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4 Quantifying the economic implications of green transport

To quantitatively assess the macroeconomic implications of investing in green transport at the global level, the study applied a modelling approach utilising the Millennium Institute’s T21 model.18

Within the multi-

sector green investment scenario in which 2 per cent of the global GDP is allocated for investment in greening a large number of sectors, transport was assumed to receive 17 per cent of the total.

This section describes the differences between investing the assumed additional amount in green transport and in the business-as-usual-scenario (BAU), including their macro-level implications up to the year 2050. Due to the scarcity of studies that employ the same modelling technique, the outcomes are to be interpreted as indicative of the direction of change that can be expected with green investment, and should be validated through further work. The figures should be assessed together with projections made by other models such as the IEA’s Mobility Model, to which comparisons are made in this section.

4.1 Transport trends under business as usual

Under BAU without additional investment, the total number of road vehicles19

increases rapidly. The stock

of light-duty vehicles (LDVs) in particular would grow from the current 0.8 billion to 2.2 billion by 2050.20


line with the future growth in total vehicle stock, travel volume would increase for both passenger and freight transport. In the year 2050, passenger transport would reach 103 trillion passengers per kilometre (pkm), whereas freight transport would be approximately 38 trillion tonnes per kilometre (tkm). Compared with baseline figures from IEA, these figures are higher,

18. The information contained within this section draws from modelling work conducted by the Millennium Institute (MI). Whilst every effort has been taken to accurately integrate the modelling results throughout the entire report, there may be certain figures which are subject to further refinement or corrections, based on the larger modelling process and changes in other sectors. Note also that the modelling process has been limited by the relative lack of standardised evidence and data, for example assumptions on employment in the transport sector, harmonised information on transport activity by city, region and country, standardised figures on transport externalities and the interrelationships between modes and sectors.

19. Includes both urban and non-urban, freight and passenger.

20. Others predict that this growth could even be higher. For example, IEA predicts the number of LDVs to reach 2.7 billion by 2050.

4.2 The Avoid, Shift and Improve strategy as a basis for redirecting investments

The transport sector will see massive investments in the coming decades, mainly through city planning, infrastructural works, public transport systems and

21. Of all passenger transport, IEA estimated, in terms of passenger-km per year (different from the measure in this model), 7 per cent to 6 per cent by rail, from 10 per cent in 2010 to 15 per cent in 2050 by air, and the remainder by road transport modes, in which 45-56 per cent of all passengers are carried by LDVs. Within road passenger transport, for which IEA reported total travel distance in km traveled by all road vehicles per year (same measure as in the model), LDVs account for 67-78 per cent of road passenger travel volume in 2010-2050.

22. The International Energy Agency (IEA) estimates the percentage of freight transport load, in terms of tonne-km per year, that is carried by road vehicles increases from 55 per cent in 2000 to 59 per cent in 2050.

23. These figures exclude the large level of informal labour in the transport sector (for example, the maintenance of vehicles, operation of micro buses in developing countries), which were not able to be estimated due to data restrictions. Such forms of employment may also benefit from the shift in investments towards a green scenario.


especially for freight where IEA predicts only 13 trillion tkm in the same year.

In BAU, for passenger transport LDVs would continue to dominate all transport modes with an increasing share (47 per cent in 2010 rising to 62 per cent in 2050) of the passenger travel load over the period, while the share of buses would decline from 25 per cent to 15 per cent.21

A steady share

of the passenger travel load (6-7 per cent) is expected to be by rail, and around 10 per cent by aviation. For freight transport, the volume carried by rail would decline from 55 per cent in 2010 to 52 per cent in 2050, contrasted with an increase in road-based transport (trucks).22

With regards to energy use and carbon emissions, both are projected to increase by nearly 50 per cent by 2030 and more than 80 per cent by 2050 in the BAU case. The modes that will contribute most to emissions in 2050 are LDVs (56 per cent), trucks (16 per cent) and aviation (18 per cent). By 2050 the CO2

emissions of the transport

sector would have increased to one fourth of global energy related CO2


In the BAU case, total employment in the transport sector, which is 67.9 million in 2009, will continue to grow by 1.3 per cent per year on average through to 2050 and reach approximately 116 million.23

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