Transport and Climate Change Review of the debate and results Marc H. Juhel

1. SSATP Annual Meeting 2009 19-22 October 2009 Lilongwe, Malawi Transport and Climate Change Review of the debate and results Marc H. Juhel Sector Manager, Transport The World Bank

2. Outline • Global role of transport in climate change • Transport and Climate Change: Neglect of a development role for the transport sector? • Focus on infrastructure for low-carbon transport and adaptation

3. Global role of transport in climate changeWorld Development Report 2010 • Climate change as a development constraint • Act now: Inertia in transport • Act together: “Win-win” or “irrational unilateralism”? • No transfers to cooperate • Allocation of emission rights and market for offsets • Act differently: • Fiscal measures are not enough? • The importance of adaptation for Africa

4. Global role of transport in climate change • Consequences of unabated fossil fuel use • Focus on energy sector • Future of the transport sector • IEA • CCSP

5. Global role of transport in climate change • Consequences of business as usual • World income will have quadrupled by 2050. • Global temperatures will have gone up by 5o C. • Increase of 5o C risks catastrophic changes. • GHG releases from permafrost • Changing ocean currents • Melting of polar icecaps

6. Global role of transport in climate change • Objective in line with G8 commitments L’ Aquila 2o C • Peak of GHG emissions in 2020 • Reduction of emissions 50 – 80 %of today’s level • Delays risk “lock-in” into carbon-intensive infrastructure

7. Global role of transport in climate change • Ranking of areas of intervention • Energy efficiency • Renewable energy • R&D in energy technologies Important differences between energy and transport for all of these areas: decentralized sector

8. Global role of transport in climate change“Energy efficiency” uses a merely technological cost concept: McKinsey’s marginal abatement cost curve

9. Global role of transport in climate change • Technical cost concept misleading as it neglects user behavior and opportunity costs. • Opportunity costs of change in the transport sector are reflected in low price elasticities in the short-run. • They are in turn based on multi-dimensional consumer preferences and high fixed (sunk) costs in transport equipment and infrastructure. • They render a marginal cost consideration largely irrelevant.

10. Global role of transport in climate change • Basis of transport technology pessimism of the IPCC: Deep cuts only with unknown technologies

11. Global role of transport in climate change • Renewables in transport (biofuels, hydrogen) are uncertain future technologies. • Intersectoral scenarios: transport missing but in CCSP Near term contribution of car technologies reduced to low-carbon energy production: electric cars have a small role in de-carbonizing development.

12. Global role of transport in climate change • Policy advice: • Price individual car use according to social costs! • Additionally regulate the sector! • Build mass transit infrastructure!

13. Global role of transport in climate change • Regulation and mass transit infrastructure expansion motivated by scenarios: More than a misunderstanding?

14. Global role of transport in climate change • Political public demands higher reductions than advised by least cost scenario • Regulation plus pricing and strong efforts on modal shift are justified by • long GHG residence times, • long lifetimes of infrastructure whose investment is sunk, • pessimism on progress in individual car technologies.

15. Low income countries emitted and emit small amounts of CO2

16. Low income countries emitted and emit small amounts of CO2

17. African countries will be among those most affected by climate change

18. Mitigation agenda mainly for developed countriese.g. switch from SUV’s to average cars creates headroom for basic electricity supply

19. Climate policies for transport and Africa • “Price for carbon” will rise sharply in the next decades • Massive urban growth expected also for low income African countries; massive congestion costs expected • Motivates more emphasis on non-road sectors in infrastructure, independent of mitigation role of poor countries

20. Climate policies for transport and Africa • Emphasis on adaptation • Increasing risk of minor and major disruptions for certain types of infrastructure facilities: roads, bridges • Increase in road user costs in terms of vehicle operation costs and value of time is expected to be about 20 percent higher by 2050 without adaptation measures • Risk incidence of disruptions is expected to be 20 percent higher by 2050

21. Climate policies for transport and Africa • Emphasis on adaptation • Returns to adaptation are high, examples • Cost of adjusting culvert sizing is estimated to be 7 % of climate change costs by 2050 • Improvement of riverbank roads are estimated to cost only 9 % of damages by 2050 • Adaptation for bridges do pay of by 2050

22. Climate policies for transport and Africa • Emphasis on adaptation: overall costs • Deficit for all infrastructure to facilitate the movement of goods and services 2015 – 2030 for all of SS Africa $ 1032 bn. • Estimates of additional costs for adaptation vary between 3.1 bn. to 12.3 bn. annually for SSA from 2010 to 2030. • Median estimate: infrastructure costs will increase by 12 percent.

23. Conclusions • Transport sector contributes to climate change. • Adjustment to low-carbon sector will be costly and increase the sector’s share in emissions. • Low income countries have far lower emissions per head currently and historically. • African countries will be among the countries hit hardest. • Adaptation important, will drive up the costs of infrastructure investment and financing needs.

24. Thank you!