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Transport Funding stream

Transport oriented funding streams Fuel tax

Vehicle taxes

Public Sector Funding

Parking charges Road pricing Fare revenue*

Public transport subsidies

Business taxes (e.g. Versement Transport in France) Land related taxes and charges Grants, loans, tax transfers

Advertising Private sector investments

Green funding streams Environmental taxation and subsidies Clean Development Mechanism (CDM) Joint Implementation (JI)

International Emissions Trading (IET) Global Environmental Facility (GEF) Multilateral/ bilateral funds

Green Climate Fund, Fast Start Financing

+++: High contribution; ++: Medium contribution ; +: Low contribution; P: Low future potential, PP: Medium future potential, PPP: Large future potential * Fare revenue in many cases also accrues to the private sector, if the transport operator is private. * * Funding NAMAs could potentially be linked to the Avoid, Shift and Improve paradigm.

Table 8: Options for financing green transport Modified from: Sakamoto (2009)

■ Public funding at all levels (international – including Official Development Assistance and climate-related funds – national and local) is mobilised to support green transport;33

■ Private finance is leveraged, through the appropriate design of markets and the creation of consistent, long- term incentives to invest in green transport and through the application of public-private sector models to invest in and operate green transport systems (such as Bus Rapid Transit (BRT) systems); and

■ Financing flows from different sources are designed to complement each other, rather than work towards different goals.

A range of financing streams could contribute to providing support for green transport. These include not only funds and mechanisms devised specifically to

33. Decision-making tools (e.g. project appraisal) should be reformed to ensure consistency with supporting green transport. Independent environmental analyses for transportation projects may be used to screen potential projects before they occur. They should also fully incorporate the potential synergies and trade-offs between projects for different modes/ sectors. Promoting transversal programmes without a sectoral focus may also be a way of integrating land use, transport and social services spontaneously.

support green options, but also existing sources. Table 8 outlines these options and assesses their relative support with regards to the Avoid, Shift and Improve strategies.

Typically, public-sector funding provides a major part of the overall financing volume for transport infrastructure investments, at an average of 52.9 per cent in developing countries (UNCTAD 2008). Here, efforts are required to screen transport investments according to sustainability criteria, so that resources will flow towards green transport (Sakamoto 2009). The creation of a national green transport fund34

(mirroring existing road funds

found, for example, in Japan, fed by fuel and vehicle taxes) may be another option to guarantee adequate resources for green transport and help recoup any additional costs associated with green modes.

As transport investments are costly, increasingly public- private partnerships have become common. Such partnerships are also increasingly common in developing countries, for example in the operation of BRT systems.

34. Alternatively, such a fund could be set up under a wider “national green investment fund” which mobilises resources in all green sectors including transport.

401 +

+ P P P P


+++ ++


+++ ++ ++

+++ Shift

++ ++ ++

+++ + + +

++ ++ + +

++ P P P


+ / PPP PP


+++ ++

+ +

++ +++

++ P P

+/ P +

+ / PP PP

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