Green growth and transport

Stephen Perkins
International Transport Forum
Discussion paper 2011 - 02
February 2011

Transport figures prominently on green growth agendas. The reason is twofold. First, transport has major environmental impacts in terms of greenhouse gas emissions, local air emissions and noise. And managing congestion more effectively is part of the broader agenda for more sustainable development and better use of resources invested in infrastructure. Second, a large part of public expenditure to stimulate green growth is directed at transport sector industries. This concerns most notably alternative vehicles, and particularly electric cars, a key part of strategies to decarbonise transport. Several countries also financed car scrapping and replacement schemes as a short term response to the 2008 financial crisis. The primary goal here was counter‐cyclical stimulus for the car manufacturing industry with, in most cases, a secondary goal of reducing CO2 emissions and fuel consumption through fleet renewal.

Some governments also include investment in high speed rail as a central element of longer term green growth policies, aiming at a shift in passenger traffic from cars and short haul aviation to rail. Green growth is a useful paradigm that re‐packages several existing concepts, including durable economic activity, reduced environmental impact and sustained growth in high quality jobs, under one banner and in such a way as to frame coherent, cross‐sectoral policies. But focusing on green growth as such does not obviate the need for governments to assess policies carefully according to their long‐term economic, environmental and social impacts. There are tradeoffs between the various dimensions of green growth. Reducing emissions, for example, comes at a cost to road users and to taxpayers and as green growth policies spread it may be necessary to review the way the transport sector is taxed and contributes to aggregate tax revenue (Van Dender and Crist 2010).

This section of the report briefly examines policies to support electric vehicles, vehicle replacement schemes and high speed rail and reviews the political economy of introducing congestion charges from experience to date with charging systems around the world. It ends with a review of indicators developed for the assessment of transport investments and policies. Assessment methodology is relatively mature in this sector and the tools developed to support transport sector decision‐making in some countries provide a good basis for the assessment of green growth apolicies cross the economy.

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