Leveraging the Cost of Transport Emissions to Grow Decarbonisation Approaches

Creating a circular transport economy

There is a big difference between net-zero transport and a zero-emission transport. The world's largest airline by revenue and value, Delta, already claims to be net-zero. In contrast, the decarbonisation plans of UK governments suggest that net-zero rail transport will not be achieved until nearer 2050. Vehicles described as being manufactured net-zero now dominate electric vehicles car sales, but most bus and rail operators suggest dates between 2030 and 2050 for completing the decarbonisation of their fleets. Many transport authorities have made commitments to reach net-zero by 2045 or later, recognising that some transport, particularly HGVs, will take longer to decarbonise than others. The concept of net-zero means creating an ongoing circular transport economy process to put back as much natural resource as we take out, but greater consistency and clarity is needed in the way these net-zero processes are presented to help manage the transition process.

Improving carbon offset transparency

Partly to support net-zero claims by business, voluntary carbon markets are growing rapidly. With the voluntary carbon offsetting approach, a polluter with no easy choice of a zero-carbon option pays others to increase natural carbon absorption. Until recently there was little way to confirm that any voluntary offsetting scheme was actually making a meaningful contribution to cutting emissions, but this looks set to change as UK companies such as Sylvera and BeZero rate carbon offsets to improve transparency about the carbon reduction being achieved. The cash generated from carbon offset purchases provides vital financial support for many projects delivering climate action.

Sometimes the most polluting sectors need to act faster, so the world's largest airlines have typically stated far shorter timescales for achieving net-zero than less polluting transport modes. If net-zero is realistic for the world's largest airline, and the cost of transport emissions can be leveraged to grow decarbonisation approaches, what other parts of the transport system could move faster with net-zero commitments?

Growing local sustainable transport design

Progress has been glacial expanding nationally and internationally regulated carbon markets and increasing taxes on emissions. Until the political obstacles to national schemes can be overcome it makes sense to grow more local and voluntary approaches, so that paying for carbon emissions becomes increasingly normal business. We often think of market design as being exclusively the responsibility of national and international governments, but local market design for sustainable transport can be progressed far faster and more equitably.

For example, it is already within the power of any local authority to introduce a road pricing scheme charging travellers at a rate equivalent to the full cost of the carbon emissions. Most local authorities choose not to make such charges because they fear that their areas would be perceived as being less competitive places to live and work, compared with authorities that freeload their emissions on the planet. However, if the revenue from the road pricing is used to fund local carbon offsetting schemes, then the local authority could become a fairer and more competitive place to live and work. The increased competitiveness and opportunity associated with attracting cleaner future businesses is often more important than the fear of losing more polluting traditional activities, as several Scandinavian cities and regions have shown.

Implementing net-zero at the right time

Local action can also be designed to be much fairer. Implementing net-zero too early in the decarbonisation process would add at least a £ trillion to transport costs overseen by local authorities. In the latest BEIS (Department for Business, Energy & Industrial Strategy) data, transport emissions per capita range from less than 1.5 tonnes per person in some Council areas to over 5 tonnes per person in other areas. These averages also mask wide variations within each local area with some people, often the least wealthy, having very low emissions associated with their travel whilst others emitting well over 10 tonnes per year. Carbon is currently trading in regulated markets at around £75 per tonne. If transport emissions were also regulated it is expected that the overall regulated market price would rise. Voluntary markets have lower prices, but as transparency in these markets grows prices are expected to rise. Currently, transport operators offsetting their emissions, pay typically upwards of £10 per tonne for verified nature-based offsets.

Recognising the diversity of needs and capabilities

The Climate Change Committee has recommended a much clearer net-zero delivery framework within the UK where the relative roles and responsibilities of local and central government are far better defined. The local authority role will be particularly important in securing a just transition that benefits all communities recognising the diversity of needs and capabilities across the country.

Local authorities have been queuing up to declare climate emergencies, so can this enthusiasm be used to move to the next step of becoming net-zero? So far, climate emergency declarations have been used more for political capital than any practical emissions reduction benefit. Perhaps the next step for these authorities could be a short-term net-zero commitment, based initially on purchases of offsets to help grow the decarbonisation economy. Viewing emissions within each local area in terms of hard cash may help to focus minds on reducing costs, including supporting local offsetting activities.

Low-cost incentives

Net-zero transport strategies for central and local government include both low and high-cost changes. Far more could be done quickly to implement the low-cost changes such as introducing incentives to access more goods and services locally, reversing the current trends to close local facilities as part of short-sighted cost saving initiatives. By enabling transport purchasers and providers to interact in new and more social ways, local decarbonisation capabilities can be grown far more quickly than waiting for national regulatory changes. This requires a shift of mindset for the transport sector from business models based predominantly on the supply and demand for travel, to business models based on investing in people and places to reduce travel demand and emissions.

Net-zero: a mechanism for investment

Some transport emissions will need to be offset for at least the next few decades. The growth in voluntary offsetting of transport emissions is sometimes seen as threat to more regulated approaches if net-zero is viewed as an end point rather than a mechanism for investment. Creating new revenue streams for good projects should pave the way towards better and more sustainable regulation and taxation. The decarbonisation of all transport emissions will take time, but net-zero should be something everyone can aim for in the short-term, not just large airlines and car manufacturers.

More details about these and other suggested ways of developing new business models for sustainable transport have recently been published by Scotland's transport think tank, Scottish Transport Studies Group https://stsg.org/a-new-look-at-making-sustainable-transport-work-for-everyone

Derek Halden is a director of DHC Loop Connections, and secretary of Scotland's transport think tank STSG