Prepared by Heather Allen Senior Manager Sustainable Development

Public transport and Carbon Trading some reflections

Overview

1 An overview of GHG and the Kyoto Mechanisms 2 EUTS and other cap and trade emission trading systems a global approach? 3 UITP activities in this field 4 Potential for Public Transport actors 5 Debate

An overview of GHG and the Kyoto Mechanisms

- 7 Gases covered Methane and Carbon dioxide most important to the transport sector -The Kyoto protocol came into force in Feb 2005 and will run out in 2012 and the next agreement period will be a key output of the UNFCCC meeting in December in Copenhagen. -Three main financing mechanisms within the protocol are: - Clean Development Mechanism (CDM) - Joint Implementation (JI) - Emissions trading such as the EUTS -The difference between the Kyoto mechanisms and the EUTS is
- Kyoto is a based on offsetting (financing an equivalent of emission reductions with another actor in another place) - EUTS is a cap and trade system based on setting the level of emissions allowed from a particular sector

-The voluntary market requires different verification such as Gold Standard

- Transactions and gains are usually higher from this market

The Carbon Market is a virtual marketplace where emissions are traded for money

CO2 Framework

Politicians and Decision Makers Looking to reduce emissions from transport and investment in PT

Operators and Industry Looking to show the most promising and affordable technologies and modal shift towards public transport

World Citizens Looking for affordable, frequent clean transport options that increase their quality of life

Other sectors such as energy, power generation or cement are already trading several mechanisms. Over the past two years the carbon market has doubled in value reaching 120 billion US$ (twelve times its value in 2005)

Usual priority initiatives for managing PT to reduce future GHG emissions

Strategies generally fall into two categories: technical solutions (e.g. vehicle efficiencies) and behavioural change solutions (e.g. mode shift).

C A T E G O R Y

Technical

Behaviour change

Fuel efficiency

Fleet composition

Running environment

Pricing

Land use

Education

Transport supply

A C T I O N

Source of electrical power

e.g. Hybrid buses CNG Bio gas

Segregated ROW

Off-peak PT pricing

Congestion /road pricing

Zoning & Implementation

Run more PT services to engender a mode shift

Public Soft actions Information/ eg travel smart communication campaigns

Examples of Carbon Schemes

- Voluntary offset schemes covers a wide range of schemes (note: the Kyoto mechanisms of JI, CDM and trading are also a sort of offset) and occur mainly at organisational/company level e.g. Selling/ auctioning credits or offsetting carbon from air travel - Carbon exchanges Bluenext; Chicago Climate Exchange CCX usually at a county or provincial level (eg King County USA) - National Schemes Switzerland - CO2 tax (+/- 7.6) applicable if CO2 reductions are not achieved or companies can opt to join a C&T scheme Canada covering large stationary emitters (power-thermal electricity; oil and gas; mining and manufacturing) a mandatory credit and baseline system with relative targets at an entity level or the recent revenue neutral carbon tax introduced in British Columbia Japan small voluntary trading scheme have been introduced but huge opposition from industry USA not ratified Kyoto but will certainly play a major role in the post 2012 regime and already there are a variety of voluntary or mandatory local and regional schemes (Regional GHG Initiative RGGI and the Climate Action Registry) Australia, New Zealand, UK and France all at various stages .

Main type of credits available depending on the scheme

Name ER VER REC CFI CER
Related to mandatory C&T mechanisms

Central Authority Emissions Reduction None Verified Emissions Reduction Renewable Energy Certificate Carbon Financial Instrument Certified Emissions Reduction Verification by a third party Various voluntary or mandatory usually US or Australia based Chicago climate exchange United Nations within scope of CDM

ERU NGAC

Emissions Reduction United Nations within scope of JI Unit New South Wales Greenhouse Credit New South Wales Greenhouse Gas Abatement Scheme

Public transport and carbon trading

In general transport is excluded and urban public transport in particular, however: - Aviation will be included into the EUTS (2011) - Almost no JI projects from transport and only 2 in CDM - Both the CDM and the JI projects need support at national governmental level but the The Bali Road Map approved in Dec 2007 opened the way for a sectorial approach. - Stationary transport infrastructure will most likely be included in some national schemes (e.g. UK). - Major hurdles on setting the base line and agreeing the boundaries of calculating the emissions (only tailpipe or scope 1 based on energy use for operations, or to include stationary facilities or should co benefits be included such as displaced trips, health, air quality etc). - Main focus is on technology based reductions and there is limited methodologies available to monitor, measure and report long term behaviour change such as eco driving.

What are the stumbling blocks for transport and PT in particular?

- Calculation of CO2 emissions in absolute terms or for offsetting - Difficulties in setting the baseline and in showing additionality to apply for UNFCCC approved projects - Verification and costs of registration (range for a CDM project is 5 000 30 000 just for registration and sometimes if it is verified by the UNFCCC it can cost more to verify than the credits generatedmaking smaller projects more attractive as costs are lower) often accompanied by a two year wait in the pipeline. - At present the amount of money generated is minimal - The issue of permanence of emission reductions is not resolved - Guarantee of single sale of emission reductions (reductions should not be double counted i.e. in voluntary market and at a national level is not resolved (not only for transport)

Barriers to setting the base line and comparing CO2 emissions

Occupancy Rate/Load Factor: As emissions are generally calculated as g/pkm, overestimating the occupancy rate can radically reduce the emissions per passenger. Accurate occupancy rates are therefore required to give a realistic estimations of tonnes of CO2 avoided but there are difficulties in collecting actual occupancy/load data. Vehicle Fleet Composition and Characteristics: Even within modes, the many variables ultimately affect the amount of CO2 emitted. These variables include engine size, fuel type, tyre pressure etc. As a wide variety of vehicle makes and models are often used by an operator, making collecting and managing data a resource intensive job. Using average emissions over a fleet means that this cannot be correlated with the driving routes for a high or lower emitting vehicle leading to inaccuracies. Driver Characteristics: The way in which a vehicle affects the fuel consumption, and therefore CO2 emissions. This includes driving speed, speed variations, accelerating and decelerating, cruising and breaking sometimes to do with driving style or traffic conditions. Whole Life Costs: Full life cycle analysis can includeCO2 emissions including vehicle manufacture, operation, maintenance, the manufacture of raw materials and energy generation. It is often easier to calculate and then compare the emissions that are created during operation. However, this will have implications when comparing modes where one has little or no direct emissions (see energy generation below). It should be clear which of these elements are included within a comparison. Energy Generation: The energy generation element is extremely important in inter-modal comparisons of emissions, particularly for modes with little or no direct emissions during the operation stage (e.g. rail). Electricity sources may also vary greatly, including hydroelectric (low CO2), nuclear (low CO2) and coal-fired (high CO2). Public transport operators do not necessarily have any influence over power generation. CO2 versus Greenhouse Gases: CO2 makes up a large proportion of the greenhouse gases emitted from transport. Care that the larger impact of other greenhouse gas emissions are not neglected (methane).

Risks and opportunities for the Public Transport sector

RISKS - As an actor in the transport sector we may be penalised due to the poor performance of others (road, air, maritime) so we should be well prepared so we do not end up paying for others. - We dont have the proper information to influence. - Urban transport does not yet benefit from the Carbon funds.. - We need to better understand the risks or opportunities in this complex but emerging market - There seems widespread agreement that there will be a price on carbon, it is a matter of when and how much.

Risks and opportunities for the Public Transport sector

OPPORTUNITIES -The market is immature giving an opportunity to influence .. -The Bali Road Map opens the door to sector/ programmatic possibilities and First in kind approaches. Urban transport could benefit from city wide measures . - The developing world sets to gain most as - We need to leverage arguments to gather statistics following a common methodology bundling similar projects to gain economies of scale ..(Call for action to UITP members) - Opportunity to engage with the carbon funds, the voluntary market and other actors . - The voluntary market is growing faster than the primary market and may provide the most interesting opportunities

Outlook
The Future Carbon dioxide emissions from the worlds transport sector have risen by 36.5% Road transport emissions have risen by 29% in industrialised countries and 61% in the other countries (mainly developing countries or countries in transition (IEA, 2006) World CO2 emissions from the transport sector are projected to increase by 140 % from 2000 to 2050, with the biggest increase in developing countries. Challenges Greenhouse gas emissions are very likely to be the main cause of current and future climate change The proportion of emissions being produced in developing countries is increasing rapidly, particularly in countries such as China, India and Indonesia. World CO2 emissions from the transport sector are projected to increase by 140 % from 2000 to 2050, with the biggest increase in developing countries. There are real risks for PT not to be recognised as being part of the solution!

UITP playing a role in the climate change debate

- Attended the UNFCCC meetings ( exhibition stand and side events) COPs 2002 - 2007 present active partnership Bridging the Gap (see presentation on Climate Change) - Focus Paper a Low Carbon Future with Public Transport (Oct 2006) - UITP working group on Communications and Climate Change (SD Commission) and the Climate Change Communications Gallery - A climate change inventory in preparation linking city or metropolitan climate change action plans with transport measures - European Activities Priority 2 of response to the Green Paper on Urban Transport Binding requirement to regulary measure CO2 emissions in agglomerations (job-catchment areas) -Creating a partnership with the EU Covenant of Mayors - Ongoing ..

Join us!
For more information contact Heather.allen@uitp.org