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Policy Pulse

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Auto mobility benefits in EU and post COVID recovery

Policy Pulse - George Anjaparidze - 18 June 2020

Mobility benefits the economy and users

Mobility contributes to GDP and supports jobs while offering greater freedom of choice to businesses and users, boosting productivity, enabling trade and improving well-being. Globally, in 2019, benefits associated with mobility included:

  • A travel and tourism industry that contributed €7.9 trillion to global GDP (or 10.3%) and supported 330 million jobs (1 in 10 jobs in the global economy)[i]

  • Trade in goods was equal to more than 21% of global GDP or €16.9 trillion[ii], all of which required transportation across borders

  • Businesses and users of mobility benefited through increased choice which improved their productivity and well-being

  • Automobile mobility played an especially important role in creating these benefits

In the European Union automobiles create the largest mobility benefits

About 3 out of 4 overnight trips made by EU residents within and outside the EU were done using an automobile.[iii] All other modes combined (aviation, rail and water) represent the remaining 25% of trips. In 2019, automobile mobility is estimated to have created the following economic and social benefits within the EU:

  • Contributed about 6% in GDP (€827 billion) and supported 7% of employment (14.2 million jobs) through activities in the travel and tourism sector

  • Improved welfare by increasing the freedom of choice, which boosted productivity in the economy and enriched well-being of users

  • Enabled external trade (20% in value) and internal trade within the EU (70% in value), thereby helping connect external markets to the EU and supporting closer economic integration within the EU

Prioritizing sustainability in the post-COVID recovery

Climate targets under the Paris Agreement imply a need to deliver rapid decarbonization in light and heavy road vehicles. International Energy Agency (IEA) scenario modeling for achieving an emission trajectory consistent with going beyond 2°C points to the need to make significant emission reductions from road transport. Specifically, the IEA estimates that light and heavy road vehicles need to reduce their aggregate CO2 emissions by 72% by 2050 compared to their 2015 level.[iv]

Overall, across all transport modes, the sector is expected to achieve CO2 emission reductions through a combination of technology-focused measures, such as energy efficiency and fuel switching, and structural changes that avoid or shift transport activity. The contribution of various measures for CO2 emission reductions in 2050 can be decomposed as: efficiency improvements (29%), biofuels (36%), electrification (15%), and avoidance combined with modal shift (20%).[v]


In road transport, in the short to medium term, hybrid electric vehicles and plug-in hybrid vehicles can be instrumental in enabling the transition to electric vehicles. Also, designing interventions that incentivize more sustainable behaviors of drivers and users can also contribute to accelerating sustainable practices.


[i] World Travel and Tourism Council, Travel & Tourism: Economic Impact 2020. [ii] World Trade Organization, World Trade forecast, April 2020. [iii] Eurostat, Estimated number of trips by mode of transport by EU residents, 2017. [iv] International Energy Agency, Energy Technology Perspectives 2017. [v] Ibid and Intergovernmental Panel on Climate Change, Special Report on Global Warming of 1.5°C, Chapter 2, 2018.


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The extraordinary climate agreement on international aviation

Policy Pulse - 14 November 2019 - George Anjaparidze


The Harvard Project on Climate Agreements published a Veritas Global policy brief providing rare insight into the inner workings of the airline industry. The brief, The Extraordinary Agreement on International Aviation, explains the key role played by the airline industry in the design of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).


The scheme addresses the growth in total CO2 emissions from international aviation above 2020 levels. CORSIA will save the aviation industry tens of billions of US dollars each year by avoiding a costly patchwork of overlapping and distortive measures. The worst-case patchwork scenario estimated that climate-policy costs would be equivalent of about 10% of industry revenues in 2030. In comparison, carbon neutral growth from 2020 would cost the industry less than 1% of industry revenues in 2030.


For CORSIA to function effectively, there is an urgent need to secure a credible source of carbon offsets. ICAO is currently working towards an agreement on emission unit criteria. Offsets used by aviation need to be consistent with the broader climate-policy framework under the UNFCCC Paris Agreement and ensure no unintended double-counting of emission reduction efforts. In the medium term, it may be necessary to introduce adjustments to CORSIA.


Although challenges remain, CORSIA represents an extraordinary achievement. A key focus of industry and policy makers needs to be on ensuring that CORSIA is fully implemented with the broadest possible participation. This will enable international aviation to address its CO2 emissions while continuing to deliver a critical service for the modern economy.



 
 
 
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