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TRANSPORTATION - ENERGY AND ENVIRONMENT

Transportation and Climate Change

The Transportation Climate Change Table

In December 1997, Canada and other developed countries negotiated the Kyoto Protocol to the United Nations Framework Convention on Climate Change. If ratified, the Protocol will commit Canada to reducing its greenhouse gas emissions to six per cent below 1990 levels during the five-year period of 2008 to 2012.

In May 1998, federal, provincial and territorial ministers of transportation established the Transportation Climate Change Table as part of a national process to develop a climate change strategy. Its mandate was to analyse options to achieve progressively greater reductions of greenhouse gas emissions within transportation until reaching or, if possible, surpassing a six per cent reduction from 1990 levels.

In November 1999, the Table completed its Options Paper. Although this paper did not propose a single set of measures for achieving the six per cent reduction, it did present various measures that are sufficient to reach or surpass the Kyoto target. In 1999, the Table consulted with key stakeholders on the process and completed further consultations on the Options Paper in February 2000.

The Table's membership reflects a broad range of interests in transportation. Table 5-1 describes the membership of the Transportation Climate Change Table.

Transportation and Climate Change

Transportation is the single largest source of greenhouse gasses in Canada, accounting for 25 per cent of the total in 1997. If current trends continue, greenhouse gas emissions from transportation are expected to exceed 1990 levels by 32 per cent by 2010 and 53 per cent by 2020. To achieve the targetted six per cent reduction from 1990 levels, emissions from transportation would have to be reduced by about 54 megatonnes, or 28 per cent, from the forecasted level of 193 megatonnes in 2010. Figure 5-1 shows the implications of the Kyoto Protocol on forecasted greenhouse gas emissions from the transportation sector, from 1990 to 2020.

Road transport accounts for roughly 70 per cent of greenhouse gas emissions from the transportation sector, with 44 per cent of this total coming from cars and light-duty trucks and 27 per cent from commercial vehicles (primarily heavy-duty trucks). The next largest single source is off-road use, which includes industrial equipment (agriculture, forestry, mining and construction), recreational vehicles, boats, and lawn and garden equipment.

The three sources of emissions expected to grow most rapidly between 1990 and 2020 are aviation by Canadian carriers (forecasted to increase by 99 per cent), off-road uses (diesel by 66 per cent and gasoline by 57 per cent) and on-road diesel (74 per cent). The largest source of transportation emissions, on-road gasoline, is expected to increase by 44 per cent between 1990 and 2020.

Figure 5-2 breaks down the sources of greenhouse gas emissions from the transportation sector for 1997.

The mitigation targets established in the Kyoto Protocol do not cover emissions from international air and marine activities. Under the protocol, Parties agreed that the International Civil Aviation Organization (ICAO) will address greenhouse gas emissions from international aviation and that the International Marine Organization (IMO) will address international shipping emissions. Transport Canada is a member of both and is participating on an ICAO working group that is identifying the most efficient market-based options to reduce international emissions within civil aviation.

The Transportation Climate Change Table's Analysis

The work of the Table represents a comprehensive but early look at the potential for reducing greenhouse gas emissions from transportation in Canada. This is the first time that an analysis has been undertaken that looks at the costs and benefits of options across the entire transportation system. The Options Paper is not intended, however, to provide a prescription for implementing different measures; this will require more detailed analysis, design and consultation, including analysis by individual jurisdictions.

The Table commissioned 24 research studies and analysed more than 100 different measures designed to reduce emissions from transportation. While the cost per tonne of reducing greenhouse gas emissions is very important, other key social and economic criteria must also be considered in determining the best measures for reducing emissions.Note 1

Table 5-2 lists the criteria used to assess measures for reducing greenhouse gas emissions from transportation.

The criteria were used as a general guideline to group the measures into one of four categories:

• Most Promising Measures - those that have positive benefits or cost less than $10 per tonne are easier to implement or do not involve significant resource transfers. They may need additional analysis and design.
• Promising Measures - those having low to modest cost or those that complement other measures in the package. They may need additional analysis or development.
• Less Promising Measures - higher cost measures that may have greenhouse gas reduction potential in the medium- to longer-term and/or require significant additional analysis, much greater public acceptance, or considerable technological development.
• Unlikely Measures - those that Table members believe do not warrant active consideration at this time because they are made redundant by those in the first three categories or because they are high-cost, have limited potential to reduce emissions, or are extremely difficult to implement.

The Options for Transportation

The transportation measures have been grouped into five packages: passenger, road infrastructure, road vehicles and fuels, freight, and off-road. These packages provide a useful framework for grouping measures that work well together, are aimed at a particular end use, or provide a focus for action in the transportation sector.

Passenger

Passenger travel accounts for the bulk of transportation greenhouse gas emissions. It also presents a challenge in changing the travel, commuting and living habits of Canadians. The most promising measures are largely voluntary and aimed at increasing public awareness and changing travel behaviour, primarily in urban areas. Telecommuting, car sharing, enhanced driver education and changing the tax treatment of employer-provided transit benefits would, together, form an effective strategy for employers to implement voluntary trip-reduction programs in their organizations. The promising measures combine strong incentives for alternatives, such as public transit and bicycling, while discouraging car use through charges on parking, starting with the three largest urban centres. Further reductions would require more aggressive pricing mechanisms for roads and parking, large costs for the purchase of more efficient planes and ferries, or measures to restrict travel.

Road Infrastructure

Changes in the way Canada builds, maintains and uses roads and highways could also play a role in reducing greenhouse gas emissions from transportation. The most promising measures focus on enforcing existing speed limits and on using intelligent transportation systems (ITS) and synchronized traffic signals to improve traffic flow. The promising measures add two additional intelligent transportation systems, more frequent resurfacing of the national highway system and high-occupancy vehicle lanes to help travellers avoid congested areas. There is concern, however, that intelligent transportation systems could, by improving traffic congestion, induce more traffic and thereby increase emissions. Further and more difficult reductions involve road-pricing systems, changing pavements from asphalt to concrete, and reducing speed limits to 90 kilometres per hour.

Road Vehicles and Fuels

Adopting vehicles and fuels that are less carbon-intensive is critical to reducing greenhouse gas emissions from transportation. However, measures to improve vehicle technologies and increase the use of alternative fuels are complex and can raise significant economic issues. As a result, the Table did not propose any most promising measures for this category. The largest reductions in the promising measures would come from setting a harmonized target with the US to achieve a 25 per cent reduction in greenhouse gas emissions from new cars and light trucks by 2010. Also, the Table did assess several measures that would expand the use of alternative fuels, particularly in niche markets. These included expanding
production of ethanol for blending in gasoline at ten per cent; expanding the infrastructure for propane and natural gas; mandating the use of alternative fuels in government fleets; and promoting the use of alternative fuels in buses and heavy-duty trucks. Further and more difficult measures include purchase incentives for fuel-efficient cars and "feebates." A feebate policy levies surtaxes on higher fuel consuming vehicles and provides a rebate for lower fuel consuming vehicles.

Freight

The most promising freight measures represent cost-effective voluntary efforts, such as codes of practice and improved training and operating practices for truck drivers. A range of promising measures for trucking includes load matching to reduce empty or partial trips; the use of new technologies such as improved lubricants; scrappage programs to remove older, inefficient trucks from the road; reducing speed limits to 90 kilometres per hour; and allowing longer trucks in three provinces where they are not currently permitted. Also, two measures encourage the use of more efficient rail cars and engines by increasing the capital cost allowance on rail. Further and more difficult options include the use of alternative fuels and fuel cells for railways, and additional, higher cost truck technology measures.

Off-Road

The Table was not able to identify any most promising measures for the off-road category, as very little is known about this extremely diverse mix of equipment, which includes forestry, mining, agricultural, construction, lawn and garden equipment, fishing boats, and recreational vehicles such as snowmobiles. The Table did identify as promising three possible measures that could achieve reductions from recreational vehicles and some construction, mining and agricultural equipment.

Fuel Taxes

A number of the measures studied by the Table include the use of market mechanisms such as prices and fees, including parking charges, road pricing and fuel taxes. Prices play a role in determining the overall demand for transportation, the development and take-up of new more efficient technologies, and the choice of transportation services. Charges and fees could be used to better reflect the full cost of different transportation services, thereby ensuring their most efficient use. The Table analysed several models of fuel taxes, but did not reach a consensus on using fuel taxes as a measure to reduce greenhouse gas emissions. The use of moderate fuel taxes as a means of funding improvements in transportation, particularly in urban areas as a source of funding for transit, generated the most, but not unanimous, support. Under the assumption of medium fuel price elasticity, an urban gasoline tax increase of four cents a litre is estimated to generate $600 million in tax revenues and 1.4 megatonnes of greenhouse gas savings in 2010 and 2.6 megatonnes by 2020.

Options Report Conclusions and Recommendations

The Options Report is intended to identify the costs and benefits of different options, highlight areas of potential, and identify issues and concerns to be addressed. As such, it represents an initial but important step.

There is no single approach that will meet the Kyoto target. Technology has great potential, but technology alone will not allow Canada to meet the Kyoto time frames. A balanced greenhouse gas strategy for transportation will have to address the various parts of Canada's transportation system, including vehicles, fuels, infrastructure and carriers, and will also have to consider consumer behaviour.

The Table has identified a range of most promising measures that are cost-effective or easier, or that would likely meet with public support. These could generate 10.8 megatonnes of reductions in 2010, at a net benefit of $32 per tonne. This represents about 20 per cent of the Kyoto target in transportation. The cost to governments would be $3.5 billion over 20 years. Table 5-3 lists the most promising measures and the projected greenhouse gas reductions in 2010 and 2020.

A second category, promising measures, has the potential to reduce emissions by a further 32 megatonnes in 2010, at a net cost of $5 per tonne. These measures move beyond the strictly voluntary, relying on financial incentives, infrastructure improvements and targets to encourage new technologies, improve energy and transportation efficiency, and change practices and behaviour. They may, however, require significant government or private-sector investment. They may also involve additional analysis, design, consultation or international discussions before implementation. Table 5-4 lists further promising measures and the projected greenhouse gas reductions in 2010 and 2020.

Together most promising and promising measures would lead to an estimated reduction of 42.6 megatonnes of GHG emissions in 2010, 11-14 megatonnes short of the Kyoto target.

To reduce emissions in transportation further, the Table has identified less promising measures that are more difficult and expensive, and that generally involve restricting activity or introducing pricing mechanisms, such as road and parking pricing.

The Table identified areas for further work, including:

1. Data Issues - Data on transportation is limited in a number of areas.
2. Analytical Issues - Additional analytical work is under way on the regional impacts of the proposed transportation measures and on intercity rail and bus transportation. Further analytical work was also recommended to quantify competitiveness impacts and to examine design issues for specific measures.

As the national process continues, the Table's analysis will be integrated with those of 15 other issue tables, and the most effective options for the Canadian economy will be assessed. Energy and environment ministers will consider a national climate change strategy in 2000. This will be followed by public consultations on the national climate change strategy and a report to First Ministers in 2001.

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