2
Transport Efficiency Promotes Development and Protects the Environment
• Climate change widens financing gaps in transport. • Current carbon finance is inadequate to address transport’s needs. • Benefits to transport from broad sector reforms would reduce the cost of climate policies. • Integrating supply and demand actions requires institutional change and coordination.
Climate Policies, Transport, and Development Lower transport costs drive urbanization and growth. High local demand leads to higher productivity because unit costs for larger firms are lower and access to specialized inputs is easier. Lower transport costs increase competition in smaller cities and regions, further concentrating production and increasing productivity. Movement of workers to larger cities puts pressure on wages, leading to a new virtuous cycle of larger local markets, greater production scale, and higher real incomes (Krugman 1991). Putting development first, therefore, climate policies for transport should not come at the expense of mobility (World Bank 2008a).
The Direction of Transport Greenhouse Gas Emissions Because development and the demand for mobility go hand in hand, energy use in transport increases with per capita income. The main driver of increased fuel use is the expansion of roads, but high levels of national development are possible with very large differences in transport energy consumption. The h igh-income Asian economies, which developed rapidly after World War II, define the lower bound of per capita energy consumption (figure O.1). Numerous European countries have low per capita energy consumption for road transport relative Figure O.1 Road Transport Energy Consumption and per Capita Income 2.0 Qatar
Road sector energy consumption per capita (ktoe), 2007
1.8
United Arab Emirates
1.6 1.4
Canada
Saudi Arabia
1.2
United States
1.0 0.8 United Kingdom
Iran, Islamic Rep.
0.6 0.4
Russian Federation
Korea, Rep.
Denmark Singapore
0.2 0
5,000
Japan
Hong Kong SAR, China
Gabon 0
Switzerland
10,000
15,000 20,000 25,000 GDP per capita (2000 US$)
30,000
35,000
40,000
Source: World Bank 2010d. Note: GDP = gross domestic product, ktoe = kilotons oil equivalent.
Turning the Right Corner • http://dx.doi.org/10.1596/978-0-8213-9835-7