Policies for sustainable transport (National/EU/Global)

Content Criteria for successful policies Categorisation of policies (policy instruments) The need for making policy packages Some selected policy instruments Examples of policy packages for freight and long- distance (>100 km) travel

Climate scenario by the Swedish Transport Administration

Policies for sustainable transport – Categorization A: Type of policy Administrative (emission standards, speed limits etc) Economical Information Infrastructure/ Built environment

Policies for sustainable transport – Categorization B: Actor level Global EU (or similar) National Regional Local /City

What is required of optimal policy instruments? Key criteria. They should: Be effective in achieving the target (climate, safety etc) Be economically efficient (e.g. low cost per kg CO2 saved) Be acceptable by politicians and the public Be technically feasible (e.g. GPS)

Policies for sustainable transport – Categorization C: What change is to be made in the transport system Policies that improve alternatives with a small environmental impact (e.g. Increased rail freight capacity, new HSR lines, extension of cycling lanes) Policies that limit volumes of transport by car, truck and air, for instance by by letting them pay for emissions/resource use. (e.g. Heavy-vehicle fees, climate tax on aviation, congestion charging) Policies promoting efficient vehicles and new ”clean” fuels. (research and development, emission standards etc)

Policies for sustainable transport – Categorization C: What change is to be made in the transport system Policies that improve alternatives with a small environmental impact (e.g. Increased rail freight capacity, new HSR lines, extension of cycling lanes) Policies that limit volumes of transport by car, truck and air, for instance by by letting them pay for emissions/resource use. (e.g. Heavy-vehicle fees, climate tax on aviation, congestion charging) Policies promoting efficient vehicles and new ”clean” fuels. (research and development, emission standards etc)

Policies for sustainable transport – Categorization C: What change is to be made in the transport system Policies that improve alternatives with a small environmental impact (e.g. Increased rail freight capacity, new HSR lines, extension of cycling lanes) Policies that limit volumes of transport by car, truck and air, for instance by by letting them pay for emissions/resource use. (e.g. Heavy-vehicle fees, climate tax on aviation, congestion charging) Policies promoting efficient vehicles and new ”clean” fuels. (research and development, emission standards etc)

Many studies show that it is in general a good idea to combine policy instruments into packages (OPTIC, STEP) Improve alternatives + Taxes for emissions etc Reasons: To get a package that can lead to target achievement and be accepted by politicians and the public Synergies between measures (dense cities  improved public transport) Economic policy instruments like heavy-vehicle fees may fund new infrastructure People have different travel needs

Swiss policy package aiming at limiting truck transport passing through Switzerland. Stick/Push A heavy vehicle fee related to emissions Carrots/Pull 2/3 of the revenue should be earmarked for funding two new rail links across the Alps 1/3 of the revenue of the fee should be allocated to the cantons An increase in maximum truck weight from 28 to 40 tons Combined transport should be subsidised.

What is required of optimal policy instruments? They should: Be effective in achieving the target (climate, safety etc) Be economically efficient (e.g. low cost per kg CO2 saved) Be acceptable by politicians and the public Be technically feasible (e.g. GPS)

Some selected Policy instruments

EU emission standards for new cars Holds for the average of new passenger cars sold in EU- 27: Until 2015: Max 130 g CO2/ km Until 2021: Max 95 g CO2/ km Until 2025: Proposal of g CO2/ km

Specific emissions from new cars in the EU

Effects of taxes Changes the behaviour of those that are taxed Give revenues to government (or the like)

Fuel taxes Generally used in almost all countries, especially in Europe Often a combination of CO2- and energy taxes.

Are fuel taxes enough to make people buy vehicles with low emissions?

Generally customers only consider fuel costs for the coming 3-5 years. Therefore, some incentives at the moment of purchase is also needed. Vehicle premiums for ”green cars”, e.g SEK for new cars emitting less than 50 g CO2/km Bonus-malus

Cap and Trade system A cap (maximum total emissions level) is set for a certain type of emissions, like CO2. The cap is then gradually lowered over time so that total emissions are reduced. ”Emission permits” are distributed according to some principle, either for free or by auctioning. Then, those companies that easily can reduce their emissions can do so and sell some of their emission rights on the market. The idea is that emissions shall be reduced where it is cheapest to do so

Example Cap and Trade system – The EU Emission Trading System (ETS)

In the EU ETS power production and most of the industry are included. Currently about half of emission permits are auctioned. Aviation is included from 2012, but not the rest of the transport sector (85% of emission permits are given for free) At present very low price on emission permits, about 6 Euro per tonne CO2. The Swedish CO2-tax for road transport is 108 Euro per tonne CO2

Fuel taxes versus Cap and Trade system

National infrastructure planning ”predict-and-provide” paradigm still common -Forecast large traffic volumes from past trends -Supply with infrastructure according to those trends, primarily for cars -New car infrastructure will attract more private car traffic -A ”self-fulfilling prophecy” This is still what characterizes Swedish National Transport Planning.

Infrastructure planning: The gap between words and action. Trafikverket (2012a)  +61% car traffic in the Stockholm region until Basis for CBA of potential projects. Trafikverket (2012b)  -5-15% car traffic in the Stockholm region until 2030 is needed if the climate targets should be achieved.

Policies for aviation

Different Value Added Tax in different sectors in Sweden

Different price on emissions for different sectors... (at10 Euro per ton in the ETS)

How taxes for air travel need to be increased if aviation should pay the same taxes as the road sector presently does. Källa: Åkerman, J., 2013 Nationella styrmedel för att minska klimatpåverkan från inrikes och utrikes flyg. Underlagsrapport till utredningen om fossilfri fordonstrafik, N 2012:05

Effects of closing the tax gap between aviation and road transport If taxes of air travel were raised to the same level as for road transport, the GHG emissions from aviation would be reduced by between 6 and 14%. It would also imply increased revenues for the Swedish government of 3,5-7 billion SEK. Källa: Åkerman, J., 2013 Nationella styrmedel för att minska klimatpåverkan från inrikes och utrikes flyg. Underlagsrapport till utredningen om fossilfri fordonstrafik, N 2012:05

Policy package for sustainable long distance travel Aim: To reduce emissions from long distance travel, especially air travel (but also car travel). 1. Policies that improve alternatives with a small climate impact - Building of new high speed rail lines - Integration of railway nets in Europe and on other continents (technical and organisational) - Improving punctuality and comfort of trains and buses - Demonstration programmes for videoconference equipment

Policies regarding long distance travel (continued) 2.Policies that limit volumes of transport by car and air, for instance by by letting them pay for emissions. - Higher price on greenhouse gas emissions from aviation - Value Added Tax also on aviation fuels - Intermediate solution: National taxes on departing air passengers 3. Policies promoting efficient vehicles and new ”clean” fuels. - Emission standards - Funding of research and development, e.g. for slower and more efficient aircraft - R&D for alternative fuels (but limited supply of bioenergy!)

The EU White paper goal on Long-distance Freight “30% of road freight over 300 km should shift to other modes such as rail or waterborne transport by 2030, and more than 50% by 2050, facilitated by efficient and green freight corridors. To meet this goal will also require appropriate infrastructure to be developed.” And the overall goal: 60% reduction of transport CO2 emissions until 2050

What would it mean for freight shares to achieve the goal for 2050?

Two strategies to reach the goal Policy package A: More efficient use of existing infrastructure Policy package B: Large scale investments in (mainly) new rail tracks

Policy package A: More efficient use of existing infrastructure 1. Policies that improve alternatives to truck transport Catalysing actor cooperation along rail corridors Up-grading of infrastructure and rolling stock to enable longer, heavier and faster freight trains High fees on congested train paths, but mostly refunded according to cargo carried More efficient terminals, not least in sea and inland ports Comparatively large role for IWW and short sea shipping 2. Policies that limit volumes of transport by truck Heavy-vehicle fees Stricter enforcement of regulations in road freight

Policy package B: Large scale investment in new rail tracks 1. Policies that improve alternatives to truck transport Large scale extension of rail links in the EU to increase capacity for freight and passengers Substantial shift within infrastructure budgets from road and to rail (including terminals and port hinterland connections) 2. Policies that limit volumes of transport by truck Heavy-vehicle fees Stricter enforcement of regulations in road freight

Bottom line Policies need to be both effective in reaching targets AND acceptable by politicians/the public. To accomplish that Polkicy packages need to be used Both improved alternatives (transport/communication) and economic policy instruments are necessary