Why we need road pricing

Edward Leigh

Artwork: Dr Cécile Girardin

We haven’t begun to engage seriously with decarbonising road transport. The first problem is with the 2050 net-zero target, which is a highly misleading proxy for what actually matters: the accumulation of carbon dioxide and methane in the atmosphere, which is driving climate change. The IPCC’s notional global carbon budget from 2020 was 495 gigatonnes of CO2e to have a 50% change of containing global temperatures within 1.5°C of pre-industrial levels. The world is currently on track to exhaust road transport’s share of that carbon budget before 2030.

The second problem is that industry lobby groups have misled politicians and the public into thinking we can decarbonise road transport simply by replacing petrol/gasoline and diesel vehicles with electric or hydrogen-powered versions — at a pace that is comfortable for auto manufacturers.

As we electrify transport and space-heating, demand for electricity will grow from the current 16% of total energy demand to nearer 100%, possibly faster than we can build zero-carbon generators. Electricity is simply an energy vector (as is hydrogen), so it’s entirely arbitrary to look at its carbon intensity in isolation. Globally, 86% of energy consumed comes from fossil fuels, and a further 7% from burning wood. Only about 1.5% of energy is derived from readily scaleable zero-carbon sources, such as wind and solar.

Until all energy supply is net-zero (including any offsetting from Bio-energy, Carbon Capture and Storage and other forms of Carbon Capture, Storage and Usage), any increase in total demand — from economic growth or reduced efficiency — can only be met by increasing output from, or prolonging the life of, fossil fuel generators. That will certainly be the case for the next ten years, and most likely for the next thirty (see the IEA’s Net Zero by 2050). From here on, I will assume the energy sector does reach net-zero in 2050 (see Figure 1).

Figure 1: Underlying assumption that decarbonisation of the energy sector completed in 2050

The priority for this decade at least is to reduce energy consumption and increase energy efficiency. For road transport, that translates into two objectives: to reduce total vehicle-mileage, and increase the efficiency of vehicle usage.

Battery-electric vehicles (BEVs) are about twice as energy-efficient as internal combustion engine vehicles (ICEVs) even when the electricity used derives from fossil fuel power stations. So, they are undoubtedly part of the solution. But, if we scrap ICEVs early to replace with BEVs, can we decarbonise transport within the 1.5°C budget?

To understand the carbon impacts of different scenarios, I have built a model to test permutations of inputs, including:

  • Rates of growth of zero-carbon primary energy supply
  • Rates of retirement of vehicles
  • BEV-for-ICEV scrappage Rates
  • Changes in total vehicle-mileage
  • Changes in average per-vehicle mileage

The model has initial and trend data for global and UK energy and road transport. From this it is possible to explore scenarios with the objective of finding ones that contain cumulative carbon emissions within a pro-rata allocation of the global carbon budget.

In any scenario, the most striking output from the model is that by far the largest proportion of emissions are from the operation of ICEVs — those on the road now and still being manufactured.

In a business-as-usual scenario for transport, where total vehicle-mileage continues to increase at 3% a year, the carbon budget is exhausted in ten years (see Figure 2). There is no feasible way to avoid that with a BEV-for-ICEV scrappage scheme alone: the annual demand for lithium would suddenly grow thirtyfold; and BEV manufacturing output would have to grow one hundredfold.

Figure 2: Emissions profile for business-as-usual for transport globally

So, we must explore scenarios where vehicle-mileage and vehicle ownership reduce, rather than increase, over the coming years. How big those need to be depends on the BEV-for-ICEV scrappage rate that governments are willing and able to fund, and the auto industry able to satisfy.

For instance, a scenario within the global carbon budget (see Figure 3) in which the scrappage rate is 2.5% (on top of the current 3.7% retirement rate) would require a 25% reduction in total vehicle-mileage and a 45% increase in per-vehicle mileage for private vehicles; and a 10% reduction in total vehicle-mileage and a 34% increase in per-vehicle mileage for commercial vehicles (see Figure 4).

Figure 3: Emissions profile for the scenario described above
Figure 4: Reduction in total vehicle-mileage in the scenario described above compared with business-as-usual (grey)

The outcome would be a halving of the fleet of vehicles in use by 2050 (see Figure 5). That compares with it more than doubling on a business-as-usual growth path. This has huge implications for the auto industry. Production of ICEVs would need to cease well before 2030, and total vehicle production to decline by around two-thirds (see Figure 6).

Figure 5: Reduction in total number of vehicles in the scenario described above compared with business-as-usual (grey)
Figure 6: Reduction in vehicle production in the scenario described above compared with business-as-usual (grey)

Governments and the auto industry must get real about decarbonising road transport. There is no solution that does not require large-scale modal shift to active, public and shared transport for moving people; and greater consolidation of freight movements onto rail and fewer road vehicles. My presentation, available via the Climate Exp0 media library, goes on to explain how road pricing can create the options and incentives to enable this.

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