The Road from Kyoto

FTkyoto ok 19/10/00 11:39 Page 1 INTERNATIONAL ENERGY AGENCY THE ROAD FROM KYOTO Current CO2 and Transport Policies in the IEA gardekyoto ok 19/10/00 11:41 Page 1 INTERNATIONAL ENERGY AGENCY THE ROAD FROM KYOTO Current CO2 and Transport Policies in the IEA Foreword FOREWORD Transport accounts for almost a third of total final energy consumption in IEA countries, and 80% of that amount is in the form of road transport. Cars and trucks will be the principal source of carbon dioxide emissions in the foreseeable future. The central role of transport in economic activity and its pervasive influence on every day life make it complex and politically difficult to change. CO2 emissions are just one of many policy concerns, such as safety, urban quality, local air pollution, noise and congestion, that transport raises. Government at many levels — local, regional and national — deals with fuel taxation, urban and regional planning, transport infrastructure investments and public transport. These activities need to be co-ordinated to achieve an effective transport policy in relation to oil security and climate change. “The Road from Kyoto” reviews and offers insights into how governments are grappling with the complexity of transport and CO2 policy making. It examines the transport sector from the perspective of the emissions reduction commitments made under the 1997 Kyoto Protocol. It identifies the components of transport that affect CO2 emissions and details policies that contribute to emissions reduction. It presents detailed accounts of the current and future situation in six IEA countries — Denmark, Germany, the Netherlands, Sweden, the United Kingdom, as well as the European Union as a whole and the United States. Policies and measures directly targeting CO2 reduction, as well as those that have an indirect impact on climate change in these six countries, are reviewed. Finally, the lessons learned in each country are discussed. Robert Priddle Executive Director 3 Acknowledgements ACKNOWLEDGEMENTS This report is part of a series of forthcoming IEA publications addressing domestic policies and measures to reduce CO2 emissions. A short report focusing on emission reduction opportunities from fuel economy improvement will be available in November 2000, and a full-length book covering a wide range of transportation policies and measures will be published early in 2001. This publication is a joint effort of two divisions of the Office of Energy Efficiency, Technology and R&D under the direction of Hans-Jørgen Koch: the Energy Efficiency Policy Analysis Division and the Energy Technology Policy Division. This work has been supervised by Carmen Difiglio. The main contributors to this study are Lee Schipper, Céline Marie, Lew Fulton, Michael Landwehr and Roger Gorham (now with the World Bank). They are grateful for discussions with many national experts and for their helpful co-operation in providing and verifying factual information. Preparation of the manuscript was the responsibility of Céline Marie, with the editing assistance of Bill Maly and Scott Sullivan. The production assistance of Corinne Hayworth and Muriel Custodio added significantly to the material presented. 5 Table of Contents TABLE OF CONTENTS Foreword. 3 Acknowledgements . 5 Introduction . 11 Transport in the Framework of the Kyoto Protocol. 11 Linking Energy, Transport, and Environment. 12 The Purpose of this Book . 13 Chapter 1: The CO2 Problem — The Policy Imperative after Kyoto . 15 Trends in CO2 Emissions from Transport. 15 Where to Look for CO2 Savings? . 17 CO2 Reductions in the Context of Transport . 18 Chapter 2: Analysing Policies to Reduce Carbon Emissions 21 Linking Transport with the Environment and CO2: the Decomposition Approach . 21 Policy Categorisation in the Decomposition Framework . 27 Other Important Aspects of Policy Analysis . 28 Chapter 3: Denmark . 33 Background . 33 Evolution of Transport-CO2 Policy . 36 Selected Transport-CO2 Initiatives . 41 Conclusions . 45 7 Table of Contents Chapter 4: Germany . 47 Background . 47 Evolution of Transport-CO2 Policy . 50 Selected Transport-CO2 Initiatives . 54 Conclusions . 60 Chapter 5: The Netherlands . 61 Background . 61 Evolution of Transport-CO2 Policy . 64 Selected Transport-CO2 Initiatives . 68 Conclusions . 72 Chapter 6: Sweden . 75 Background . 75 Evolution of Transport-CO2 Policy . 79 Selected Transport-CO2 Initiatives . 83 Conclusions . 86 Chapter 7: The United Kingdom . 89 Background . 89 Evolution of Transport-CO2 Policy . 93 Selected Transport-CO2 Initiatives . 96 Conclusions . 101 Chapter 8: European Union . 103 Background . 103 Evolution of Transport-CO2 Policy . 106 Selected Transport-CO2 Initiatives . 111 Conclusions . 116 8 Table of Contents Chapter 9: The United States . 119 Background . 119 Evolution of Transport-CO2 Policy . 124 Selected Transport-CO2 Initiatives . 127 Conclusions . 138 Summary and Conclusions . 141 Key Findings . 141 Ingredients for Successful Policy . 151 The Outlook. 153 References . 155 9 Introduction INTRODUCTION Transport in the Framework of the Kyoto Protocol In December 1997, leaders of the world’s governments met in Kyoto, Japan, to discuss a plan for reducing greenhouse gas emissions from anthropogenic sources, particularly carbon emissions from the use of fossil fuels. While expectations and commitments under the Kyoto Protocol varied greatly among countries, all parties recognised the key role that transportation has played in increasing emissions from fossil fuels. World-wide CO2 emissions from fuel combustion have increased over the past 30 years and transport’s share of these emissions has also increased. From 1971 to 1997, CO2 emissions from the transport sector nearly doubled in OECD countries, and the sector’s share of total emissions climbed from 19.3 percent to 22.7 percent. Within the transport sector, motorised road traffic accounts for the vast majority of CO2 emissions. In 1997, road transport produced 81 percent of transport-related CO2 emissions in OECD countries (IEA 1999), of which 60 percent came from automobiles and household light trucks1. The effort by IEA countries to control carbon emissions has so far been focused on road traffic in general, and cars and light trucks in particular. Even before the Kyoto meeting, the IEA had noted and studied the role of transport in rising CO2 emissions. The last of several reports on the subject was Transport, Energy and Climate Change, which appeared in 1997, and gave an overview of efforts by IEA countries to address rising emissions from transportation. It explored the “pragmatic scope for policy making.” The book you are reading carries forward the Agency’s earlier work and provides a tighter focus. It explores recent developments in the policies of six Member countries on road traffic. We review policies that affect 1. The term “light trucks” refers to small passenger vans and sport-utility vehicles, as well as ordinary light trucks, such as pickup trucks, that are used almost exclusively for private, not for goods transport purposes. 11 Introduction transport activity, the fuels used and the amount of fuel consumed per unit of activity in different vehicles. These policies include fuel pricing and other fiscal measures, administrative and regulatory measures and other incentives, including voluntary agreements. Not all the policies considered are aimed at CO2 reduction, but all affect it in one way or another. The emphasis here is on which national policies are now in place, when and how they were developed, and where countries appear to be heading in the development of new policies. We review policies that address both technologies and behaviour. We look at some of the most recent adjustments to policies, both those that were underway before the Kyoto meeting took place and those that have been adopted in response to the Kyoto Protocol: one hope is that, by exploring transport policy-making in IEA Member countries, we can learn which policies appear most practical, which are the most difficult to implement, and how experience varies across countries. We can also see what has been accomplished and what work remains for potential future policies. Future volumes in this series will further explore policies and measures for reducing CO2 emissions in transport. A short report on fuel economy improvement is being published concurrently with this report. Linking Energy, Transport, and Environment Reviewing policies and measures that reduce carbon emissions directly is a straightforward affair. More complicated, but equally important, is the review of policies and measures that work indirectly — mainly through transport and environmental authorities. We attempt to cover both types of policy in this book. Some of these indirect components may be unfamiliar to the energy policy community, but they have become central to national strategies. They typically vary from country to country. Some policies are more or less practical depending on a given country’s particular situation. Consideration of what makes each country unique, and what is common across countries, is also to be found here. CO2 emissions reduction is clearly high on the agenda of energy ministries in IEA countries. None of them starts with a clean slate. In every IEA country there are already myriad policies and measures in place 12 Introduction that affect CO2 emissions. For this reason, it is important to look beyond CO2 policies, narrowly defined, and to include policies that affect other spheres of interest and influence. The Purpose

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