficiency and electrification. Priorities also include anticipating and managing demand by shaping new mobility developments in cities and by formulating long-term technology and policy visions for the hard-to-abate aviation, shipping and road freight subsectors.