Tracking Transport 2019

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 – within multi-country regional blocs, at national and subnational levels, and within cities – 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 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 as vehicles emit pollutants with serious health impacts. The same goes for 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 like 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-wheels' 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 'life-cycle' vehicle regulation approach (including overlap with policies covering other sectors), it is necessary to begin by gathering and analysing data to monitor the life-cycle 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 2-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 and environmental damage costs incurred by burning fuel influence passenger and freight mobility choices. People may reduce discretionary car trips or 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 electric vehicles in circulation, eventually fuel taxes will not provide enough revenue for road infrastructure maintenance. Although electric vehicles 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.