FINANCING THE ZERO CARBON TRANSITION

ESTIMATING THE LEVEL OF CITIES’ FINANCE FOR CLIMATE ACTIONS IN TRANSPORT  

The transition to a net zero carbon economy will bring multiple benefits, not least in relation to minimising the impacts of climate change, although a substantial amount of investment is needed. Currently, there is still a lot of investment in activities that damage the environment, and which are contrary to the zero carbon transition, whereas the finance spent on climate mitigation and adaptation actions is currently not sufficient. Ian Skinner of TEPR, and TEPR Associate Marianne Pearson, estimated the climate finance spent on transport globally for a report published by the Cities Climate Finance Leadership Alliance and the World Bank. The report identified the extent of the challenge and made recommendations on how to close the gap.

The need to address climate change

Climate change is rightly becoming a high profile issue, at the political level and amongst the general public. With the UK and other countries committing to climate neutrality, or net zero carbon emissions, by 2050, action is needed to reduce greenhouse emissions across the economy. For transport, this means significantly reducing its emissions of carbon dioxide (CO₂) and so effectively ending the use of petrol, diesel and other fossil fuels in the sector.

Achieving net zero carbon emissions

Phasing out the use of fossil fuels in the transport sector requires the increased use of alternative fuels and energy sources, such as electricity, hydrogen and sustainable biofuels. The development of vehicles that are able to use these fuels, and which are also more energy efficient, is also of fundamental importance. Investment in alternatives to motorised, personal transport, such as public transport, cycling and walking, will also help to support the zero carbon transition, as well as delivering benefits in terms of improved health and less polluted and quieter urban areas.

Delivering the zero carbon transitions

The policy framework to deliver the necessary zero carbon transition is developing, supported by many of the projects that TEPR has been involved with on CO₂ emissions for cars, vans and heavy duty vehicles, low carbon fuels, consumer information, taxation and green public procurement. However, to date investment has not followed suit, as the financing of measures to reduce transport’s CO₂ emissions has fallen short of what is needed to deliver the zero carbon transition.

Estimating climate finance 

A recent report, which was launched on 30 June by the Cities Climate Finance Leadership Alliance and the World Bank, attempted to estimate the level of current climate finance in cities, in order to identify the extent of the challenge. These two organisations commissioned Ian Skinner of TEPR, and TEPR Associate Marianne Pearson, to estimate the climate finance spent on transport globally, as a contribution to this report. The report concluded with recommendations on how the finance spent on climate mitigation and adaptation actions might be increased in cities.

For more information

TEPR is an independent research consultancy that works on projects to improve the environmental performance of transport. For more information on the project, or TEPR’s work more generally, please contact Ian Skinner at TEPR (ian.skinner@tepr.co.uk), call +44 (0) 1892 663289 or see TEPR’s website. Relevant links for this report:

• The report’s Executive Summary.
• Part 1 – The Landscape of Urban Finance.
• Part 2 – The Enabling Conditions for Mobilising Urban Climate Finance.
• Overview and press release.

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