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The Transport Sector and Climate Change Expand / Collapse
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Posted Monday, May 12, 2008 7:49 AM
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If we apply a reductionist model, which considers climate change emission reduction objectives alone, then technical solutions that focus on increasing fuel efficiency or promoting alternative fuels may seem most cost effective (measured as cost per unit of emission reduction). However, if we use a more comprehensive model which considers other impacts, then mobility management strategies that reduce total vehicle travel often turn out to be more cost effective because this helps achieve many other planning objectives, including congestion reduction, road and parking cost savings, consumer cost savings, accident reductions, improved mobility options for nondrivers, improved public fitness and health (if they increase per capita walking and cycling activity) and support for strategic land use planning objectives (such as increasing land use accessibility and reducing sprawl).

These cobenefits are often more significant in value, so ignoring them can lead to emission reduction policies that make society worse off overall, and tends to undervalue strategies that provide multiple benefits. For example, a policy that reduces climate change emissions by 20% would not be cost effective if it increased traffic accidents by 10% because per mile accident costs tend to be several times larger than per mile climate change emission costs.

In fact, strategies that increase vehicle fuel efficiency or shift to cheaper alternative fuels tend to stimulate more driving (a rebound effect), exacerbating problems such as traffic congestion, accidents and sprawl (see Todd Litman, "Efficient Vehicles Versus Efficient Transportation: Comparing Transportation Energy Conservation Strategies," Transport Policy, Volume 12, Issue 2, March 2005, Pages 121-129; at www.vtpi.org/cafe.pdf ).

We have identified more than a dozen "Win-Win" emission reduction strategies (http://www.vtpi.org/ster.pdf ), which are reforms that correct existing market distortions that result in economically excessive vehicle travel. These include strategies such as:

* Pay-As-You-Drive vehicle insurance and registration fees, which convert fixed costs into variable costs.

* Parking pricing and cash out.

* Improved walking and cycling conditions.

* Improved public transit service quality.

* Smart growth land use policies.

Although individually these strategies have modest impacts, typically affecting just a few percent of total vehicle travel, their impacts are cumulative and synergistic, resulting in large total effects. If fully implemented to the degree justify on economic grounds they are predicted to reduce emissions by 25-35% (http://www.vtpi.org/sotpm.pdf ).

Some people question the effectiveness of these strategies, particularly those involving pricing, on grounds that motorists are no longer sensitive to fuel prices, based on studies such as those citied by Dan Sperling. However, some recent analysis indicates that motorists are now becoming more responsive to fuel prices (see my recent Planetizen blog at http://www.planetizen.com/node/31111 ), now that price increases have been durable and are causing fuel costs to represent an increasing portion of household budgets.

I'm not suggesting that we should rely only on pricing to achieve emission reduction targets, but cost-effective win-win emission reduction strategies exist which provide significant benefits, and so should be deployed quickly as no-regrets policies.

My key point is that liter of fuel conserved by reduced vehicle travel tends to provide an order of magnitude more benefits than the same liter conserved by increasing vehicle efficiency or shifting to alternative fuels, because reduced vehicle travel also achieves other important objectives such as congestion reduction, facility cost savings, increased traffic safety, and consumer savings. Only by applying more comprehensive analysis that considers all of these impacts can we identify the truly optimal emission reduction strategies.

Todd Litman (litman@vtpi.org)
Victoria Transport Policy Institute (www.vtpi.org)


Todd Litman
(litman@vtpi.org)
Victoria Transport Policy Institute
(www.vtpi.org)
Post #68
Posted Wednesday, May 21, 2008 9:12 PM
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May I pose a different kind of question: how should Ministers and policy makers respond to this debate? I think they might quickly conclude that they are right:

* to act on several planes at once, such as vehicle technology, alternative fuels, land use policy, and consumer behaviour; and

* employ a variety of instruments in combination, like pricing policy (even if consumer response is inelastic), performance standards (Dan Sperling’s point - eg for vehicle emissions), quantitative targets (despite the distortions that follow), monitoring schemes (like certification of biofuels).

Can we help them to achieve new thinking?

There are many interesting ideas in the debate so far (personally I noted Svenn Jensen on encouraging new social norms through regulation; Todd Litman on pay-as-you-drive to convert some of the fixed costs of driving into variable costs). But perhaps we can suggest some broad, underlying messages. My candidates might be:

* First, avoid measures that turn around and bite: for example reject quantitative targets for biofuels, or pricing policies that depend upon hitting consumers hard, or technological standards that encourage sub-optimal developments, or fiscal measures that hypothecate revenues to unsustainable investment.

* Second, work out how to spread similar measures to developing economies before their economic growth undoes the good effects of policies in the developed world; the tough challenge here might be post-Kyoto agreement, but there are also softer possibilities through co-operation, technology transfer, demonstration projects etc.

Are there other candidates?
Post #69
Posted Thursday, May 22, 2008 11:55 AM
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Dear Jack,

I have read your background document and must admit I am always somewhat puzzled by this concept of 'costs' of abatement. In general, what are costs to one are benefits to another. To give an example, the introduction of the catalytic converter was regarded by car makers and regulators as an additional cost. However, if you look at this carefully you find that for suppliers of precious metals, of catalysts, of electronic control systems, these were not costs at all, but benefits. Firms like Johnson Matthey, Bosch and Engelhardt did rather nicely out of these 'costs', meaning they recruited a lot of engineers, who did a lot of R&D and created a lot of IPR, and generally added value, rather than cost.

It is already quite clear that attempts to reduce CO2 emissions from cars will have similar benefits. We should be very careful therefore, to unravel the true meaning of what the car assemblers (as represented by ACEA in the EU) present as 'costs'. We should take a broader, macroeconomic view of these issues and may well find that it is merely a reallocation of resources to other sectors of the economy, or even of the automotive sector (suppliers), which in the process add value in various ways. Indirectly, this also benefits the vehicle assemblers in the longer term, as the higher engineering content of their products can in various ways be translated into benefits for which the consumer is willing to pay. The rising electronics content of cars, has allowed the addition of a number of features that can be sold to customers.

I welcome any comments on this.


Paul Nieuwenhuis
Post #70
Posted Thursday, May 22, 2008 4:55 PM
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Implementing ECMT 1991 Resolution on Power and Speed of Vehicles key to achieving post-Kyoto and 120 g/km CO2 ambitions.

Past and current market trends towards ever bigger, heavier and more powerful cars - in all size classes - have offset most technological improvements towards energy efficiency and reducing CO2 emissions. Today's family cars with an average 140 HP/1400 kg and >200 km/h top speed outperform classic sports cars. In 3 decades (2 for diesel) average power levels have doubled. Not consumer demand but supply side marketing priorities (competition based on "more = better") made all size classes upgrade at least two grades. Today's "small cars" (A/B segment) equal the 1991 “Golf”(C) class and "medium sized" (D) cars equal former upper class cars in interior space, power and performance. Reducing dimensions, weight and power levels is most cost-effective in reducing fuel consumption and CO2 emissions. Nevertheless, manufacturers must follow sustaining upgrading trends in an overcrowded car market, serving never satisfied consumers - who blame industry and politics for inefficient cars and high casualty rates.... This is the real reason why 120 and 130 grams CO2/km are hardly achievable. This dead end street (manufacturers and consumers captive in marketing trends) must be opened; ITF can show the way-out.

What must change? This crazy rat race for power, speed and dimensions must end to achieve 120 grams CO2/km (and less) in an economical way, without wasting money in add-on technology for continuing upgrading. Downsizing power and performance levels and vehicle dimensions must be lifted from today’s taboo and put back on ITF’s policy agenda. Implementing ECMT's 1991/ 66 resolution on reducing power and speed, i.e. through regulatory limiting specific HP/kg ratings, top speeds and body size/weight, is most urgent. Returning to performance levels and vehicle dimensions of the 70s is most cost-effective in reducing traffic energy consumption, CO2 emissions, traffic dynamics and road casualties.
ITF and Member States must support and renew the principles as adopted in ECMT’s 1991 Resolution and take real steps towards implementing such policies.

Martin Kroon, mc.kroon@hetnet.nl
Post #71
Posted Monday, May 26, 2008 5:37 PM
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Martin,

You are right about the weight and specification arms race in the car industry. I believe it was Ettore Bugatti, or possibly Gabriel Voisin, who said: "Le poids; voici l'ennemi". Not much has changed. Many argue you don't need to reduce weight, you can do much by improved powertrains, but those changes are even more effective if we reduce weight at the same time. Amory Lovins has pointed to the factor 4 (or more) improvement achievable by reducing weight, as you can reduce the weight of all other components and remove some (e.g. power steering) altogether. You also get cars that are better to drive, but how many drivers are true driving enthusiasts today? Too many seem to prefer moving around in mobile offices or mobile boudoirs, all at the expense of true driving experience. We probably need a 'campaign for real cars', that are fun and rewarding to drive. These will also, perhaps to the surprise of many, be more environmentally optimised. It is interesting in this context that an environmental rating system for vehicles we have developed with consultancy Clifford-Thames (and available as an interactive tool from their website: www.clifford-thames.com under 'ERV'), and which has a strong weight element (as it has such a crucial impact on the environmental impact of cars), brings up the smallest Morgan sportscar as on a par with a Toyota Prius, Lotus also does well, while Smarts tend to come out on top (Bentley at the bottom).

This suggests weight-based regulation, or taxation as is currently in use in some countries (e.g. Dutch road tax for many years). Alternatively we could just set standards for CO2 emissions (e.g. 130 g/km) and allow car makers to decide how they achieve that. Many small cars already comply in any case - so it is clearly not beyond the car industry to achieve this - and if you want to offer large cars, you just have to make them significantly lighter. Seems fairly straight-forward, really.

Paul
Post #72
Posted Tuesday, May 27, 2008 12:12 AM
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Paul,
Thanks for addressing the weight issue. Lee Schipper did so too. My point is that - according to the 1991 Resolution - today's extreme average power and performance levels are the real malefactor behind fuel spilling and 120 grams not being achievable at low costs. I study car trends and performances since the 60s. My first car, a SAAB 96, driven by Eric Carlsson has won in those days the toughest rallies with 60 HP. Nowadays, it is hard to buy cars with 60 HP, >100 HP is the minimum though all cars can easily run 120 km/h with 25 HP. So, ACEA naturally comes up with huge cost estimates for 120 grams supposing as rule of law that ever growing performances are left unrestricted. Thus to propell 1500 kg within 10 seconds to 100 km/h at 120 grams CO2 indeed brings about a lot of add-on technology. This is the real taboo&barrier to 120 grams - or even better as needed post Kyoto. ECMT Ministers in 1991 had the courage to point at this dilemma, contributing the task of restricting power and speed not to the market but to the EU and governments. Markets and suppliers need an equal level playing field, and limiting power/performance levels through EU regulation is crucial to liberate the car manufacturers from their HP captivity [out of their rat race]. Only so 120 grams (and even less if dimensions and weight drop) are achievable. Selling speed must become out-of-date!
In my view weight is secondary. Current weight reductions are primarily dedicated to improving performance. Society is not served by high speeds and "sporty" accelerations. Current high dynamics are equally risk enhancing despite all technical tricks to compensate driver's failures. German Autobahn culture and practice is the real culprit in sustained daily over-dynamics - compelling manufacturers to offer at least 100HP/1000 kg ratios. Society can afford one offer: less fun for a few drivers who are speed-addict. The supply side must in the end learn to live with fair performance restrictions as long as they can market the same numbers of cars, which indeed must compete for market share with all fancy features other than performance.
Post #73
Posted Tuesday, May 27, 2008 4:10 PM
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A few remarks before leaving for Leipzig (and contributing to our CO2 atmospheric stock!)

1) Transport sector should bear the same GHG emissions burden as other sectors, no more, not less. The efficiency rule is well known, it means the same “price” for each ton of CO2-e emitted whatever the source. This involves avoiding specific modal or fuel share (e.g. biofuels) targets. The consequence would probably be that transport as a whole would incur less reductions than other sectors, but some least cost CO2 savings would be made within the transport sector: regarding potential behavioural adaptations this is not a monolithic sector.

This efficiency rule can be dismissed in the transport sector for political purposes but policy makers should be made aware of this efficiency loss, meaning that the other sectors would have to make supplementary efforts.

2) Fuel prices do have an impact on fuel consumption and distances travelled. If not, how to explain such a difference in fleet fuel efficiency and urban sprawl between e.g. US/Canada and Europe? The literature is definite at least on the recent past behaviours: reviews of hundred of studies confirm short-term price-elasticities of fuel consumption between –0.2 and –0.3 and long-term (> 1 year) elasticities between –0.6 and –0.8 (Graham and Glaister, 2000; Brons et al, 2006).

Recent US studies point at decreasing short-term elasticities: there is a possible short-term “lock-in” in car dependency and mileage in the US but does it preclude effective reductions in the long term?

3) So market instruments like tax do work. They have an impact on consumer choices and therefore on industrial decisions of carmakers. The issue is to fine-tune and balance the incentives between carmakers and end-users as decision makers in their personal travel. The lack of incentive on consumers is indirectly a lack of incentive for carmakers: how could they offer high efficiency vehicles if nobody want to buy them and prefer SUV?

4) Regarding the incentives on consumers we should not rely on oil price. Such a current high level could give way to new fossil sources (e.g. unconventional oils, coal to liquid), with ever increasing CO2 emissions.

5) Increasing fuel taxes encounters obvious social opposition. There is also a reluctance from countries to harmonise their fiscal policy. This is why integrating transport in emission trading schemes (ETS in EU or possible akin system in the US) could be effective. Combined with mechanisms of compensation through free allocations of quotas to households this could gain some acceptability.

Post #74
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