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Transport and climate: putting in place the right incentives

Published 19 April 2022 by Colin Howden

Our director, Colin Howden, discusses the necessity of cutting transport emissions in order to reach our climate targets, and how we might go about achieving this.

Transport is the toughest problem in hitting Scotland’s climate targets. In recent years, it has become the largest source of emissions, and despite an unceasing flow of consultations and policies, there has been precisely no progress in cutting emissions since 1990.

In order to hit our national climate commitments it is imperative we see deep cuts in transport emissions. But that’s about as far as there is consensus in political discussions of transport currently.

Follow a transport debate in the Parliament and you will find many who think that transport emissions can be magicked away by some cycle paths, a handful of bus lanes and a few tram lines. That is all a convenient fiction. The ScotRail trains that have been in state ownership since April 1 are exactly the same as they were under private sector ownership on 31 March, and whether owned by communists or capitalists, nobody’s going to get on the bus if it’s stuck behind long queues of single-occupant-filled private cars.

Investment in sustainable transport infrastructure is a necessary component of a sustainable transport policy — something which my organisation has campaigned for decades — but it is foolish to think that transport investment will be sufficient to deliver major cuts in emissions in the absence of the correct incentives also being in place.

It’s certainly true that the shift from fossil fuels to electricity for powering the car fleet has cut emissions (although this gain has been eroded by people driving more and buying larger vehicles), and electric cars will continue to play a massively important role. However, the electrification of fleets is not sufficient to deliver the necessary carbon reductions so a reduction of road mileage will be required in addition to the shift to electric vehicles. The Scottish Government has recognised this in the introduction of its target to reduce car mileage by 20% by 2030.

This traffic reduction target represents a very significant change of course from the Scottish Ministers. For the previous decade, we had been told that electric vehicles would bring about the climate cuts required. This had been a convenient position to take as it relied upon European Union legislation to drive cuts in the emissions from the domestic vehicle fleet, and enabled inaction elsewhere.

It’s economically rational for people to drive

There are many reasons why people choose to drive. However, I suspect the principal reason is because it is massively under-priced.

HM Treasury collects around £35bn per annum in Fuel Duty and Vehicle Excise Duty across the UK. That may sound like a lot but it is dwarfed by the £99bn in external costs that road transport inflicts, which represents almost 5% of UK GDP [1]. It’s a vast cost burden borne by society and the environment: congestion, road crashes, climate impacts, air and noise pollution, and damage to wildlife, soils and habitats. There’s simply no instance of the ‘hard-pressed motorist’ when in fact motorists pay for only a third of the damage that they inflict.

But it’s difficult to castigate people for driving when the price signals that they face on a day-to-day basis provide a direct incentive to car use. Transport prices have been favouring the move from public transport to cars for decades, with motoring becoming ever cheaper compared to the cost of living, and public transport becoming substantially more costly [2].

This trend has affected the poorest in Scotland most adversely. Bus travel is disproportionately used by people on lower incomes while higher car use is associated with higher income. So while people on lower incomes are being hit by increasing transport costs, people on higher incomes are benefiting from lower costs.

Government policy has exacerbated these price trends. While the UK Government has frozen fuel duty for eleven years, it has remorselessly pursued annual above-inflation increases in rail fares.

Putting in place the right incentives

So it seems to me that there are two courses of action that can be followed: reducing public transport fares and increasing the cost of driving. These are not mutually exclusive, but only one of these will deliver transformative change in traffic levels and transport emissions.

Firstly, we can make public transport affordable. The Scottish Government has committed to a ‘Fair Fares Review’, and we await details. However, with the commitment for free bus travel for the under-22s, the Government has already indicated that it is prepared to intervene on price in order to drive change.

Furthermore, the Government set an earlier precedent when it introduced the Road Equivalent Tariff for ferry services, which takes as its founding principle that public transport use should be no more expensive than an equivalent road journey. So if it’s good enough for ferries then why not apply the same principle for bus and rail travel? This would be a logical place to start the Review, but it remains to be seen whether the Scottish Government will be prepared to consider this.

The principal impediment to cheaper — or perhaps even entirely free — public transport is public finance. Who exactly is going to pay? The Government argues that the rail fares increases are both to recoup both the vast cost of maintaining the railway during the pandemic and the subsequent declines in demand due to increased home working. Meanwhile, free bus travel for the under-22s won’t come cheaply, while the move from fossil fuel to electric cars is beginning to further hollow out the tax revenues that the Treasury receives.

Of course, the Scottish Government could choose to direct some of the further £7bn that it intends to spend on new road-building over the next decade into subsiding public transport use. But the Scottish Ministers remain firmly wedded to new high-carbon roads, and are being egged on to build even more by their Labour and Tory political opponents, again from unidentified sources of finance.

So the second option — and the one that it is imperative to pursue irrespective of what is done with public transport fares — is to put in place a national system of road pricing. Only this provides the opportunity of discouraging unnecessary driving in targeted areas or at targeted times, while also providing an income stream that could be used to provide improved public transport services.

Last month, the House of Commons transport committee warned of the financial and environmental consequences of the failure to pursue road pricing and called for an urgent reform of motoring taxation.

But it remains to be seen how this debate will play out in Scotland. While the Labour and Tory MPs who populate the House of Commons transport committee have come out firmly in favour of road pricing, their Scottish counterparts on the Holyrood transport committee have recently stridently fought much more modest proposals for workplace parking levy powers for local authorities.

My worry is that we’ve been here before. Right back at the start of the Parliament, in 1999, the then Labour government brought in powers for local road pricing schemes. In 2005, Edinburgh tried but failed to implement congestion charging. But since: nothing. We’ve known about climate change since well before then, but investment has instead prioritised high-carbon infrastructure and the debate around transport incentives is now in a comprehensively more poisonous state than it was in 1999. So, twenty years on, and in the face of a climate crisis, are our politicians prepared to be less blinkered in their consideration of our multiple and overlapping transport crises?

 

Note

This is a revised version of an article initially contributed to The Herald for its ‘Scotland’s Future’ series and published in the paper on 2 April 2022. The author would like it to be known that we doesn’t advocate violence against car drivers as The Herald’s unfortunate choice of title for the article might be taken to imply!

Sources

[1] https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Delft_4K83_Handbook_on_the_external_costs_of_transport_Final.pdf

[2] https://www.racfoundation.org/data/cost-of-transport-index