04-11-2021

The Sum Total of Zero: Funding Transport Decarbonisation

This summer, the UK’s Department for Transport published its detailed plan for decarbonising our transport system, with key facts and figures presented for how the UK can achieve Net Zero Carbon by 2050. With the UN’s Climate Change Conference, COP26, the road to Net Zero is firmly on the national and international agenda. The publication of the Department for Transport’s plan for decarbonising transport becomes even more important in light of this – and begs the question, are the UK’s targets achievable within the funding and plans outlined? And perhaps more importantly, do those targets go far enough? In the latest article from our series, Neil Taylor, Director of Transport Policy & Strategy at ITP, a company of Royal HaskoningDHV, explores the pounds and pence at the heart of the nation’s net zero carbon plans.

It has been quite the end to summer in the UK after the publication of the Department for Transport’s decarbonisation plan in July. As the country prepares to host one of the most consequential inter-governmental conference on climate change in recent memory – the UK has been struck by a supply chain crisis, triggering a fuel shortage as people flocked to fuel stations across the country and drained supplies in a matter of days. I found myself imagining the mirthful chuckles of electric vehicle owners across the land, whilst queuing for fuel during a (with hindsight) ill-timed visit to catch up with family.

While no crisis is a good crisis, the disruption has had the unexpected outcome of bringing some of the key issues and questions surrounding transport decarbonisation to the fore. For some it has underlined the need to accelerate a transition away from fossil fuels. In fact, the number of electric cars sold in the UK in September neared the figures for the whole of 2019 – as nearly 33,000 pure electric cars were registered in that month alone.

If this reflects consumer demand gaining momentum, then it appears to be matched by sustainability and net zero concerns rising to the top of agendas worldwide – not only those of governments, but also of major companies like Google. The tech giant is set to begin showing the most eco-friendly routes to Google Maps users, as well as introducing ‘Lite Navigation’ a feature in their maps app that will be dedicated to make navigation easier for cyclists (who, like me, sometimes find themselves relying on Google’s turn-by-turn directions when pedalling on unfamiliar routes).

Over to you Department for Transport…

In the UK, the Department for Transport’s decarbonisation plan will be judged against fellow nations and other industries in respect of the scope of its ambitions, and just how dedicated it is to making plans a reality.

One of the strongest indicators of commitment and ambition in today’s world is finance – are you willing to put your money where your mouth is? Looking at decarbonisation plan, there is a nagging sense that sufficient budget, focus, and delivery priority is not being channelled in a way that will facilitate swift progress on decarbonisation across transport sectors.

While the plan’s £2bn capital funding commitment to improve cycling infrastructure, and £3bn to be allocated to help decarbonise and accelerate local public transport are eye-catching figures, and significant uplifts from times of recent austerity, they are overshadowed by:

The £3.77bn annual operating cost for bus services in Great Britain (excluding London).
- £3bn of support for, and investment in, local bus and light rail services feels like a drop in the ocean compared to what is needed to electrify all bus fleets and significantly expand networks in urban and suburban areas such that people choose to use buses and trams over private cars.
The £1.25m - £2.5m per-Km cost of delivering cycle superhighways in urban areas.
- At that cost level, £2bn will deliver ~800km - 1,500km of new dedicated cycle routes (at most, given current construction inflation costs).
- For context, Nottingham City Council alone (a single unitary authority that covers a relatively compact urban area) maintains 774km of highways and footways that have an asset value of more than £1bn.
The £27bn allocated to enable Highways England to deliver the second Road Investment Strategy – a programme of road building that is likely to induce demand for higher levels of car use (and which may yet be subject to renewed legal challenge in the context of its detrimental near-term impact on carbon emissions and air pollution).
The ~£74bn of annualised wider costs to society that are linked to the current transport system (presented on page 32 of the Plan), and which could be considered a benefit of mode shift and decarbonisation.
The £98bn cost of HS2 (Stage one and two) which is forecast to add to, rather than reduce, GB rail emissions:

References to major infrastructure plans that were designed before the COVID-19 pandemic seem to overlook that climate science has been fairly unequivocal for some time, so shouldn’t necessarily come as a surprise in 2021. It begs the fundamental question as to whether the forthcoming Integrated Rail Plan, and Road Investment Strategy 2 can be considered ‘Net Zero Carbon compliant’ – either now… tomorrow… or in ten years’ time?

In short, it is likely to take considerably more than £2bn of investment to ensure that half of all journeys in towns and cities are cycled or walked by 2030. There is also no mention anywhere of the current baseline for this metric, which makes it hard to determine the degree of ambition associated with the target.

Even so, expecting this level of behaviour change to happen a decade ahead of world class cycling and walking networks - coming to a town near you by 2040 - seems hopeful at best.

Time for leadership and evidence-led choices…

If the figures outlined above don’t paint a stark enough picture of what is likely to be required financially – and therefore in commitment – from the government; there are plenty more questions that will be arriving at the door of the Department for Transport in the coming months and years. Their plan, for example, remains silent on some key aspects, including:

The impact of the proposed cut to air passenger duty for domestic flights.
The relatively slow pace of adoption of Ultra Low Emission Zones in all major UK cities.
Fuel duty having been frozen for the last decade and therefore not playing an active role as a financial instrument that could drive behaviour change.
Public transport fares, and the potential for greater public coordination of bus services outside of London, and National Rail services nationwide, to reduce fares (rail fares are 37% higher now than in 2011 and bus fares rose by an average of 60% in that time), improve affordability, and enhance the attractiveness of services relative to private car options.
Any form of scrappage scheme (and ideally one graduated by emissions) that would incentivise fossil-fuelled vehicles being taken off the road altogether.

Paying for transport system decarbonisation need not be solely an ‘affordability’ question, in the conventional sense, but instead reflects a series of important financial investment decisions that link economic growth opportunities with (in some cases existential) opportunity costs.

Will the Department for Transport and UK government act decisively enough to make these calls? Time will tell, but after 200 pages of detail questions remain – and they will need answers, because it currently feels a little bit like the climate change rollercoaster is edging over the first precipice with the brakes shut off.