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Issue # 3 (March 2013)

Key Areas for Transitioning to a Green Economy in the Urban Transport Sector The development of urban transport in Uzbekistan is an important factor at a time of rapid demographic growth, accelerated urbanization, comprehensive modernization of urban infrastructure and the formation of new industrial centers. Hence measures have been under way for a number of years to increase transport efficiency; modernize and upgrade the fleet of vehicles; speed up the pace of conversion of vehicles to compressed natural gas and liquefied gas; bolster the system of monitoring vehicle emissions; and expand the Tashkent metro. Despite the measures that have been taken, Uzbekistan’s urban transport system is inefficient and creates risks and problems for sustainable development in the long term. This is borne out by the following facts. First, the urban transport system in Uzbekistan is hampered by high financial, environmental and social costs. Total annual losses due to excessive energy consumption in the transport sector, associated environmental losses and idle time and traffic jams amount to $420.3 million. Second, the retention of the current model for developing urban transport in the long term could lead to a transportation breakdown and, as a result, become a drag on the development of cities. Specifically, if current trends in the transport sector continue, by 2030 there will be an average of 30 sq. m. of road per vehicle. This vehicle density is twice the permissible level. Third, reforms in transport and associated sectors will be necessary in order to achieve the goals of progressive structural transformation. Specifically, the implementation of new principles in the transport system will promote a change in the parameters and structure of demand for the products of a host of industries, including the auto industry, storage-battery manufacturers, etc. For example, the introduction of new guidelines (for energy consumption, emissions, etc.) in the transport sector will stimulate motor-vehicle production accordingly. Considering that such guidelines and standards are often used and may be used as tools of nontariff protectionism against motor-vehicle imports in many countries, these measures will help Comparison of fuel consumption by new vehicles using gasoline 15

Consumption above 7 l per 100 km Consumption up to 7 l per 100 km Hybrid or smart vehicles

10

0

Portugal Italy France Czech Rep. Norway Denmark Spain Ireland Greece Britain Netherlands Slovakia Germany Estonia Finland Hungary Sweden Croatia Uzbekistan Russia

5

Center for Economic Research 5, 1st blind alley, Usmon Nosir str. Tashkent 100070, Uzbekistan Tel: +99871 150-02-02, 281-45-56/57/58/59; Fax: +99871 281-45-48 www.cer.uz

ensure that Uzbek vehicles become consistently competitive in the long term. These facts show why it is imperative to move to a new, sustainable model for developing urban transport. Sustainable (“green”) transport1 • provides high mobility with minimal environmental, social and financial costs; • supports the economy’s competitive efforts and maintains a balance in spatial development; • helps achieve sustainable development in the long term . The following recommendations are designed to spur the development of sustainable urban transport systems: 1. Improve technologies and optimize traffic flows The following areas of reform to optimize traffic and improve technologies for the development of green transport are recommended. The proposed reform areas are intended for the city of Tashkent, considering that Tashkent accounts for the bulk of urban transport costs: 1) The installation of an automated traffic control system will make it possible to ease the traffic load on the main transportation routes. This is an integrated road monitoring and safety control system. Specifically, the system is capable of estimating the traffic load on roads and manage traffic-light operation accordingly. Installation of the system at 64 key intersections in the city of Tashkent will cost $175,000. This will make possible a 10% increase in the traffic capacity of streets and will reduce annual losses by $9.92 million. 2) The implementation of satellite navigation systems will increase traffic efficiency significantly, lower fuel costs and improve safety thanks to continuous traffic monitoring. It is proposed that a satellite navigation system initially be introduced for 4,500 vehicles in the city Average speed of rush-hour traffic flow in selected large cities Maglie, Italy Helsinki Bucharest Copenhagen Barcelona Brussels Athens Madrid Budapest Vienna Warsaw London Bristol Tashkent Moscow 0

5

10

10

15 14,5 13,8

15

20

20

25 24 23 22,8 22,3 22

25

28

30

32,6

35

36

37,4

40

Speed, km/h

The Center for Economic Research is jointly supported by the United Nations Development Programme (UNDP) and the Government of Uzbekistan The views and opinions expressed in this material do not necessarily reflect the official positions of the Center for Economic Research or the United Nations Development Programme.

UNDP Country Office in Uzbekistan 4, Taras Shevchenko str. Tashkent 100029, Uzbekistan Tel: +99871 120-34-50, 120-61-67; Fax: +99871 120-34-85 www.undp.uz


Cost indicators for alternative types of motor fuel Fuel type

Production cost, %

Cost per unit of distance traveled by vehicle, %

100

100

CNG (Compressed natural gas)

45

75-85

65

90-130

Methanol

110

120

120

170

Synthetic gasoline

160

120

Gasoline made from oil Electricity Ethanol

of Tashkent . The annual benefit from reducing fuel consumption for 4,500 vehicles will be $5.6 million. The cost of the system for 4,500 vehicles will be $4.9 million. As a result, the payback period for the system will not be more than 10 months. 3) Construction of new interchanges, overpasses and highway lanes. The growth of vehicle density will require further development of the road infrastructure. It is advisable, therefore, to build five new interchanges in the capital, which will call for an investment of $400 million. This set of measures alone will increase the traffic capacity of streets by 15%, enable Tashkent to achieve the European standard of 10 km of road per square kilometer of urban area. The increase in traffic capacity and fuel savings will cut annual costs by $24.1 million. 4) The development of urban public transport is an important factor in achieving “sustainable development for cities,” by providing mobility for all strata of the population; reducing emissions; solving problems related to traffic slowdowns and bottlenecks; and improving living standards. The institutional measures recommended in the memorandum will help improve the efficiency and routinize the operating principles of public transport. 5) Implementation and wide use of alternative fuels. In Uzbekistan, only hydrocarbon gas fuels offer a realistic alternative to traditional types of oil fuel in terms of cost, consumption and emissions. 6) Modernization of vehicles being manufactured; future introduction of vehicles with hybrid engines. An important condition for transitioning o a green economy in the transport sector and for making Uzbekmade vehicles consistently competitive is that the vehicles being produced be modernized. It is therefore essential in the future that Uzbek vehicles meet Euro 4 standards, and then Euro 5 and Euro 6. Another priority is to introduce hybrid vehicles. The development of hybrid-based green transport will require an investment of $3 billion. This will save 144,000 tons of liquid fuel. The savings will amount to $106.2 million. The payback period will be 28 years. 2. Improve the regulatory framework for the development of sustainable transport A key to the development of green transport will be the tightening of

efficiency standards for fuel use and emission standards for domestic and imported vehicles. In this instance the introduction of new standards will be especially important for preserving the Uzbek auto industry’s position in foreign markets. The first part of the Euro 4 standard, which requires a 5% reduction of fuel consumption, should be implemented in 2014; the second – requiring a 10% decrease in fuel consumption by vehicles of all weight classes – in 2016. The implementation of this fuel-consumption standard should yield savings of 130,000 tons of fuel. The requirement of a further fuel-consumption reduction of 25% to 5.6 l per 100 km should be implemented for light vehicles by 2016, and by 2018 the fuel consumption level should be established at about 4.8 l per 100 km (Euro 5 standard). If this is done, an additional 190,000 tons of liquid fuel will be saved. Based on the current needs for making the republic’s auto industry more competitive, a program must be drawn up for a phased tightening of standards for vehicles produced and operated in Uzbekistan. 3. Reform the administrative system in the transport sector The transition to sustainable transport requires a comprehensive development policy for the sector that focuses on reducing transportation costs and supports efficient operation of the transport sector, but also allows the policies for development of green transport to be coordinated with long-range urban development plans, industrial policy and structural reforms. A unified government body should handle the formulation and coordination of the development policy for the transport sector. It is advisable at this stage to consider establishing a Main Administration for Transport and Transportation Lines under the Ministry of the Economy. This administration will formulate and coordinate government policy in the transport sector, based on the goals and priorities of the country’s development. The main administration will coordinate matters related to vehicular, river, rail, air, urban electric and industrial transport, as well as the transportation network (roads, railroads, rivers, ports, etc.) with the legal entities and sole proprietors that are part of them. Based on the priority areas of transport sector development defined by the Ministry of the Economy, khokimiyats (local administrations) must use integrated urban-planning information to regulate, plan, monitor and oversee what is happening at the municipal level. In the process, the khokimiyat unit that will be assigned all these functions – the Department for Licensing and Traffic Coordination for All Types of Passenger Transport – must be reorganized into the Department for the Development of Transport and Transportation Lines. State joint-stock companies in the transport and transportation lines sector should be relieved of the functions of government regulation and should only keep the functions of business entities, which will make it possible to focus their activities on improving economic performance and, as a result, may help substantially improve their efficiency.

Consumption characteristics of alternative types of motor fuel Fuel type Gasoline

CNG

Electricity Center for Economic Research 5, 1st blind alley, Usmon Nosir str. Tashkent 100070, Uzbekistan Tel: +99871 150-02-02, 281-45-56/57/58/59; Fax: +99871 281-45-48 www.cer.uz

Vehicle weight, kg

Cruising range, km

Speed, km/h

Energy consumption, kWh/km

Fueling time

1600/6 people

550

90

1,07

5 min

1700/6 people

170

90

0,91

5-10 min

1800/4 people

70

40-50

0,47

8-12 hours

The Center for Economic Research is jointly supported by the United Nations Development Programme (UNDP) and the Government of Uzbekistan The views and opinions expressed in this material do not necessarily reflect the official positions of the Center for Economic Research or the United Nations Development Programme.

UNDP Country Officer in Uzbekistan 4, Taras Shevchenko str. Tashkent 100029, Uzbekistan Tel: +99871 120-34-50, 120-61-67; Fax: +99871 120-34-85 www.undp.uz


Key Areas for Transitioning to a Green Economy in the Urban Transport Sector