
Atmospheric concentrations of CO₂e are rising due to increasing anthropogenic emissions. Unchecked, rising concentrations of CO₂e in the atmosphere will lead to catastrophic climate change.

Public electricity and heating in Annex I countries accounted for over 6.68 billion tons of CO₂e emissions annually in 2007.

Transport is responsible for approximately 20% of global anthropogenic emissions, or more than 4.63 billion tons of CO₂e annually. Source: UNFCCC, 2009.

Buildings are responsible for an estimated 1.45 billion tons of CO₂e in Annex I nations and over 20% of global anthropogenic emissions annually. Source: UNFCCC, 2009.

Annex I industry emissions are over 1.3 billion tons of CO₂e annually. Global industry emissions account for approximately 24% of annual anthropogenic emissions. Source: UNFCCC, 2009.

Emisisons from agriculture in Annex I countries totaled more than 1.43 billion in 2007 CO₂e emissions.

The EIA estimates that 2006 energy-related emissions from non-OECD countries accounted for approximately 30%, of global anthropogenic CO₂e emissions, or 15.4 billion tons. Source: EIA, 2009.

Biochar could potentially remove over 1 billion tons of CO₂e annually. In general, carbon management solutions could remove billions of tons of CO₂e from the atmosphere annually.
Increasing mobility of goods and people is driving transport demand and associated CO2e emissions. Emissions from the transport sector are growing faster than industry and building emissions and contributing significantly to rising CO2e levels that lead to dangerous climate change.
Increasing mobility of goods and people is driving transport demand and associated CO2e emissions. Emissions from the transport sector are growing faster than industry and building emissions and contributing significantly to rising CO2e levels that lead to dangerous climate change. By 2020, annual CO2e emissions are projected to rise by close to 2 billion tons above the more than 6 billion tons –roughly 20% of energy-related emissions – in 2009. A number of opportunities have been identified to achieve a low-carbon and sustainable transport future.
Reform in the transport sector has proven difficult due in large part to the capital-intensive nature of the industry, sunk investment in existing infrastructure, and a lack of market or regulatory incentives for more fuel efficient transport. In addition to these barriers, a history of globally subsidized carbon-based fuels has deterred investment in alternatives. High prices and projected price increases for fossil fuels has been changing that, and alternative fuels for all segments of the transport sector are under development. Under current projections, however, the dominant dependence still is on petroleum, which supplies 95% of transport energy.
Significant CO2e reductions are attainable in the near-term through efficiency gains, existing vehicle technologies, and alternative fuels. New business models that reduce upfront costs of these technologies through financing or leasing to accelerate adoption and supporting policy are needed for alternative fuels.
Significant CO2e reductions are attainable in the near-term through efficiency gains, existing vehicle technologies, and alternative fuels. New business models that reduce upfront costs of these technologies through financing or leasing to accelerate adoption and supporting policy are needed for alternative fuels. Potential CO2e mitigation in the transport sector is estimated at between 1.6 and 2.6 billion tons a year by the IPCC, a conservative number based on current markets and existing proven technologies (primarily biofuel adoption and increased efficiency in light-duty vehicles).
Additional savings in a shorter time-frame can almost certainly be achieved through more aggressive investment in an array of transport technologies. In the light-duty vehicle sector alone, the IPCC estimates that with strong policy reductions of 50% in CO2e emissions could come through fuel economy. Regulatory reform will be required to address public transport options and infrastructure upgrades and possibly fuel economy standards that will drive further low-carbon innovation. Investment in R&D is also important for next generation technologies that will end petroleum dependence.
Leverage points in transport can be divided into three categories:
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Growth in global air travel is rapidly increasing emissions of CO2e from the aviation sector. The IPCC estimates that aviation is responsible for an estimated 500 million tons, or 1%, of annual anthropogenic CO2e emissions. At its current growth rate, the IPCC estimates that the industry will be responsible for over 5% of global emissions by 2020.
Growth in global air travel is rapidly increasing emissions of CO2e from the aviation sector. The IPCC estimates that aviation is responsible for an estimated 500 million tons, or 1%, of annual anthropogenic CO2e emissions. At its current growth rate, the IPCC estimates that the industry will be responsible for over 5% of global emissions by 2020. Unchecked, the growth in emissions of CO2e will contribute to higher atmospheric concentrations of CO2e that cause irreversible and catastrophic climate change. The sustainability of the aviation industry has come increasingly under scrutiny, leading the U.K. Sustainable Development Commission to issue a 2008 recommendation to halt airport development until addressed.
Industry efforts to increase airline efficiency and lower fuel costs, which account for 20% to 30% of industry cost, are helping to offset emissions growth. There is continual design innovation to reduce fuel use and lower costs. Planes today are on average 20% more efficient than the previous generation of planes. The new generation of planes under construction, such as the Boeing Dreamliner, employs lightweight materials and innovative design and could reduce fuel costs by an additional 20%. Overall efficiency gains of 25% are projected by 2020.
Current measures, however, are not enough to offset increases in total emissions due to expansion of air travel. Alternatives to carbon-based fuels for the industry is a focal point.
There is a significant opportunity for transformation of the aviation industry to low-carbon given the alignment of business interests and climate interests, with a shared focus on fuel economy and alternative fuels. Commitments to rapid development and deployment targets for these measures are an important first step.
There is a significant opportunity for transformation of the aviation industry to low-carbon given the alignment of business interests and climate interests, with a shared focus on fuel economy and alternative fuels. Commitments to rapid development and deployment targets for these measures are an important first step. Preventing emissions growth in the aviation sector could avoid more than 1.5 billion tons of anthropogenic CO2e emissions annually in 2020. More aggressive efficiency gains and alternative fuels adoption hold even greater emissions reductions potential by 2020.
Free-Enterprise Approaches
Interest in alternative fuel use in airplanes is motivated in part by a desire to hedge against fuel price volatility. Although biofuel alternatives to burning kerosene are not yet fully commercial, fuels produced from algae and jatropha are under development and showing promise in early performance tests. Widespread adoption of these fuels could have significant emissions implications. The Sustainable Aviation Fuel Users Group formed in September 2008 and including 16 major airlines has pledged to only use biofuels that perform as well as kerosene-substitutes but have a lower carbon impact. Specific adoption targets have not been set but are needed.
Possible efficiency measures beyond design include increasing plane occupancy and flying at slower speeds, both of which improve the bottom line. Changes at the carrier level being implemented today include changing flying behavior (routes, idling, and velocity) to maximize per-mile flight efficiency.
Freight transport has been growing more rapidly than passenger transport and accounts for over 35% of transport energy. The IPCC projected freight transport energy use increasing annually at an average of 2% prior to the 2008 global recession. Under this scenario, emissions would nearly double by 2030.
Freight transport has been growing more rapidly than passenger transport and accounts for over 35% of transport energy. The IPCC projected freight transport energy use increasing annually at an average of 2% prior to the 2008 global recession. Under this scenario, emissions would nearly double by 2030. Trucking is the predominant local and regional freight transport mode and responsible annually for an estimated 2 billion tons of CO2e emissions, or 4% of global anthropogenic emissions. Emissions are increasing as the share of freight handled by trucks increases due to demand for rapid transport and the subsequent shift from rail and regional waterways. Emissions growth is contributing to rising atmospheric concentration of CO2e that leads to catastrophic climate change.
The trucking industry is motivated to adopt efficiency technologies due to fuel costs and competitive pressure. This includes measures to reduce weight and drag through lighter materials and aerodynamic design, respectively. There has been a trend toward using lighter materials in road vehicles, although the efficiency gains are negated in many cases by increased size or performance. There are active research initiatives by the U.S. Department of Energy to reduce drag through aerodynamic design and obtain efficiency gains of 15% to 20% and to enhance engine efficiency, targeting a 10% to 20% efficiency gain.
The use of alternative fuels is an important option for reducing emissions but is less of a near-term imperative for truckers than improving fuel economy and reducing vehicle miles traveled, both of which reduce costs. Measures to decrease energy use and associated CO2e emissions include reduced weight through use of lightweight materials (e.g.
The use of alternative fuels is an important option for reducing emissions but is less of a near-term imperative for truckers than improving fuel economy and reducing vehicle miles traveled, both of which reduce costs. Measures to decrease energy use and associated CO2e emissions include reduced weight through use of lightweight materials (e.g. aluminum to replace steel in trucks), reduced drag through aerodynamic design, engine efficiency, and reduced rolling resistance from tyres. IPCC reports estimates for fuel savings from complete packages of aerodynamic improvements for heavy-duty trucks are 15% to 20%. Estimated engine efficiency gains by 2010 are 10% to 20%, with higher gains possible if more fundamental changes to diesel engines are implemented. These efficiency measures translate into significant emissions reductions.
A set of initiatives – including reduced speeds, improved highways to reduce congestion, fuel efficiency, and optimization of truck routes and cargos – proposed by the American Truckers Association (ATA) aims to achieve significant fuel savings and emissions reductions. The ATA target is to reduce emissions by 900 million tons by 2020. To fully remove carbon from the trucking fleet, a switch to carbon-free fuels would be required.
Even with voluntary efforts underway, standards and monitoring remain important for the industry, and the IPCC reports concern about a gap between tested emissions and on-road emissions – with diesel engines of particular concern
Free-Enterprise Approaches
The trucking industry is under competitive pressure and motivated to consider both fuel economy and reduction in vehicle miles traveled in order to lower costs. The timing is good for introduction to the market of efficiency technologies for trucks, as well as alternative fuels if they can be made available at an attractive price point. Business models that scale to provide efficiency retrofits and new design for trucks are needed. Ensuring the deployment of alternative fuels will likely require policy support, in large part to prevent fluctuations in oil prices from undermining the industry as it gets established.
Biofuels are compelling as one of the few low-carbon solutions in transportation that is ready for deployment and requires minimal infrastructure changes. Hitting stabilization targets to avoid catastrophic climate change will require reductions in transport-sector emissions, which are the fastest growing category of emissions.
Biofuels are compelling as one of the few low-carbon solutions in transportation that is ready for deployment and requires minimal infrastructure changes. Hitting stabilization targets to avoid catastrophic climate change will require reductions in transport-sector emissions, which are the fastest growing category of emissions. Unchecked, annual emissions will continue to increase above current levels of 6 billion tons, or approximately 12%, of global anthropogenic emissions CO2e. Biofuel production has been growing rapidly globally, with production of ethanol reaching 17.3 billion gallons in 2008, led by the U.S. and Brazil.
Collectively these fuels displaced approximately 30 billion gallons of gasoline (with 50% of savings from reduced fuel transport), or 2.2% of global liquid fuel consumption. To achieve reductions of 1 billion tons of CO2e in the transport sector by 2020 to support global stabilization targets for CO2e to avert catastrophic climate change, biofuel production would have to scale up more than ten fold. This scale up is possible.
Decreasing petroleum dependence through reliance on biofuels has as co-benefits energy security and reductions in air pollution, including avoided emissions of hydrocarbons from incomplete combustion of fossil-fuel that cause lung-harming ozone. Policy support for biofuel production in the U.S. has largely been based on the national security objective of energy independence to protect the U.S. economy and military from oil price shocks and supply cut-offs by foreign powers. A second and less prominent issue of national interest is increasing competition for scarce resources, as India and China ramp up demand for oil. At the very minimum this will drive up prices but could also lead to conflict and shortages. Military operations to protect energy interests abroad are another cost under business-as-usual that sees continued dependence on petroleum imports.
Biofuels have the potential to scale up to offset more than 1 billion tons of CO2e by 2020. Supporting policy is critical to establish the biofuels market. Only with assured markets can biofuels attract the level of investment needed to scale.
Biofuels have the potential to scale up to offset more than 1 billion tons of CO2e by 2020. Supporting policy is critical to establish the biofuels market. Only with assured markets can biofuels attract the level of investment needed to scale. Temporary low oil prices can quickly undermine biofuel production, which is just getting established and highly sensitive to fluctuations in demand. Minimum deployment levels allow producers to learn and innovate, bringing down prices – a model that has been validated in Brazil. The U.S. government has set deployment targets for ethanol, although one of the most promising areas of biofuels deployment, as a substitute for jet fuel, has yet to be granted support. As the global economy recovers and energy prices rebound, there will be a strong incentive for the business lobby to get behind alternative fuels.
Smart policy clearly needs to take into consideration concerns over land use and water use and to establish accounting rules for carbon savings that factor in land-related carbon emissions.
Technology development is still required in the biofuel space and is another important area for investment. It is attractive to private investors when deployment times are short and markets are established. For projects with longer deployment times and more fundamental research questions, government support will need to be obtained. Second-generation, or advanced, biofuels still in the deployment phase are needed to achieve scale sustainably.
Free-Enterprise Approaches
Fuel costs are a substantial component of cost across the transport industry, which makes fuel alternatives attractive – particularly in the face of proposed carbon taxation. Once alternative fuels are competitive on a cost basis (which may include a carbon price), they will be widely adopted, as has been demonstrated with the Brazilian experience. Alternative fuels at a premium may also be attractive due to the reduced risk and price volatility compared with petroleum. Consortiums of fuel buyers – such as the Alliance for Sustainable Air Transportation – that can commit to large quantities of biofuels are important to achieve economies of scale in production and establish a robust market. Also important in new markets is information around the benefits of supporting infrastructure which can drive necessary co-investment in infrastructure, e.g. airport fuel infrastructure, and where appropriate government support or standards for infrastructure including flex-fuel vehicles.
Despite gains in fuel economy, global emissions from local transport including light-duty vehicles (LDVs) and buses have continued to increase. Emissions from new vehicles are outstripping the emissions reductions from efficiency.
Despite gains in fuel economy, global emissions from local transport including light-duty vehicles (LDVs) and buses have continued to increase. Emissions from new vehicles are outstripping the emissions reductions from efficiency. The LDV segment (cars and light trucks) is the largest contributor of CO2e emissions in the transport sector, accounting for nearly half of transport emissions. Estimates of current annual emissions based on data from the IPCC are greater than 3 billion tons of CO2e annually, or approximately 6% of total anthropogenic emissions. These emissions are growing rapidly and projected to rise between 2009 and 2020 under business-as-usual. Under this scenario, transport emissions are a significant contributor to rising concentrations of atmospheric CO2e that lead to catastrophic climate change.
There are currently an estimated 800 million cars and light trucks on the road worldwide, with 250 million of them on the road in the U.S. If China, India, and other developing countries increase their use of passenger vehicles as predicted, that number is expected to grow to 1.6 billion by 2020. If one includes trucks, buses, and motorized scooters, thee number of vehicles on the road in 2020 is above 2 billion.
Change in the light-duty vehicle sector faces a number of hurdles. Established infrastructure and consumer preference for large, powerful vehicles are perpetuating the status quo. Fleet turn-over rates also impede fast change.
Reform in the local transport sector requires transport models – vehicles or popular public transit solutions - that can meet consumers’ standards for comfort while still meeting low-carbon standards.
Reform in the local transport sector requires transport models – vehicles or popular public transit solutions - that can meet consumers’ standards for comfort while still meeting low-carbon standards.
Fundamental change will require consumer acceptance of new types of cars, e.g. plug-in electric hybrids, and/or transit alternatives such as green buses. More stringent standards governing vehicle efficiency and investment in public transit can help catalyze change. However, the most important change will come from radical new business models that move away from today's "purchase" model to tomorrow's "transportation service" model. These new business models are needed to address financing, leasing, and sharing to make new vehicles, including electric vehicles, attractive.
Relatively conservative estimates by the IPCC of what is possible in this sector suggest reductions of between 1.6 and 2.6 billion tons of CO2e in the transport sector by 2030, mainly through enhanced efficiency in the light-duty vehicle sector and adoption of biofuels. The challenge is to achieve greater reductions in a 2020 timeframe. Promising areas include near-term vehicle technology – including electric drive vehicles (whose emissions depend on the electricity source, e.g. coal, natural gas or renewables), hybrids, fuel cells, and battery electric vehicles – and efficiency measures that include reducing vehicle weight through use of new materials such as carbon fiber, reduced drag through aerodynamic design, and engine efficiency. Additional R&D funding is need for fuel-cells and batteris, among other areas.
Free-Enterprise Approaches
Innovative companies that aim to transform this sector to a low-carbon sustainable future are commercializing fully electric vehicles, plug-in electric hybrid vehicles, fuel-cells, light-weight designs, and alternative fuels. Success at the level of the Toyota Prius won’t be enough to reduce emissions in this sector; fundamental change is required to achieve emissions reductions in the face of growing transport demand. More models that provide low-carbon performance – style, safety, and speed – are needed. The Tesla sports car made headlines in 2008 when released, as an attractive high-end sports car that could deliver both power and zero emissions. New competitors such as Riva, Coda, TH!NK, Nissan, GM, and many lesser known Chinese players are leading innovation at much lower price points.
A lack of consumer visibility and the extraterritorial nature of shipping explain in part why the industry’s has lacked regulation on Greenhouse Gas emissions to date.
A lack of consumer visibility and the extraterritorial nature of shipping explain in part why the industry’s has lacked regulation on Greenhouse Gas emissions to date. Ships account for over 1 billion tons of CO2e annually, or around 3% of global anthropogenic emissions, in addition to being a major emitter of other pollutants such as SOx, NOx, Particulate Matter and Soot (that contains black carbon).
Moreover, shipping has a number of agency problems blocking demand for fuel-efficient technologies that are increasingly widely available:
• “The landlord and tenant scenario”: The shipowner or ship operator rarely pay for marine, or “bunker” fuel. Rather bills are picked up by the customers (charterer) meaning few incentives to owner / operators to improve efficiency
• Shipyards: The majority of shipyards, located mainly in Asia, build to standard type and charge a prohibitive premium to owner / operators for new technologies and vessel designs
• Charter party agreement: In some cases as old as 150 years, charter party agreements are outdated and focus on cost, speeds, age and tonnage – not eco-efficiency and fuel burn over a vessel’s lifespan or charter-span
• Indexing and Rating: To encourage educated decisions, shippers, ports and other stakeholders such as insurers need access open and transparent environmental performance ratings
• Information flows: According to the International Maritime Organisation (IMO), the UN body that governs shipping, the industry has an opportunity to make money reducing the first 250 million tons of its CO2e; but how many companies in and connected to the industry know this?
The shipping industry is the largest emitter of NOx and is also one of the largest emitter of SOx. Under business-as-usual, harmful emissions from this sector will continue to rise as demand for freight increases. According to the IMO, CO2e emissions from ships will reach 18% of all manmade Greenhouse gas emissions by 2050 under “business as usual”.
Moreover, despite some regulation for the reduction of SOx and NOx, shipping pollution poses serious human and environmental health risks, providing additional motivation to reduce emissions. Particulate Matter emissions from ships contribute to an estimated 60,000 premature deaths annually, as reported in a 2007 study by Corbett, et al., published in Environmental Science & Technology. Reducing emissions is technically feasible using current technology, and, in the case of efficiency measures to reduce fuel consumption, can contribute cost savings that make it economically attractive with appropriate financing of upfront costs. The IMO GHG Study 2009 estimates that eco-efficiency technologies could reduce CO2e emissions from shipping by between 25% and 75%. Of those emission reductions, the first approximate 25% of reductions could be achieved, according to the study, “profitability”.
Currently available technologies can substantially reduce CO2e. Efficiency gains could translate into an annual CO2e reduction of upwards of 250 million tons annually consumption by 2020.
Currently available technologies can substantially reduce CO2e. Efficiency gains could translate into an annual CO2e reduction of upwards of 250 million tons annually consumption by 2020. Of the 100,000 vessels that spend most of their time traversing the world’s oceans, making only occasional stops at port cities, about 15,000 are responsible for the bulk of emissions and are initial targets for efficiency and scrubbers. The installation of scrubbers - common in aviation and automotives – could substantially reduce black carbon soot and reduce NOx and SOx.
Future technology developments – including fuel alternatives to the heavy sulphurous bunker fuel currently burned by ships to LNG or biofuels – could eventually contribute even greater emissions reductions and present a market-based solution driven by reduced fuel costs. Alternative fuels are currently in the development phase and present another business opportunity.
Free-Enterprise Approaches
There is significant potential for improved and increased information flow of what constitutes an efficient ship from a less efficient one; and an efficiently run ship from a less well-run ship. Carbon War Room is committed to increasing this information flow to enable the key stakeholders to make better decisions and to facilitate investment in technology and operational improvement that saves money and CO2.
New business models that deliver attractive financing for energy-efficiency for ships can catalyze the market for these technologies. With attractive financing, the efficiency upgrades may be of considerable appeal given the estimates of a short payback period (three years or less) for reduced fuel costs.
The adoption of scrubbers will require additional pressure from customers or regulation, as there is currently no economic incentive for their addition.