Plenary 2: Towards a Green Economy

ITF Transport Outlook

Transforming Transportation

Washington DC

26 January 2012

ITF Transport Outlook

Meeting the needs of 9 billion people

Transforming Transportation

Plenary 2: Towards a Green Economy

Washington DC

26 January 2012

Global passenger transport activity 2000 – 2050 Index of pkm (2000 = 100)

2

High: European saturation levels in BRICs

Low: Japanese saturation levels in BRICs

Source: International Transport Forum calculations using IEA MoMo version 2011.

Global passenger transport activity 2000-2050

• Meeting the needs of 9 billion people

• Outlook fraught with uncertainty over such a long period

• Global passenger-km increase 3-4 times by 2050

• Outside OECD pkm could increse 5 or 6 fold

• Range is not measure of uncertainty but illustrates potential impact of modest changes in assumptions

• Low scenario – IEA base case in WEO 2008, Emerging economies reach Japanese levels of car ownership and use levels

• High scenario: European saturation levels

• Share of car trips seems set to rise from <10% in China to >50%

3

Aviation

• Medium term in line with IEA and IATA

• Longer term:

• Low scenario lower than IATA especially in OECD countries

• High OECD continues to grow non-OECD accelerates with deregulation and open skies

• High is still much lower than aircraft makers forecasts

4

Global freight transport activity, 2000 - 2050 Index of tkm (2000 = 100)

5

Low: Dematerialisation of growth

High: Constant freight intensity

Source: International Transport Forum calculations using IEA MoMo version 2011.

Freight Transport Activity 2000-2050

• Global freight tonne-km to rise 2.5 – 3.5 times by 2050

• Low scenario: Dematerialisation of growth, eg shift to services

• High scenario: GDP growth continues at 2005 freight intensity levels

• Developing countries may be embarking on a relatively freight intensive growth path, so full upside risk not reflected in graph

6

High Scenarios

• Best interpreted as where demand would like to go

• Realistic? Policy intervention?

• Eg fast urbanisation might slow growth of car ownership and use

• High energy prices would suppress

• But high scenarios far from impossible

7

Impact of Economic Crisis

USA External trade by sea and air, percentage change from pre-crisis peak Jun-08 (Tonnes, monthly trend, seasonally adjusted)

8

-20%2% 3%

1%

Sep

-10

USA external trade by Air, total (tonnes)

Sep-11

Jul-

08

-16% -3% -4%

Sep

-10

USA external trade by Sea, total (tonnes)

Jul-

08

Sep

-11

Sep

-11

Jun

-11

Jun

-11

Source: ITF Trade and Transport Database

Impact of Economic Crisis

• Total trade by sea and air in US

• 2 years to recover, but now flatlining or falling again

• End of stimulus, cooling of Chinese growth, in Europe bite of austerity

• Outlook incorporated 5 year shift

• Next will look at longer stagnation

9

EU External trade by sea and air, percentage change from pre-crisis peak

(Tonnes, monthly trend, seasonally adjusted)

10

-17%

-4%

-4%

Sep

-10

EU 27 external trade by sea, total (tonnes)

Jul-

08

Sep-1

1

Jun-1

1

-20%

14%

8%4%

Sep

-10

EU 27 external trade by air, total (tonnes)

Jul-

08 Sep-1

1

Jun-1

1

Source: ITF Trade and Transport Database

Shift in centre of gravity from OECD to non-OECD countries (halfway case between high and low scenarios)

11

Non-OECD46%

OECD54%

Passenger mobility (pkm) 2000

Non-OECD78%

OECD22%

Passenger mobility (pkm) 2050

Non-OECD48%OECD

52%

Surface freight (tkm) 2000

Non-OECD69%

OECD31%

Surface freight (tkm) 2050

Source: International Transport Forum calculations using IEA MoMo version 2011.

Global CO2 emissions from transport index (2000 = 100)

12

Source: International Transport Forum calculations using IEA MoMo version 2011.

High: European car saturation levels in BRICs air liberalisation

Low: Japanese saturation levels in BRICs and dematerialisation

Global CO2 emissions from transport

• CO2 emissions rise less quickly than mobility through fuel economy improvement

• Increase 2.5 to 3 times

13

2005 2010 2015 2020 20253

4

5

6

7

8

9

10

11

12US-3%[1]US-6%[2]Cali-forniaCanadaEUJapan

Lit

ers

per

100km

, n

orm

ali

zed

to N

ED

CHistorical performance

Enacted targets

Proposed targets

Unannounced proposal

Uncertain targets

[1] Based on 3% annual fleet GHG emissions reduction between 2017 and 2025 in the September 30th NOI .[2] Based on 6% annual fleet GHG emissions reduction between 2017 and 2025 in the September 30th NOI .[3] China's target reflects gasoline fleet scenario. If including other fuel types, the target will be lower.

Source:

Car Fuel Economy/CO2 Targets

March 2011

Global CO2 emissions from transport

• Maximisation of cost effective fuel economy improvement around the world, eg through continues progress with emissions standards would stabilise emissions

• GFEI target

• 8 l/100km ave new fleet economy in 2008 rise to 4 l/100km in 2030; whole fleet 2005

• Impressive but not enough to for IPCC 450ppm CO2 limit

15

Average LDV on-road fuel-intensity,baseline and stabilization of emissions(litres gasoline equivalent per 100km)

16

Source: International Transport Forum calculations using IEA MoMo version 2011.

80

90

100

110

120

130

140

150

160

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Germany

Australia

United States

France

Japan

United Kingdom

Oil price shockand start of

crisis

Peak Travel?Passenger-kilometres by private car and light trucks, 1970 – 2009 index (1990 = 100)

17

Source: ITF 2011 Transport Outlook from Household Survey Data

Peak travel?

• Evidence of reduced responsiveness of car and light truck travel to increasing incomes in advanced economies

• As the effect of income on travel (vkm) diminishes, it leaves a larger role to other determinants such as fuel prices, urbanisation, ageing and network management

• But economic cycle visible in US in particular

• And income distribution may have a large role. Income growth in last decade concentrated on wealthiest 10%. Incomes decreased in many of the lower deciles.

18

Peak travel?

• High income households are less responsive due to saturation, low income households very responsive

• Whether or not growing income translates into more driving (VMT) thus also depends on the distribution of income growth

• Uncertainty over future income likely to play a role in medium term

• Demographics becoming increasingly important

• These factors have strong implications for the projection of long run transport demand

19

Passenger Modal Split, 2005 and 2050 halfway case between high and low scenario, p-km (%)

20

OECD Non-OECD

Source: International Transport Forum calculations using IEA MoMo version 2011.

Car+LT Air Rail Buses Other0%

10%

20%

30%

40%

50%

60%

70%

80%

20052050

Car+LT Air Rail Buses Other0%

10%

20%

30%

40%

50%

60%

70%

80%

20052050

Freight modal split by region, 2005 and 2050halfway case between high and low scenarios, t-km (%)

21

OECD Non-OECD

Source: International Transport Forum calculations using MoMo version 2011.

Trucks Rail0%

10%

20%

30%

40%

50%

60%

70%

80%

20052050

Trucks Rail0%

10%

20%

30%

40%

50%

60%

70%

80%

2005

2050

Thank youMichael KlothT +33 (0)1 45 24 95 96E michael.kloth@oecd.org

Postal address 2 rue Andre Pascal75775 Paris Cedex 16

Total annual vehicle miles by household income, USA, 1995, 2001, 2009

23