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IPCC (1996, Chapter 21) noted many reasons why GHG mitigation in the transport sector has proved difficult. Transport activity is closely interwoven with infrastructure, lifestyles, economic development, and patterns of industrial production. Partly because of these complex links, experts do not always agree on the best mitigation strategy. Climate change and energy saving is usually a minor factor in decisions and policy in the sector, and mitigation strategies may not be implemented if they seem to reduce the benefits provided by the transport system to individuals and firms. Appropriate mixes of policies need to be designed for local situations. And policies can be very slow to take effect because of the inertia of the infrastructure, technologies, and practices associated with the existing transport system.
Stated preference surveys in the United States have shown that consumers would prefer to purchase energy efficient cars, and would be prepared to pay US$400-600 for each litre/100km reduction in fuel consumption (Bunch et al., 1993; US DOE, 1995). This is about the amount that would be expected from the fuel savings over the life of the car (Michaelis, 1996b). However, there is no evidence that this valuation of fuel economy is reflected in the car market. There may be several reasons. First, many vehicle purchasers have to work within budgets set by the size of loan they can obtain to buy a car, and such budgets are likely to be set independent of the amount they will have to spend on fuel. Where they have a number of high priorities in their vehicle choice such as comfort, size, safety, and performance, they will spend their budgets on those priorities rather than on energy efficient technologies that increase vehicle price. Second, vehicle manufacturers have no incentive to promote energy efficiency, and a strong interest in selling more sports utility vehicles and mini-vans where their profit margins are higher than for cars. The outcome can be viewed as a rational response to consumer preferences subject to a budget constraint, but it has been repeatedly noted in European government-industry discussions that marketing helps to shape those preferences (Dietz and Stern, 1993; Michaelis, 1996a).
Cars may also provide a good example of the principal-agent barrier. The first owner of a car may be more concerned with its status value and other aspects, and less concerned with cost minimization than subsequent owners. Secondhand owners’ preferences for cost minimization do appear to be reflected in the secondhand car market, where more fuel efficient cars tend to be more expensive (Daly and Mayer, 1983; Kahn, 1986), reflecting perhaps half to three quarters of the value of fuel savings they will offer (Michaelis, 1996a). The lack of control of vehicle users over technology is exacerbated by the concentration of the global car industry in Annex I countries, and in a small number of transnational companies (IPCC, 2000b).
While information on the fuel efficiency of vehicles is widely available, it may not be easy to find or assimilate for the average purchaser. Labelling laws and information programmes have been introduced in many countries to overcome this information gap (ECMT, 1997). Nevertheless, the fuel economy information on labels is usually obtained in standard test cycles, the information from which may be inaccurate, underestimating consumption in real driving conditions by 10%-20% (IPCC, 1996).
Car technology is also a good example of “lock-in”. A century of development has put the gasoline engine, and the infrastructure to maintain it and supply its fuel, in a virtually unassailable position. Technologies based on alternative fuels, batteries, or fuel cells will have to compete with gasoline engine performance and cost levels that continue to improve.
The phenomenon of lock-in can also be seen to apply to road transport more generally. Cars are preferred over other transport modes partly because of their intrinsic advantages in flexibility, convenience, comfort, and privacy. A car makes it possible to live in a suburban or rural area poorly served by public transport, taking advantage of low house prices and pleasant surroundings. However, there are also many sources of “positive returns to scale”, strengthening the incentives for using cars as their prevalence grows.
As car fleets have grown, modern western societies, cultures, and economies are increasingly built around motorized road transport. Car-oriented culture has charged cars with significance as a means of freedom, mobility and safety, a symbol of personal status and identity, and as one of the most important products in the industrial economy. Car-oriented infrastructure and settlement planning makes it hard to use any alternative transport mode. Many attempts to encourage a shift in planning provision away from cars, toward public and non-motorized transport also fail because of the strength of links among transport planners, construction firms and the financing institutions (e.g., Stenstadvold, 1995).
A second aspect of the lock-in to car transport is the result of economies of scale, and a century of R&D and learning from experience in car production. The real cost of owning and operating a car has declined over the last half century while public transport costs have risen. The declining number of people using buses, especially in rural areas, makes it uneconomic to operate services without subsidies. Falling bus and train occupancy levels also reduce their energy intensity advantage relative to cars, indeed, in some countries, trains consume more energy per passenger-km than cars (IPCC, 1996).
A third source of lock-in is linked to personal safety. With growing numbers of cars on the roads and declining numbers of pedestrians, the streets have become more dangerous. While travelling by car poses a higher risk of death or injury from accidents than travelling by bus or train, a car does offer protection from personal assault.
Because of the social and economic importance of transport, most governments provide budgetary subsides for construction and maintenance of transport infrastructure, and for transport services including many linked to car use (de Moor and Calamai, 1996; OECD, 1997b). Public finance for public and non-motorized transport has been generally less readily available than for road building since the 1950s. Other government instruments often support road transport, one example being planning laws that require off-street parking to be provided in new urban developments. It is the combination of policies and institutional relationships protecting road transport interests that poses the greatest barrier to change, rather than any single type of instrument (OECD, 1997b).
People have distorted perceptions of the relative convenience and cost of transport modes, usually justifying their habitual mode choices (Goodwin, 1985; OECD, 1997a). Bus users perceive trains as more expensive and less convenient than they really are, while train users have a similar misperception of buses. Car drivers believe that car use is cheaper and faster than it is.
GHG mitigation efforts in freight transport also face many barriers. The energy intensity of road freight can be reduced by improving fleet dispatching and routing, reducing the number of empty trips, and improving driving skills. While freight firms continue to make substantial efforts to minimize fuel use by trucks, speed, flexibility and responsiveness to customers is often a higher priority.
Moving freight by rail instead of by road can offer considerable energy savings in some countries (IPCC, 1996), mainly where long distances are involved and the freight can travel relatively slowly. However, nearly all freight movements must start and end by road, so that taking advantage of the low energy intensity of rail freight entails a loss of convenience as either containers must be loaded onto the train and unloaded for delivery, or trucks must be carried “piggy-back”. Increasing rail freight depends on substantial investments in road-rail terminals. Meanwhile, it may be difficult for railways to operate efficiently with high levels of both passenger and freight traffic owing to the different operating patterns entailed.
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