Urban Transport in China – Car Crazy?

1. Urban Transport in China – Car Crazy? Lee SchipperEMBARQChina Environment Forum, WW Center Nov 30, 2006

2. EMBARQ • A catalyst for socially, financially, and environmentally sound solutions to the problems of urban mobility

3. EMBARQ • Established as a unique center within World Resources Institute in 2002, EMBARQ is now the hub of a network of centers for sustainable transport in developing countries. • Shell Foundation and Caterpillar Foundation are EMBARQ’s Global Strategic Partners, supporting EMBARQ projects worldwide • Additional EMBARQ supporters include • Hewlett Foundation • Netherlands Ministry of Foreign Affairs • BP • US AID • Asian Development Bank • Energy Foundation • Blue Moon Fund • US Environmental Protection Agency

4. Sustainable Transport: These are the Drivers, not CO2 • Economic Sustainability • Affordable to users • Attractive as business • Each mode or fuel bears full social costs • Social Sustainability • Promotes access for all, not just a few • Builds healthy and solid communities • Allows equal road space distribution for all transport modes • Minimizes travel time • Environmental Sustainability • Minimizes accidents and damage to human health • Leaves no burdens for future generations • Reduces greenhouse gas emissions – Not Yet Governance is The Roof Over these Pillars Integrating Mobility, Security, and Energy

5. WORLD PRIMARY OIL USE, 1965-2004 (Source: BP)

6. World Oil: The U.S. and China In Context(All figures in per capita terms) U.S. increment in oil use for cars and light trucks 2002-2003 was half of China’s total in 2003

7. Energy-Related CO2 Emissions by Region 2030 2003 24 Gt 37 Gt Source: IEA World Energy Outlook 2005 Global emissions grow by just over half between now and 2030, with the bulk of the increase coming from developing countries

8. The Bush Metric of Success–CO2/GDPChina Has Far Outpaced the US Source: IEA

9. CO2 Emissions from Road Transport Source: IEA

10. Access: People in China Move 12-14 Km/day, Urban Americans 40-45 km/day

11. Motorization in China: Déjà vu All Over Again? Source: EMBARQ Is rapid urbanization in China and other countries putting cities and cars on a collision course?

12. Rapid Motorization in Chinahttp://lnweb18.worldbank.org/eap/eap.nsf/Attachments/background+2/$File/China_Motorization.pdf • The Growth of the Automobile Industry • Pillar of national economy – or another battering ram? • Popularity – increase in demand and foreign investment • Low cost and high cost models, imports • Historic Trends and Future Projections • Automobile production from 509,000 in 1990 to 4.4 million in 2004 • China’s “car” stock from well under million in 1992 to 12 million in 2003 • Increasing contributor to air pollution, congestion, traffic fatalities • New Reality – “The Car is Out of the Bag” • New “Car” Fuel Economy Standards ~ 30 MPG (US effectively 24 MPG) • Emission and fuel quality standards catching up to US, Europe 1970s rural vehicle 2002 Buick Van

13. Cars and Urban Transport in China:Symbol for Much of the World? • Congestion: Cars and Other Traffic • Buses and people stuck in traffic • Building more roads makes problem worse • Tough policies called for – by whom? • Air Pollution: Too Many Vehicles • Enough old smokers to ruin air • New fuels, vehicles improving • Emissions from cars could offset improvements • Traffic Safety: People First • Walkers, cyclists main victims • Too many kinds of traffic in same place, unequal road space distribution • More cars and speed will kill more people

14. EMBARQ’s Scenarios for China • Illustrate and Quantify a World We Can’t See.. Yet • Reasonable estimates for “present values” • Growth based on nearby example -- Korea • Convergence with many other studies in the base case • Quantitative Assumption-Driven Outputs • Vehicles, vehicle distances, fuel consumption • Impacts of alternative fuels • Total CO2 emissions • Qualitative Results • Flesh and bones on the base case • Illustration of impact of “fuel efficiency” on total fuel use • Illustration of how a “livable cities” scenario might play out

15. EMBARQ’s Scenarios for China • Base Case – China has Korean car/GDP ratio in 2020 • 120-160 million cars, 12,000 km/car • 8-8.5 L/100 km if no new measures • Closer to 2 mn bbl/day oil in 2020 • Oil Saving Scenario – 40% as much oil, some CNG • Japanese/Euro level of fuel prices • 110-130 million cars, but less driving/car • Fuel economy standards, some hybrids and CNG • Integrated Transport - Livable cities with good transport • Much lower car ownership and use– avoiding the plague • Very small cars (incl. slow electrics, hybrids) to avoid space and congestion problems in cities • Serious BRT, Metro, car-use restraint, land-use planning – avoid Mexico

16. China’s New-Car Fuel Economy Standards: A Start Weight-class based • Car of given weight cannot use more than a given fuel use/km by tests • Will probably impact SUVs significantly Overall Impact Uncertain • 20-30% impact in each class • Will keep cars from becoming guzzlers • Will not prevent larger market shares of heavy, fuel intensive cars Technology not the problem • Key is car size, power, utilization • Manufacturers can choose techs. • Fuel taxes, externalities next?

17. Alternative Fuels or Fools? Tough Choices for China • Ethanol and other “Biofuels” • Modest experience, but high costs • Issue of land, water, pollution – what’s new here? • Scaling up may just be unreasonable • Fossil Alternatives • Lots of LPG and CNG, but these not real alternatives • Gas to liquids, but where’s the gas? • Coal to liquids – methanol or synthetic liquids? • A Third Way? Coal and Electrification? • Start with hybrids, battery electrics? • Coal to hydrogen/fuel cells with sequestration? • Electric drive now for most city vehicles?? Key Element – Fuel and Externality Pricing

18. Better Urban Transport: No Choice!

19. The Sustainability Challenge: Cars and CO2 Emissions in 2020 Sustainable Urban Mobility Saves Cities, Fuel, and Above all, Greenhouse Gas Emissions

20. GHG In China Not an Crucial Policy Driver: • Little Concrete Action on GHG from Transport • Wasted fuel, extra air pollution from bad traffic • Less than 15% of urban trips in cars, yet cities stuffed • Coal for oil could become China’s GHG nightmare • Some Motion on Fuel Quality and Fuel Economy • Increased stringency on fuel quality and emissions • China fuel economy standards, real concern about oil • Moves on fuel taxes likely next step -- revenue • Lip Service to the Real Threat – Urban Immobility • More vehicle use, congestion, accidents • Higher health and accident risks • Policy changes needed soon Numbers of cars, their Size, Use is Key

21. Transport Projects and CO2 Counting: Difficult Bean Counting for China • Rush to Sell “CO2 Avoided” in Developing Projects • Both fuels/vehicles and traffic changes (like BRT) • Most projects are small, changes within noise • Very difficult to measure or model changes • Various Mechanisms – in Order of Difficulty • Mayors make feel-good pledges, companies buy offsets • Actions like US Asia/Pacific Consortium – mostly hot air • Clean Development Mechanism: Tiny compared to the problem • The Challenge for China – Finding “Negacarbon” • Verification becomes a “less than otherwise” prospect • Overall growth swamps projects • Self interest – healthy cities, oil imports -- the real drivers

22. Conclusions: Will China Decarbonize? • Urban Transport Solutions is the Umbrella • Make room for 300 million more urbanites – land use planning • Scale up of bus rapid transit • Next steps – restraints on car use (congestion pricing?) • Clean Air Means Fewer Kilometers • Fuel economy standards a valuable first step • Real urban transport – not just token BRT -- reform next • Next steps – car restraints, protection for NMT • Fuel Economy and Alternative Fuels • Fuel economy is necessary but not sufficient • Alternative fuels prospects grim – competition for land • Main threat/hope – coal/decarbonized hydrogen? Avoiding the Multiple Problems of Too Many Cars Is Much Easier than Mitigating them when its too late!

23. Lee Schipper schipper@wri.org www.embarq.wri.org