Reforming Transportation for a Low-Carbon Economy

IMGXYZ2982IMGZYXTransportation greenhouse gas (GHG) emissions represent a common challenge to both the United States and European Union in transitioning to a low-carbon economy. Currently, neither the EU nor the United States is on schedule to meet its long-term goals of reducing total GHG emissions to 50-80 percent below 1990 levels by 2050 without major progress in cutting emissions from the transportation sector.

The United States and EU have just announced two distinctly different approaches to transitioning their transportation policies and practice to support low-carbon economies. The EU’s new approach is described in a March 2011 White Paper issued by the European Commission, A Single Transport Area: Smart Mobility for People and Businesses. Also this spring, the Obama administration proposed a new, six-year transportation funding bill that would provide $556 billion in federal assistance to advance a green transportation agenda.

At an event co-hosted by Carnegie Europe and Edelman│The Centre, with support from Caterpillar, panelists discussed how the differences and common objectives of these two approaches—one focused on policy and the other on direct federal investment—can benefit each other. Martin Porter, general manager of Edelman│The Centre, moderated.

Tackling U.S. Carbon Emissions

• Challenge: Transportation amounts to 40 percent of U.S. carbon emissions and 70 percent of U.S. oil consumption. However, Carnegie’s David Burwell pointed out that energy taxes remain so low that it is impossible to maintain adequate transportation infrastructures.


• Solution: Recently, President Obama outlined a new Low-Carbon Transport Proposal to invest  in transportation infrastructures. Burwell explained that the proposal is more flexible than previous policies, as it would provide more federal funding to be used at the local and federal levels, not only at the discretion of the state.  He explained that the proposal would promote low-carbon transportation through various initiatives:
  
  
  • The Transportation Leadership Award: This award would invest $32 billion over the course of six years in states and regions that further the US Department of Transportation’s strategic goals, which range from strengthening collaboration between different levels of government to encouraging the development of multimodal transportation.
  
  
  • Improving Livability: The administration’s strategy is to focus on mobility by improving highways and transit.  High-speed Rail: The Obama administration wants to develop a stronger high-speed railroad system, with an aim to provide high-speed rail service to 80 percent of Americans within twenty-five years.
  
  
  • National Infrastructure Bank: A bank will be set up to provide loans and grants to individual projects and broader activities of significance to the nation’s economic competitiveness.

Tackling EU Carbon Emissions

• Challenge: The EU remains heavily dependent on oil, with the transportation sector playing a large role in perpetuating that dependence. According to Matthias Ruete, Director-General for energy and transport in the European Commission, it is estimated that transportation will account for 50 percent of the overall share of emissions in the European Union by 2050. Any policy intended to change that must take into account the entire EU, reflecting the differences between Western Europe and Eastern Europe.


• Solution: Ruete outlined the following recommendations from the European Commission’s White Paper:
  • The Innovation Investment: The EU should invest more in innovation, including research, as well as developing frameworks for projects and regulations, which would provide a faster and cheaper transition to a more efficient and sustainable European transport system.
  
  
  • Infrastructure Investment: More investment should be geared toward strengthening infrastructure, such as better connections of port to the hinterland and connecting all major airports to the rail system. Jerome Bandry, EU government affairs manager at Caterpillar Inc., added that funding infrastructure is central and despite the heavy upfront costs, infrastructure enables growth and the creation of new jobs.
  
  
  • Establishing a Single European Transport Area: There is a need to ease the movement of freight and passengers within the borders of the European Union, while keeping the down costs and enhancing transport sustainability. Replacing national modes and systems with multinational ones will ease the process of integration.