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Deliverable D1
IDENTIFICATION OF THE KEY LINKAGES
BETWEEN TRANSPORT INTENSITY AND
ECONOMIC GROWTH
Status: Public
SPRITE
GRD1-1999-11067
(Separating the intensity of transport from economic growth)
Project Co-ordinator:
Institute for Transport Studies, University of Leeds
Partners:
Marcial Echenique and Partners Ltd
PROGNOS Transport
PROGNOS Economics/Energy
Dipartimento Idraulica, Trasporti, Strade, University of Rome La Sapienza
Date: 25th JULY 2000
PROJECT FUNDED BY THE EUROPEAN
COMMISSION UNDER THE
GROWTH PROGRAMME OF THE
5th FRAMEWORK PROGRAMME
Contents
C.1
Contents
Page
List of figures
List of tables
Executive summary
1
Introduction
1.1
2
The linkages between transport and economic activity
2.1
2.1 Introduction
2.1
2.2 An overview of the linkages between transport and economic 2.1
activity
3
2.3 Economic and other influences on the demand for transport
2.1
2.3.1 Passenger transport
2.2
2.3.2 Freight transport
2.3
2.4 The influence of transport on economic activity
2.5
2.5 Conclusions
2.7
Review of transport trends across Europe
3.1
3.1 Introduction
3.1
3.2 Transport intensity
3.1
3.3 Past trends in passenger transport
3.8
3.3.1 Past trends
3.8
3.3.2 Understanding the causes of past growth in passenger transport
3.11
3.4 Past trends in freight transport
3.17
3.4.1 Past trends
3.17
3.4.2 Understanding the causes of past growth in freight transport
3.20
3.5 Future trends in passenger transport growth
3.25
3.5.1 Transport related influences on road passenger travel demand
3.25
C.2
4
5
D1: Identification of the key linkages between transport intensity and economic growth
3.5.2 Substitutes for travel
3.29
3.6 Future trends in freight transport growth
3.29
Experience of de-coupling output from economic growth in other 4.1
sectors
4.1 Review of experience from other sectors
4.1
4.1.1 Energy consumption and economic development
4.2
4.1.2 Developments by sector
4.6
4.2 Implications for the transport sector
4.10
Conclusions
5.1
5.1 Transport and economic activity
5.1
5.2 Transport trends
5.1
5.3 The de-coupling debate
5.3
References
Contents
C.3
List of figures
3.1
Index of GDP and passenger travel by mode in the EU15, 1970-95
3.3
3.2
Index of GDP and freight transport by mode in the EU15, 1970-95
3.3
3.3
Passenger travel by mode in the EU15, 1970-95
3.4
3.4
Freight transport by mode in the EU15, 1970-95
3.4
3.5
GDP and vehicle kilometres by vehicle type in the UK, 1952-97
3.5
3.6
GDP and vehicle kilometres by vehicle type in pre-unification 3.6
Germany, 1952-90
3.7
GDP, goods lifted (tonnes) and goods moved (tonne-kilometres) by 3.7
road in the UK, 1952-97
3.8
GDP and goods moved (tonne-kilometres) in pre-unification 3.7
Germany, 1950-90
3.9
Annual number of journeys, kilometres travelled and travel time per 3.9
person and GDP in the UK
3.10
Cars per 1000 inhabitants in selected EU15 countries and the USA, 3.12
1970-95
3.11
Total journeys per person, per year for households with and without 3.13
access to a car and by person type for the UK, 1995/97
3.12
Modal share of journeys per person, per year for households with and 3.13
without access to a car and by person type for the UK, 1995/97
3.13
Real changes in the cost of transport in the UK, 1970-94
3.14
3.14
Motor vehicle traffic growth on UK roads, 1987-97
3.16
3.15
Annual road goods vehicle kilometres travelled, tonnes-lifted, average 3.17
length of haul, tonne-kilometres and GDP in Great Britain, 1974-96
3.16a
Annual road tonnes-lifted, average length of haul and tonne- 3.18
kilometres for Belgium, 1970-93
3.16b
Annual road tonnes-lifted, average length of haul and tonne- 3.18
kilometres for the Netherlands, 1970-93
3.16c
Annual road tonnes-lifted, average length of haul and tonne- 3.19
kilometres for France, 1970-93
C.4
D1: Identification of the key linkages between transport intensity and economic growth
3.16d
Annual road tonnes-lifted, average length of haul and tonne- 3.19
kilometres for Germany, 1970-93
3.17a
Annual rail tonnes-lifted, average length of haul and tonne-kilometres 3.20
for Belgium, 1970-93
3.17b
Annual rail tonnes-lifted, average length of haul and tonne-kilometres 3.21
for the Netherlands, 1970-93
3.17c
Annual rail tonnes-lifted, average length of haul and tonne-kilometres 3.21
for France, 1970-93
3.17d
Annual rail tonnes-lifted, average length of haul and tonne-kilometres 3.22
for Italy, 1970-93
3.18
Linking economic activity and road freight traffic
3.24
4.1
Primary energy consumption and GDP in the EU15, 1970-94
4.3
4.2
Energy consumption, electricity consumption, CO2 emissions and 4.5
GDP in the EU15, 1985-97
4.3
Energy intensities by sector in the EU15, 1985-97
4.7
4.4
Energy intensity of steel production in Western Germany, 1980-94
4.7
4.5
Energy consumption of dishwashers in Western Germany, 1980-98
4.8
4.6
Energy consumption and energy intensity of road transport in 4.9
Germany, 1980-94
List of tables
3.1
Comparison of changes in trip rates, over time, for selected European 3.9
countries
3.2
Comparison of changes in average time spent per trip, over time, for 3.10
selected European countries
3.3
Comparison of changes in average distances per trip, over time, for 3.10
selected European Countries
3.4
Income and travel per person in EU countries in 1995
4.1
Implications for transport sector de-coupling, drawn from the energy 4.12
sector
3.11
Executive summary
E.1
Executive summary
This is the first deliverable of the SPRITE (Separating the intensity of transport from
economic growth) project. The project is looking at the observed correlation between
economic growth and growth in the movement of people and goods. In particular it is
seeking ways to separate transport from economic growth, that is, to reduce the
transport intensity of the economy. In this respect, the project is very much concerned
with the trade off between economic growth and environmental sustainability.
Transport and economic activity are interrelated; economic activity can influence the
demand for transport but, at the same time, changes in the transport system can also
influence economic activity. The demand for transport, particularly road transport,
has increased strongly across EU countries in recent decades. Of particular note:
-
growth in passenger car travel has been far more rapid than that in other
surface modes and has also outpaced the rate of growth of economic activity;
-
the major proportion of past passenger travel growth across all modes has
arisen from increases in the length of trips rather than in the overall number of
trips;
-
the quantity of freight moved by road has grown far more rapidly than that
moved by other modes and has also outpaced the rate of growth of economic
activity and
-
increases in the average length of haul have been the predominant source of
growth in freight tonne-kilometres in recent decades.
The main factors that have encouraged the observed growth in road passenger and
freight transport include:
-
changes in the relative costs of transport by different modes;
-
increased income levels;
-
increased car availability;
-
improvements in the supply of transport (speed, comfort, reliability);
-
land use effects including changes in migration and commuting patterns;
-
economic changes affecting the commodity structure of the economy;
-
European integration and globalisation and
-
changes in the operational behaviour of companies.
To date there is little evidence to suggest that the growth of transport demand has been
or ever can be separated or ‘de-coupled’ from the rate of economic growth.
Moreover, in some countries certain types of transport have historically grown at a
E.2
D1: Identification of the key linkages between transport intensity and economic growth
much faster rate than that of the economy in general. De-coupling can, however, be
said to have occurred in some other sectors of the economy. For example, taking the
energy sector as a whole, it can be seen that the energy intensity of the EU economy
has been systematically decreasing since at least the mid-1970s. Within the energy
sector, though, the experience of individual sub-sectors has been more varied.
Though significant differences exist between the transport and energy sectors, there
may be some lessons that can be drawn from experience gained in the energy sector.
De-coupling there occurred chiefly as a result of:
-
sometimes sharp increases in the cost of primary energy inputs;
-
economic restructuring, leading to a relative decline in the economic
importance of high energy using industries and
-
regulation, driven by environmental pressures.
The response to these pressures and trends, by both households and firms, was to seek
more energy efficient ways of meeting their own needs in terms of consumption or
production. Firms also responded to regulatory and environmental pressures by
switching to ‘cleaner’ energy producing or using technologies. Should the political
will exist, there is no reason why similar pressures could not be applied in the
transport sector.
The problem is that transport is different. To begin with, it is not straightforward to
define exactly which transport ‘outputs’ should be de-coupled from economic growth.
After all, the ability to travel easily and cheaply is essentially an economic benefit to
individuals and firms. Should policy therefore be concerned to minimise travel only
by private car and for leisure purposes, for example? Alternatively, perhaps it should
just focus on travel at certain times of day and/or locations? These are questions that
go to the heart of the ‘de-coupling’ debate.
In seeking to de-couple transport from economic growth it is important to bear in
mind the ultimate objectives of policy. In other words, what policy makers are really
seeking to minimise are the unwanted environmental and other side effects - the
negative externalities - created by transport. This is a debate that will be taken
forward in the second deliverable of the SPRITE project.
Introduction
1.1
1. Introduction
This is the first deliverable of the SPRITE (Separating the intensity of transport from
economic growth) project. The project is looking at the observed correlation between
economic growth and growth in the movement of people and goods. In particular it is
seeking ways to separate transport from economic growth, that is, to reduce the
transport intensity of the economy. In this respect, the project is very much concerned
with the trade off between economic growth and environmental sustainability.
SPRITE has three core objectives:
(i)
To examine the linkages between transport and economic growth and identify
objectives and indicators that can be used as a guide to reducing transport
intensity.
(ii)
To identify all possible measures (both within and outside the transport sector)
that could be used to reduce transport intensity.
(iii)
To assess which of the measures, identified in (ii) are potentially practical and
cost efficient and which offer the best trade off between environmental
protection, transport spending and economic growth.
This deliverable is concerned with one aspect of the first project objective, an
examination of the linkages between transport and economic growth. The second
project deliverable will focus on the identification of objectives and indicators that can
be used as a guide to reducing transport intensity.
Chapter 2 of this deliverable provides an overview of the linkages between transport
and economic activity. The two are interrelated; economic activity can influence the
demand for transport but, at the same time, changes in the transport system can also
influence economic activity. The chapter begins by looking at economic and other
influences on the demand for transport. This section provides an introduction to the
subsequent, more detailed, review of transport trends across Europe, contained in
Chapter 3. The final part of Chapter 2 looks at the ways in which transport can
influence economic activity.
Chapter 3 reviews transport trends across Europe and looks, in more detail, at
economic and other influences on the demand for transport. It begins with a
discussion of transport intensity and briefly reviews some of the evidence regarding
changes in transport intensity that have taken place at EU and national level. The
chapter goes on to examine past and present trends in passenger and freight transport
and attempts to explain the driving forces behind those trends. It concludes by
considering some possible future transport trends.
Chapter 4 looks at the experience of other sectors of the economy, in particular the
energy sector, in separating or ‘de-coupling’ growth in their output from economic
growth. It begins by establishing the meaning of ‘de-coupling’ in the energy sector
and examines whether de-coupling has taken place in all parts of the sector. It then
goes on to consider the causes of energy sector de-coupling and concludes by drawing
1.2
D1: Identification of the key linkages between transport intensity and economic growth
some implications for the development of a de-coupling strategy in the transport
sector.
Chapter 5 concludes the deliverable and looks forward to some of the issues that will
be taken forward in the second project deliverable.
The linkages between transport and economic activity
2.1
2. The linkages between transport and economic
activity
2.1
Introduction
This chapter considers the linkages between transport and economic activity. Section
2.2 provides a brief overview of this subject area. Sections 2.3 and 2.4, respectively,
then go on to look at economic and other influences on the demand for transport and,
conversely, the influence of transport on economic activity. This latter topic has most
recently been examined in work carried out in the UK by the Standing Advisory
Committee on Trunk Road Assessment (SACTRA). SACTRA were requested, by the
Department of the Environment, Transport and the Regions (DETR) to investigate the
linkages between transport and economic activity.
Their subsequent report
(SACTRA, 1999) covers this topic in some detail and many of the areas covered are
of direct relevance to the SPRITE project. Section 2.4 provides only the most fleeting
of summaries of the SACTRA work. Readers interested in the detail of the subject
matter are directed to the SACTRA report itself. Finally, section 2.5 contains a few
brief conclusions to the chapter.
2.2
An overview of the linkages between transport and economic activity
SACTRA note that, ‘the close correlation between economic growth and increased
movement – and, since 1945, the correlation in particular between road traffic growth
and economic growth – is seen as evidence of a close link between transport and the
economy. But this does not help clarify the direction of cause and effect – whether
increased movement is a sign of economic growth stimulated by other factors;
whether traffic growth, facilitated by transport improvements, itself stimulates
economic activity; or whether there is some iteration of the two.’
They go on to say that, ‘on the one hand, there are linkages which can help explain
how transport has an impact on economic activity. On the other hand, economic
activity itself can shape the demand for transport. There may often be iterations
between these two aspects – for example, a transport intervention may lead to changes
in the economy which in turn may have further impacts on the demand for transport.’
The following section summarises the evidence concerning the latter type of linkage,
that is, the role of economic activity in shaping the demand for transport. This topic is
considered in more detail in Chapter 3. Section 2.4 then goes on to discuss the first
type of linkage - how transport can impact on economic activity.
2.3
Economic and other influences on the demand for transport
The demand for transport, particularly transport by road, has increased strongly across
EU countries in recent decades. Sections 2.3.1 and 2.3.2, consider the key trends and
main driving forces that have been important in the passenger and freight transport
markets.
2.2
D1: Identification of the key linkages between transport intensity and economic growth
2.3.1 Passenger transport
Key trends
For passenger transport, across all modes:
-
the average number of trips made by a particular type of person exhibits
reasonably similarity across the EU;
-
when broken down by trip purpose, different categories of people have
different needs to travel but, in general, the young and the retired make the
fewest trips while those in employment make the most;
-
the number of trips made does not vary greatly either over time or between
countries;
-
the major proportion of past passenger travel growth has arisen from increases
in the length of trips rather than the overall number of trips and
-
growth in overall passenger travel demand is quite closely correlated with
economic growth.
Looking at particular modes:
-
growth in car travel has been far more rapid than that in other surface modes;
-
though air travel has grown rapidly, much of its market is over distances where
car cannot easily compete, hence it has had little impact on the demand for car
travel;
-
because car travel now accounts for such a large share of all passenger travel,
even strong future growth in rail travel would not significantly reduce the
dominance of car travel and
-
the main growth in car travel has not been in congested city centres but in the
less congested outer suburbs and the surrounding areas outside cities – areas in
which public transport is currently unable to compete cost effectively with the
car.
Driving forces
To understand the factors that create and influence the demand for transport, the key
concept is that transport is a derived demand. It generally occurs as an indirect result
of trying to achieve some other goal. Travel is not normally of central importance in
its own right.
There are certainly some cases where people go out for a spin in a car at weekends to
see the countryside. But even just within the category of leisure trips, trips where the
travel is the central purpose of the trip are in a minority, compared to trips where
people are trying to get quickly and cheaply to a beach, a sports or cultural centre, or a
park. For example, in 1992/94 in the UK the trip purpose ‘day trip/walk’ accounted
for only 4.0% of total person-kilometres travelled by residents of urban areas (data
The linkages between transport and economic activity
2.3
from the UK National Travel Survey, quoted in Potter, 1997). For most passenger
trips and for all freight trips, the travel is just a necessary side effect of trying to carry
out some social or economic activity. It is the activity that is of primary importance
and the travel that is of secondary importance in determining people’s behaviour.
When travel is slow, tedious and expensive it will be important to people to avoid
travel as much as possible. People will need to be satisfied with the activities that are
close at hand. One hundred years ago every part of each EU country would have had
its own brewery/winery to provide alcohol for the local population. Only the finest
drinks were exported for the consumption of the wealthy in foreign countries.
Nowadays fashionable Europeans are drinking Japanese and Mexican beers and
Chilean and Australian wines. This has come about because of two interrelated
factors. First, the costs of transport and distribution have reduced greatly so that the
unit cost of travel is an ever decreasing proportion of the cost of production of many
goods. Second, the average income of individuals in the EU has increased greatly,
allowing them more money to spend on refining their choices and on satisfying their
quest for variety. This increases the demand for goods travel.
Similar trends are evident in the case of passenger travel. Nowadays, people will
travel long distances on fast motorways to go to a special restaurant or a sporting
event for the day. Fifty years ago all but the very rich took their annual holidays in
their own country, that is if they had any annual holidays at all. Then came the rise in
travelling abroad in the Summer to the sunny South of Europe. More recently, there
has been major growth in weekend breaks across the whole year. Again, here, the
increase in the demand for travel is a combination of the same two factors. The travel
itself has become less onerous through being faster, more comfortable and relatively
cheaper, whilst the population, through being richer, is prepared to spend more money
on luxuries such as a few days away from home in a hotel.
This illustrates the two main forces underlying the past growth in demand for travel:
-
the improved characteristics of the supply of travel in terms of speed, comfort,
reliability, cost and so on and
-
the strong positive relationship between the demand for travel and economic
growth.
Chapter 3 reviews transport trends across Europe and looks in more detail at the
forces which have underlain those trends.
2.3.2 Freight transport
Key trends
For freight transport:
-
the quantity of freight moved by road has grown more rapidly than GDP whilst
that moved by rail, pipeline and inland waterway has grown at a slower rate or
actually decreased;
2.4
D1: Identification of the key linkages between transport intensity and economic growth
-
in absolute terms, road freight is by far the most important form of freight
transport;
-
disaggregation of freight tonne-kilometres into tonnes-lifted and average
length of haul shows that the role of these two variables in contributing to the
overall increase in overall tonne-kilometres has varied through time, though
increases in the average length of haul have been the predominant source of
growth in recent decades;
Driving forces
Rothengatter and Szimba (2000) identify a number of different forces which have
contributed to trends of the type outlined above. These are summarised under the
following headings:
-
changes in commodity structure;
-
European integration and globalisation;
-
changes in the operational behaviour of companies and
-
application of advanced information and communication technologies (ICT).
Changes in commodity structure
The process of economic change has meant that bulk goods such as coal, iron and
steel have become less important, in modern economies, relative to ‘emerging
commodities’ such as vehicles, machines, manufactures, foods and chemical goods.
For several reasons the modes rail and inland waterway were more competitive in the
markets for the transportation of bulk goods than they are for the ‘emerging
commodities’. As a result, rail and inland waterway have tended to lose market share
to road freight. The ‘emerging commodities’, for example, tend to make certain
demands on their mode of transport. These include the need for quick, reliable and
flexible transport; often the need for careful transportation and direct transport with
few or no interchanges. Road transport is often, therefore, better suited to moving
these type of goods.
European integration and globalisation
The processes of European integration and globalisation have intensified trade both
between EU countries and between EU countries and the rest of the world. Both the
volume - and the distances - of goods carried have tended to increase as a result. Road
has tended to benefit more, from the increased demand for movement of goods, than
have other freight modes. International rail transport, for example, has been hampered
- for both technical and bureaucratic reasons - by delays and lack of reliability
associated with border crossings.
Changes in the operational behaviour of companies
Changes in the production technologies employed by companies has also tended to
favour road against other forms of freight transport. Modern production techniques
The linkages between transport and economic activity
2.5
have led firms to seek to reduce their stock levels, shorten turn around times and
generally improve the flexibility to react quickly to the needs of the market. The most
well-known example of such a technology is Just-in-Time production. This approach
requires a quick, reliable and highly flexible transport service of the sort which only
road can currently provide.
Application of advanced information and communication technologies (ICT)
Application of ICT has enhanced the efficiency and reliability of freight transport, for
example by improving vehicle utilisation rates and reducing delivery times. Whether
the net effect of ICT is to increase or decrease overall freight tonne-kilometres is not
clear cut. For example, reduced delivery times enables more deliveries to be made in
a given period of time. To date, ICT in freight transport has mainly been applied in
the road sector. This has tended to enhance the competitiveness of road vis-a-vis
other modes.
Chapter 3 looks in more detail at the forces which have underlain the observed growth
in demand for road freight transport.
2.4
The influence of transport on economic activity
The Current debate on the relationship between transport and economic activity is
summarised by SACTRA as follows. ‘Traditionally, transport has been thought of in
terms of derived demand, implying that the basic causality runs from the level of
activity in the economy to the demand for transport. People and businesses demand
transport in order to enable them to carry out desired activities. This is too simple,
however, since changing the provision of transport enables changes in the location and
composition of activities. For individuals, this might be reflected in changes in
commuting patterns or holiday destinations. For businesses, the impact might be felt
in terms of new sources of supplies, reorganisation of production or access to more
distant markets.’ SACTRA quotes a range of international sources on this debate.
These include USA Transportation Research Board (1997) who concluded that
infrastructure investments have a modest positive effect on the nation’s private
economic activity and the study for the European Commission on the impact of the
Trans European Networks.
SACTRA commence their investigation into the influence of transport on economic
activity by establishing what theory has to say about the causes of economic growth.
Traditional economic theory suggested that growth depends on greater inputs, or more
efficient use, of capital and labour. Investment would therefore have an effect on the
level of production but only a transient effect on its rate of growth. More recent
theories also treat skills, knowledge and infrastructure as forms of capital.
Improvements in these can ultimately increase growth rates as they spread through the
economy. In modern theories, innovation therefore plays a central role in stimulating
growth.
SACTRA go on to look at the potential role of transport improvements in relation to
innovation, barriers to trade, freight and logistics, the labour and housing markets and
local and regional effects. Their comments under each of these headings are
summarised below.
2.6
D1: Identification of the key linkages between transport intensity and economic growth
Innovation
Transport improvements might be expected to influence innovation through:
-
increasing the size of markets, allowing higher expected sales to cover fixed
costs in the event of a successful innovation;
-
encouraging the formation of clusters of firms whose specialist knowledge has
synergetic effects;
-
stimulating technology transfer by helping to attract foreign investment and
-
leading to better integration of markets and enhancing competition.
Barriers to trade
Transport costs might also be considered as being analogous to trade barriers.
Opening up of markets through the reduction of trade barriers - or improvement of the
transport system - is likely to have a positive effect on economic activity as a result of:
-
the efficiency of larger scale production;
-
greater competitive pressures;
-
concentration of certain products in those regions most suited to their
production and
-
transfer of new technologies.
It is important to note, however, that such a process is likely to benefit some areas at
the expense of other areas.
Freight and logistics
SACTRA’s comments here tend to reinforce the findings of McKinnon and
Woodburn (1993) and of the REDEFINE project (1999), discussed in more detail
later, in Chapter 3. The direct impact of transport improvements on a firm’s transport
costs are likely to be negligible in terms of increasing output however transport
improvements may allow firms to re-organise their operations and thus benefit from
significant cost savings, in excess of the simple reduction in transport costs. Such
savings might, for example, arise from a reduction in the number of production
locations or depots and/or from lower stock levels. There may also be other
opportunities to improve efficiency and/or output as a result of improved vehicle
utilisation, the chance to source supplies more widely and to compete for sales in
more distant markets.
Labour and housing markets
Transport improvements may affect labour productivity through:
-
reducing time spent travelling - to and from and - in the course of work and
The linkages between transport and economic activity
-
2.7
firms being able to access a wider labour market.
A common response of commuters to a transport improvement is to move house to an
area further away from work in order to benefit from lower house prices or a better
quality of life. This type of effect may, to some extent, offset the commuting benefits
for the labour market. Savings in commuting time may, as a result, be captured in the
housing market rather than the labour market.
Local and regional effects
SACTRA note that changes in transport costs are likely to have an ambiguous effect
on the relative development of different regions. Thus, high transport costs between a
region and the outside world may help to ‘protect’ firms serving the local market from
competition from firms in other regions. A lowering of transport costs will not,
therefore, automatically ensure access to larger markets. Lower transport costs may
benefit firms with the potential to achieve larger economies of scale but they may also
benefit firms that have lower input costs. Such firms may either be located within the
region where the transport improvement takes place, or in another region.
This analysis is used to explain the so-called ‘two way road’ argument. Improved
transport facilities have effects at both ends of the improved facility. Which end of
the link derives the greater benefit will depend upon:
-
whether either region has unique assets to exploit (e.g. natural resources);
-
the relative configuration of scale economies;
-
the size of the local markets;
-
local labour and land market conditions and
-
the nature and scale of backward and forward linkages in local sectors.
2.5
Conclusions
This chapter has contained a general discussion of the linkages between transport and
economic activity. It was noted that, in most EU countries, a close correlation exists
between economic growth and increased movement of both people and goods.
Transport and economic activity are interrelated. The first part of this chapter
summarised the ways in which economic activity can influence the demand for
transport. The second part of the chapter then went on to take a brief look at the ways
in which transport can exert an influence on economic activity. Chapter 3 now returns
to the former topic in more detail, the way in which economic and other effects can
influence the demand for transport.
Review of transport trends across Europe
3.1
3. Review of transport trends across Europe
3.1
Introduction
This chapter reviews transport trends across Europe. Section 3.2 discusses the
concept of ‘transport intensity’ and briefly reviews the evidence regarding changes in
transport intensity that have taken place at EU and national level. Sections 3.3 and 3.4
go on to examine past and present trends in passenger and freight transport and
attempt to explain the driving forces behind those trends. Finally, sections 3.5 and 3.6
consider possible future trends in passenger and freight transport.
Where possible, the analysis carried out in this chapter makes use of data at the
European level. Unfortunately, it has not always been possible to obtain suitable data
to support the analysis at this level. Where European level data is not available, data
for one or more European countries has been used. In some cases it has been
necessary to rely on data solely for the United Kingdom. The authors believe that
many of the findings, based on data from the UK, also hold for a number of other
European countries and continue to seek additional support for their arguments.
3.2
Transport intensity
‘Transport intensity’ is an aggregate measure of the importance of transport in the
economy, in principle covering all modes (SACTRA, 1999). The idea was initially
put forward by Peake (1994), drawing on the concept of ‘energy intensity’, used in the
energy sector as an indicator of the efficiency with which energy was being used in
production and consumption.
Peake defined the concept of ‘gross mass movement’, which included both passenger
and freight mobility within a single index, expressed in tonne-kilometres. More
recent work on transport intensity has looked separately at passenger and freight
movements and has considered a broader range of measures including passenger
kilometres, vehicle kilometres, tonnes lifted and tonne-kilometres.
Figures 3.1 and 3.2, respectively, compare the growth in passenger and freight
transport with GDP for the EU15, over the period between 1970 and 1995. From the
Figures it can be seen that the number of passenger-kilometres travelled by air and by
private car have grown at a faster rate than that of the economy, whereas passenger
travel by rail, bus and coach have grown at a slower rate over the same period.
Similarly, in the case of freight tonne-kilometres, road freight has grown more rapidly
than GDP whilst freight moved by rail, pipeline and inland waterway has grown at a
slower rate than the economy.
A question worth asking is whether there are “turn offs” which prevent rail, bus,
coach, pipes and inland waterways from growing as fast as road transport and,
perhaps, result in a lower saturation level for these modes. Intuitively it seems likely
that the advantages for both passengers and freight of door-to-door travel, which are
only possible for road transport, will influence both the total volume of travel and the
proportion that travel by road. The ideal form of ‘decoupling’ would provide the
3.2
D1: Identification of the key linkages between transport intensity and economic growth
economic and welfare benefits of individual road transport with the efficiencies of the
higher density modes.
Though it is interesting to look at the relative growth in different types of travel it is
also important to be clear about the relative importance of different modes. Figures
3.3 and 3.4 show the evolution of passenger and freight transport by mode in the
EU15 over the same time period.
Review of transport trends across Europe
3.3
GDP and passenger kilometres (1990=100)
Figure 3.1 – Index of GDP and passenger travel by mode in the EU15, 1970-95
140
120
Air
100
Private car
GDP
80
Bus & coach
60
Rail
40
20
1970
1975
1980
1985
1990
1995
Source: EU transport in figures, statistical pocket book, 2 nd issue, EUROSTAT (1997a) and National Accounts
ESA, Aggregates, 1970-1995, Theme 2A, EUROSTAT (1997b)
GDP and tonne-kilometres (1990=100)
Figure 3.2 – Index of GDP and freight transport by mode in the EU15, 1970-95
130
120
110
Road
100
Pipelines
90
GDP
80
Inland waterways
70
Rail
60
50
40
1970
1975
1980
1985
1990
1995
Source: EU transport in figures, statistical pocket book, 2 nd issue, EUROSTAT (1997a) and National Accounts
ESA, Aggregates, 1970-1995, Theme 2A, EUROSTAT (1997b)
3.4
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.3 – Passenger travel by mode in the EU15, 1970-95
Billion passenger-kilometres
4000
3500
3000
Private car
2500
Bus & coach
2000
Rail
1500
Air
1000
500
0
1970
1975
1980
1985
1990
1995
Source: EU transport in figures, statistical pocket book, 2nd issue, EUROSTAT (1997a)
Figure 3.4 – Freight transport by mode in the EU15, 1970-95
Billion tonne-kilometres
1200
1000
800
Road
Rail
600
Inland waterways
Pipelines
400
200
0
1970
1975
1980
1985
1990
1995
Source: EU transport in figures, statistical pocket book, 2 nd issue, EUROSTAT (1997a)
Review of transport trends across Europe
3.5
In both Figures the most striking feature is the enormous growth in road (private car
and freight) transport that has taken place relative to other modes.
Figure 3.5 looks in more detail at the growth of vehicle kilometres and economic
growth in the UK over the period between 1951 and 1995. It can be seen that the
distance travelled by buses and coaches and by heavy goods vehicles (HGVs) have
grown more slowly than GDP. Light goods vehicle (LGV) kilometres, in contrast,
have grown more rapidly than GDP, whist growth in car and taxi kilometres have far
outperformed all other modes of transport.
Figure 3.5 – GDP and vehicle kilometres by vehicle type in the UK, 1952-97
Index of GDP and vehicle kilometres (1952 = 100)
1250
1050
850
Cars and taxis
LGVs
GDP
650
HGVs
Buses and coaches
450
250
50
1952
1961
1970
1979
1988
1997
Source: Office for National Statistics (www.ons.gov.uk), Social Trends Data Set, On-Line Statistics
(www.statistics.gov.uk/statbase/datasets.asp) and Transport Statistics Great Britain, 1998 edition (DETR, 1998).
A similar pattern is shown in Figure 3.6 for pre-unification Germany. Between 1952
and 1990 growth in car kilometres far outpaced GDP growth. In contrast, freight and
bus vehicle kilometres grew at a similar rate to the economy.
3.6
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.6 – GDP and vehicle kilometres by vehicle type in pre-unification
Germany, 1952-90
Index of GDP and vehicle kilometres
(1952=100)
2600
2100
1600
Cars
Buses
GDP
1100
Lorries
600
100
1952 1957 1962 1967 1972 1977 1982 1987
Source: Verkehr in Zahlen, 1991 (DIW, 1991)
Figure 3.7 shows the growth in freight tonnes-lifted and tonne-kilometres moved by
road and economic growth in the UK over the period between 1952 and 1997. It can
be seen that tonnes-lifted have grown more slowly than GDP, over this period, whilst
tonne-kilometre growth has far outstripped the rate of expansion of economic activity.
Figure 3.8 shows that for pre-unification Germany freight tonne-kilometres have
grown at a similar rate, though slightly more slowly than GDP, over the period
between 1950 and 1990.
The general pattern of tonne-kilometres growing at a similar, or faster, rate than GDP
and somewhat slower growth in tonnes-lifted is confirmed in work by Rothengatter
and Szimba (2000). They examined whether or not a ‘de-coupling’ of the growth of
freight transport from economic growth has been achieved in Western European
freight transport markets. Using data for Belgium, France, Germany, Italy, the
Netherlands, Spain and the UK, the following results were obtained:
-
Decoupling of growth of freight transport tonnes-lifted from growth of GDP
has already taken place in many Western European countries. Analysis for
Belgium, France, Germany, the Netherlands and the UK shows that growth
rates of tonnes-lifted are lower than growth rates of GDP. There are, however,
country-specific differences. In Belgium, Germany and the Netherlands there
is a strong positive correlation between tonnes-lifted and GDP. In France and
the UK tonnes-lifted appears to be less related to economic growth.
Review of transport trends across Europe
3.7
Index of GDP, tonnes and tonne-kilometres (1952 = 100)
Figure 3.7 – GDP, goods lifted (tonnes) and goods moved (tonne-kilometres) by
road in the UK, 1952-97
550
500
450
400
350
Goods moved
GDP
300
Goods lifted
250
200
150
100
1952
1967
1982
1997
Source: Office for National Statistics (www.ons.gov.uk), Social Trends Data Set, On-Line Statistics
(www.statistics.gov.uk/statbase/datasets.asp) and Transport Statistics Great Britain, 1978-1988 edition
(Department of Transport, 1989) and 1998 edition (DETR, 1998).
600.0
550.0
500.0
450.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
Index of GDP and tonne-kilometres
(1950=100)
Figure 3.8 – GDP and goods moved (tonne-kilometres) in pre-unification
Germany, 1950-90
Source: Verkehr in Zahlen, 1991 (DIW, 1991)
GDP
Goods moved
3.8
-
D1: Identification of the key linkages between transport intensity and economic growth
The relationship between freight tonne-kilometres and GDP is not so clear cut.
De-coupling has not taken place in Germany, Belgium, Italy and Spain. There
is some evidence of de-coupling tendencies in France and the UK, though decoupling cannot be said to have been achieved in those countries, either.
Clearer de-coupling tendencies are evident in the Netherlands.
Finally, it is worth noting that although GDP is the most widely used measure for
assessing the development of the economy, it does have some drawbacks. GDP can
be defined as the sum of all the value added in the economy during any particular year.
The rate of economic growth is then typically defined as the annual percentage change
in GDP. One drawback of using GDP as a measure of economic progress is that it
concentrates on flows of output that involve monetary transactions. Activities such as
housework are not, therefore, included within a GDP based measure of economic
activity. GDP also fails to take account of damage to the environment resulting from
economic activity.
In seeking to measure the transport intensity of the economy and in the course of
designing policies to reduce transport intensity, it is important to bear in mind the
drawbacks of GDP-based measures of activity. The debate on decoupling should not
lose sight of the fact that GDP is the most significant indicator of growth, ultimately,
it is the rate of increase in general welfare which it is desirable to maintain. It is also
important to note that interdependencies exist between transport and GDP. For
example, in 1998 the transport sector (transport services and manufacturing of
transport equipment) in the EU accounted for approximately 10% of GDP. Equally,
private households spent approximately 16% of their total final private consumption
on transport.
3.3
Past trends in passenger transport
3.3.1 Past trends
Figure 3.9 shows the growth through time on all forms of passenger transport in terms
of the yearly number of trips, of travel hours and of passenger kilometres per person in
the UK. The trends exhibited by the different statistics are not the same. Whereas
travel distance has increased rapidly, the travel time and the number of trips per
person have both grown quite slowly and at similar rates.
Trip making behaviour exhibits a reasonable amount of similarity across EU
countries. In research carried out under other European Commission research
projects, ME&P analysed data from the national travel surveys of a number of
different countries. An extract from the results of this analysis, covering France,
Finland, Denmark, the UK and the Netherlands is reported in Tables 3.1, 3.2 and 3.3.
Table 3.1 compares changes in trip rates over time. It can be seen that the number of
trips per person has remained fairly stable through time in all of the countries
surveyed.
Review of transport trends across Europe
3.9
Figure 3.9 – Annual number of journeys, kilometres travelled and travel time per
person and GDP in the UK
Index (1972/73 = 100; for time only, 1985/86 = 100)
160
150
140
Distance per annum
Journeys per annum
Travel time per annum
GDP
130
120
110
100
90
1972/73
1975/76
1978/79
1985/86
1989/91
1992/94
1994/96
Notes: Data relates to all forms of passenger transport. Data on travel time are not available prior to 1985/86.
Source: UK National Travel Survey (DETR, 1997a)
Table 3.1 – Comparison of changes in trip rates, over time, for selected European
countries
Country
Year of survey
Trips per day, per Year of survey
Trips per day, per
person
person
France
1982
3.3 1994
3.2
Finland
1974
3.0 1992
3.0
Denmark
1992
2.9 1995
2.7
UK
1985/86
2.8 1994/96
2.9
Netherlands
1986
3.4 1996
3.5
Source: ME&P analysis of the National Travel Surveys of various countries in the course of the STREAMS and
SCENES projects. See References section for details of individual country data sources.
Notes: Figures shown are for all trips.
Table 3.2 compares changes in the average time spent per trip, over time. In three out
of the four countries for which data were available, the average time per trip can be
seen to have increased very slightly, though on an annual basis the changes are very
minor. Finally, Table 3.3 compares changes in average distances travelled per trip.
This table confirms that the UK is not unusual in recording significant increases in the
length of trips through time.
3.10
D1: Identification of the key linkages between transport intensity and economic growth
Table 3.2 – Comparison of changes in average time spent per trip, over time, for
selected European countries
Country
Year of survey
Average time spent Year of survey
Average time spent
per trip (minutes)
per trip (minutes)
France
1982
16.4 1994
17.3
Finland
1974
24.6 1992
25.6
Denmark
1992
19.6 1995
18.9
UK
1985/86
19.7 1994/96
20.3
Netherlands
1986
No data 1996
No data
Source: ME&P analysis of the National Travel Surveys of various countries in the course of the STREAMS and
SCENES projects. See References section for details of individual country data sources.
Notes: Figures shown are for all trips.
Table 3.3 – Comparison of changes in average distances per trip, over time, for
selected European countries
Country
Year of survey
Ave.
distance Year of survey
Ave.
distance Average annual
per trip (kms)
per trip (kms)
% increase
France
1982
5.2 1994
7.3
2.9
Finland
1974
12.2 1992
17.2
1.9
Denmark
1992
12.0 1995
13.2
3.2
UK
1985/86
8.3 1994/96
9.9
1.8
Netherlands
1986
10.0 1996
10.8
0.8
Source: ME&P analysis of the National Travel Surveys of various countries in the course of the STREAMS and
SCENES projects. See References section for details of individual country data sources.
Notes: Figures shown are for all trips.
When broken down by trip purpose different categories of people have different needs
to travel. However, taking all trips together, in general the young and the retired make
the fewest trips while those in employment make the most trips. The number of trips
made does not vary enormously either over the years, or between countries. The
major proportion of past passenger transport growth has arisen from increases in the
length of trips rather than from increases in the overall number of trips.
There are some indications that the relationship between personal travel, and income
changes when a threshold level has been reached. Table 3.4 shows the EU countries
ranked in order of income per head.
The figures suggest that there is more similarity between the propensity to travel per
head in the EU than in income per head. It is noticeable that the four countries with
the lowest income per head all appear to have a considerably higher ratio of per capita
kilometres of travel to per capita income than for the other countries. Portugal and
Greece have the lowest income per head, by a substantial margin, and also the lowest
kilometres of personal travel. Nevertheless, the kilometres ‘bought’ per Euro of
income in Portugal are some 50% higher than the EU average.
Review of transport trends across Europe
3.11
Table 3.4 – Income and travel per person in EU countries in 1995
Personal income per
Kilometres per capita in 1995
Kilometres per Euro
capita in 1995
of income in1995
(1990 Euros)
per year (Km)
per day (Km)
(Km/1990 Euros)
Portugal
3946
8933
24
2.3
Greece
4022
10791
30
2.7
Ireland
6736
12947
35
1.9
Spain
6863
13476
37
2.0
UK
8476
12103
33
1.4
Germany
9318
11242
31
1.2
Netherlands
9318
11176
31
1.2
Sweden
9510
13765
38
1.4
Italy
9731
12988
36
1.3
Austria
9839
12906
35
1.3
Benelux
9949
13390
37
1.3
Finland
9847
12546
34
1.3
France
10330
13394
37
1.3
Denmark
11494
13930
38
1.2
Source: European Union Energy Outlook to 2020, Table 6.1, (European Commission, 1999)
Few other patterns can be observed at this aggregate level, though it appears likely
that there will be greater distances of personal travel in more dispersed regions. It is
therefore possible to put forward a cautious hypothesis that the rate at which travel
growth exceeds income growth may moderate at higher income levels but that any
actual reductions will almost certainly require structural changes (possible
interventions?) in the patterns of social and economic life.
3.3.2 Understanding the causes of past growth in passenger transport
This section considers, in more detail, the causes and mechanisms that have generated
the past growth in passenger transport. The focus is particularly on car travel since
this has been the major growth mode. Many interrelated trends have combined to
generate the observed rapid growth in car kilometres. These include the following
causes:
(i) The population has grown through time - this has been a minor source of road
traffic growth. The Great Britain population grew by just under 5% over the years
1970 to 1993 while car and taxi kilometres increased by 118% over this period.
Likewise for the EU as a whole, a population growth of under 9% has translated
into a growth of 138% in car and taxi kilometres (Sources: Eurostat, 2000, Table
1.6 and Department of Transport, 1996, Table 7.4).
(ii)A greater proportion of the population are now in those population age segments
that have the highest trip rates, that make the longest trips and that are most likely
to use cars. In 1995 an annual average of 10,800 kilometres (DETR,1997a) was
travelled in the UK by those in the most mobile group, namely those between the
ages of 16 and 59. This is 130% greater than the average distance for the under
15s, and 118% greater than that for the over 60s. Furthermore, this most mobile
group is the population segment which also has the largest proportion of its travel
taking place by car. Because demographic pyramids are not smooth through time,
the last 20 years has seen relative growth in the 16 to 64 age group, compared to
3.12
D1: Identification of the key linkages between transport intensity and economic growth
the growth in other age groups. In the UK, between 1971 and 1991 the proportion
in the most mobile group increased from 62% to 64% of the population (Office for
National Statistics, 1997b, Table 1.5).
(iii)More people have access to cars - both more households have cars, and more
individuals within the household have cars. Average household size has reduced
while the average number of cars in households with two or more adults has
increased rapidly. The increased car ownership is due largely to the average
incomes of individuals increasing more rapidly than the cost of car ownership (see
Figure 3.13) - this reduces their likelihood of using other modes and encourages
individuals to adopt the relatively higher travel demands of the car owning segment
of the population. For a selection of countries and the EU15 as a whole, Figure
3.10 shows how the number of cars per head of the population has increased
between 1970 and 1995. Evidence from the UK (for example, see Chapter 6 of
Potter, 1997) suggests that the number of journeys made by a household increases
substantially when a car is acquired and some existing journeys transfer from other
modes to the car. Figures 3.11 and 3.12 provide some support for this view.
Figure 3.10 - Cars per 1000 inhabitants in selected EU15 countries and the USA,
1970-95
700
Cars per 1000 inhabitants
600
500
400
France
Germany
Netherlands
Spain
UK
EU15
USA
300
200
100
0
1970
1975
1980
1985
1990
1995
Source: EU transport in figures, statistical pocket book, 2nd Issue, 1997 (EUROSTAT, 1997a)
(iv)Cars have captured a greater share of all the trips that are made - because the
cost-effectiveness of car travel has improved relatively more quickly than that of
other modes (except air).
Data from the UK (Department of the
Environment,1996) shows that over the 20 years from 1974, motoring costs were
almost unchanged in real terms, while bus and rail fares increased by 55% and 71%
respectively, which was somewhat higher than the growth in disposable incomes of
51%. This is shown in figure 3.13.
Review of transport trends across Europe
3.13
Figure 3.11 – Total journeys per person, per year for households with and
without access to a car and by person type for the UK, 1995/97
All
households
No car
With car,
non-driver
With car,
other driver
1400
1200
1000
800
600
400
200
0
With car,
main driver
Journeys per year
Journeys per person by household type and by
person type
Source: Office for National Statistics (www.ons.gov.uk), Social Trends Data Set, On-Line Statistics
(www.statistics.gov.uk/statbase/datasets.asp)
Figure 3.12 – Modal share of journeys per person, per year for households with
and without access to a car and by person type for the UK, 1995/97
Modal share of journeys per person by household
type and by person type
100%
90%
80%
70%
Other
30%
Local bus
20%
Walk
10%
Car
0%
All
households
40%
No car
Bicycle
With car,
non-driver
50%
With car,
other driver
Motorcycle
With car,
main driver
60%
Source: Office for National Statistics (www.ons.gov.uk), Social Trends Data Set, On-Line Statistics
(www.statistics.gov.uk/statbase/datasets.asp)
3.14
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.13 – Real changes in the cost of transport in the UK, 1970-94
180
Index (1974 = 100)
160
Rail fares
140
Bus fares
120
Disposable income
All motoring
100
Petrol/Oil
80
60
1970 1974 1978 1982 1986 1990 1994
Source: Indicators of Sustainable Development for the United Kingdom, Indicator b3 (Department of the
Environment, 1996)
(v)People now tend to make longer trips due to the improved cost effectiveness of
travel, especially by car. This has been a significant source of growth since
average trip lengths for car drivers have increased by 12% to 13.5 kms over the 20
years to 1995 (DETR, 1997a), This growth is due both to lower car operating costs
and to higher average road speeds due to the greater availability of and the more
intensive use of the motorways and the high quality inter-urban primary road
network. Other modes have improved their generalised costs more slowly, if at all.
(vi)People are likely to travel further due to the increased average income of
individuals. Analysis of national travel surveys indicates that, across the EU, the
average length per trip increases in a pronounced fashion as a function of the
income of an individual. The relative damping effect of the monetary cost of travel
becomes less important as incomes increase.
(vii)People make longer trips because of the population shift away from dense urban
areas. This increase in demand results from the migration of households and jobs
to areas which are less congested for cars. The scale and nature of the impact of
these land use changes on magnifying the growth in car travel is discussed in more
detail below.
(viii)Car occupancy levels are lower the increase in car ownership has lessened the
average number of occupants per car kilometre travelled, from 1.73 in 1975 to 1.62
in 1995 according to the UK NTS (DETR, 1997a), so that the same number of
Review of transport trends across Europe
3.15
person journeys in car would now generate 7% more vehicles to make these
journeys
Land use impacts on transport demand
Land use changes have had a significant impact on facilitating and encouraging the
increase in the demand for car travel over the last 25 years. During this time there has
been implicit traffic demand management in the denser urban areas through rationing
by congestion.
The primary impact of rationing by congestion has been clear cut. There has been a
major switch in population patterns away from congested urban areas where cars are
awkward/costly to keep and run, into areas where cars are easy to park and have fast
speeds. Urban road congestion has certainly not been the sole cause of population
decentralisation but it certainly acts as a major contributory factor. The empirical
evidence for the UK is as follows:
(a)
The population has been migrating consistently from the most urbanised
towards the least urbanised areas. For example, Champion et al (1998) report
that over the period 1981-94 the six metropolitan counties and Greater London
together recorded a net loss of nearly 1.5 million people to the rest of the UK.
Champion and Atkins (1996) also provide evidence of a ‘counter-urbanisation
cascade’. There is, however, some evidence that this trend has been slowing
down in recent years and even reversing in such highly urban areas as inner
London.
(b)
Total travel distance per person increases systematically with decreasing
settlement size. Averaged over all modes, residents in small urban areas travel
40% further than those in major cities (Potter, 1997) - and furthermore are
much more likely to use a car for this travel. This disparity is growing strongly
through time. However, the number of trips per person is much more stable
across settlement sizes, it is primarily the average length of trips that differs
significantly between areas.
(c)
The increase through time in car mileage per person is greater for residents in
the medium to small urban areas than in towns of more than 250,000
population (Potter 1997).
(d)
The rate of growth in traffic has been lowest on roads in built-up areas which
have low free flow speeds and are most subject to congestion. Figure 3.14
shows how vehicle traffic has grown on different types of roads in the UK
between 1987 and 1997.
(e)
The rate of growth in traffic has been highest on motorway and on non-built up
trunk roads which have high free flow speeds and many of which are not
subject to regular congestion.
(f)
The net result of all of this has been that despite the undoubted build up of
traffic congestion in towns, the flow weighted average car speeds over the
3.16
D1: Identification of the key linkages between transport intensity and economic growth
whole road network are consistently increasing through time as shown by the
NTS (DETR, 1997a):
1975/76
21.7 mph
1985/86
22.5 mph
1989/91
23.1 mph
1993/95
23.5 mph
Figure 3.14 – Motor vehicle traffic growth on UK roads, 1987-97
450
350
300
Minor roads
250
Built up major roads
200
Non-Built up major roads
150
Motorways
100
1997
1995
1993
1991
0
1989
50
1987
Billion vehicle kilometres
400
Source: Transport Statistics Great Britain, 1998 Edition (DETR, 1998).
The explanation linking these phenomena is that people appear to respond to
increasing congestion by moving to avoid it if they can, rather than simply by
changing mode or by reducing the number of car trips. However the latter are the
mechanisms that have traditionally been employed in conventional transport models
and analysis. It is not surprising that forecasting in transport has not had the most
successful of histories.
People vote with their wheels - moving to live in areas with good access to a high
quality road network where they can travel easily and cheaply by car.
Review of transport trends across Europe
3.4
3.17
Past trends in freight transport
3.4.1 Past trends
In common with experience in the passenger transport sector, the dominant trend in
the freight transport sector has been the enormous growth in the importance of road
relative to other modes (recall Figures 3.2 and 3.4). Because of the dominance of
road, this section will focus largely on trends in road freight transport.
Figure 3.15 presents numerous statistics relating to the growth of road freight traffic
carried on heavy goods vehicles (HGVs) in the UK, together with an index of GDP.
Whereas the amount of goods lifted (measured in tonnes) has increased sporadically
and by only 12% in total over the last 22 years, goods moved (measured in tonnekilometres) have increased by around 70%, more rapid growth than was shown by
GDP over the same period. Average length of haul and vehicle kilometres have
increased by around 50% over the same period.
Figure 3.15 – Annual road goods vehicle kilometres travelled, tonnes-lifted,
average length of haul, tonne-kilometres and GDP in Great Britain, 1974-96
170
160
Index (1974 = 100)
150
140
Tonne-kilometres
GDP
Average length of haul
HGV vehicle-km
Tonnes lifted
130
120
110
100
90
80
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
Notes: The data includes UK registered operators and the UK leg of international journeys, carried out by foreign
registered hauliers. Source: National Road Traffic Forecasts (Great Britain) 1997 (DETR, 1997b) and UK
National Accounts (The Blue Book) 1997 (Office for National Statistics, 1997a).
The data presented in Figure 3.15 are for the UK. Figures 3.16a to 3.16d show similar
data for Belgium, the Netherlands, France and Germany. From 1970 to 1995 road
tonne-kilometres in the EU increased by 156% while the road tonnes lifted increased
at a much slower rate. For example, on French roads a reduction of 20% in tonnes
lifted was accompanied by an increase of 70% in tonne-kilometres moved.
Rothengatter and Szimba (2000) report that between 1965 and 1996 freight tonnekilometres increased by 376% in Spain and 273% in Italy.
3.18
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.16a – Annual road tonnes-lifted, average length of haul and tonnekilometres for Belgium, 1970-93
275
250
Index (1970 = 100)
225
200
175
150
Tonne-kilometres - B
Average length of haul - B
Tonnes lifted - B
125
100
75
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
Figure 3.16b – Annual road tonnes-lifted, average length of haul and tonnekilometres for the Netherlands, 1970-93
275
250
Index (1970 = 100)
225
200
175
150
Tonne-kilometres - NL
Average length of haul - NL
Tonnes lifted - NL
125
100
75
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
Review of transport trends across Europe
3.19
Figure 3.16c – Annual road tonnes-lifted, average length of haul and tonnekilometres for France, 1970-93
275
250
Index (1970 = 100)
225
200
175
150
Average length of haul - F
Tonne-kilometres - F
Tonnes lifted - F
125
100
75
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
Figure 3.16d – Annual road tonnes-lifted, average length of haul and tonnekilometres for Germany, 1970-93
275
250
Index (1970 = 100)
225
200
175
150
Tonne-kilometres - D
Average length of haul - D
Tonnes lifted - D
125
100
75
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
3.20
D1: Identification of the key linkages between transport intensity and economic growth
A similar, though less pronounced, trend has also been evident for rail freight, as
shown in Figures 3.17a to 3.17d, for Belgium, the Netherlands, France and Italy. The
trends shown for Italy are slightly different from those apparent in the other countries.
Up to 1993, the average length of rail haul showed only a modest increased in Italy.
Indeed, after 1993 the average length of rail haul has actually decreased, while Italian
rail freight tonne-kilometres and tonnes-lifted have continued to increase. This may
be due to a consolidation of combined transport.
From 1970 to 1993 rail tonne kilometres in the EU as a whole decreased by 27%
while the rail tonnes lifted decreased at a much faster rate, by 41%. This created an
increase in the average length of rail haul of 24%. This analysis leads to the
following conclusion, which holds in the case of both road and rail freight. The vast
majority of past freight transport growth has arisen from increases in the length of
freight journeys, rather than from increases in the number of tonnes carried.
Figure 3.17a – Annual rail tonnes-lifted, average length of haul and tonnekilometres for Belgium, 1970-93
140
130
Index (1970 = 100)
120
110
100
90
Average length of haul - B
Tonne-kilometres - B
Tonnes lifted - B
80
70
60
50
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
3.4.2 Understanding the causes of past growth in freight transport
Superficial explanations of freight – and particularly road freight - transport demand
tend to concentrate on the link between GDP growth and freight transport. Higher
incomes mean greater demand for goods and thus a requirement for increased
movement of freight. A number of researchers have looked beyond this simple
explanation and attempted to examine firms’ logistical decision-making processes.
Review of transport trends across Europe
3.21
Figure 3.17b – Annual rail tonnes-lifted, average length of haul and tonnekilometres for the Netherlands, 1970-93
140
130
Index (1970 = 100)
120
110
100
90
Average length of haul - NL
Tonne-kilometres - NL
Tonnes lifted - NL
80
70
60
50
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
Figure 3.17c – Annual rail tonnes-lifted, average length of haul and tonnekilometres for France, 1970-93
140
130
Index (1970 = 100)
120
110
100
90
Average length of haul - F
Tonne-kilometres - F
Tonnes lifted - F
80
70
60
50
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
Source: International comparisons of transport statistics, 1970 – 1993 (UK Department of Transport, 1996).
Shows freight lifted and moved by national vehicles on national territory.
3.22
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.17d – Annual rail tonnes-lifted, average length of haul and tonnekilometres for Italy, 1970-93
Source: Ministero dei Trasporti e della Navigazione (1998) Conto Nazionale dei Trasporti. (In Italian: National
Transport Accounting System). Istituto Poligrafico e Zecca dello Stato, Roma.
Two such studies are the work by McKinnon and Woodburn (1993), and the
REDEFINE project (REDEFINE 1999). For the UK, McKinnon and Woodburn
examine the development of freight tonne-kilometres over the period between 1950
and 1990 (recall Figure 3.7). Tonne-kilometres can be disaggregated into tonneslifted and average length of haul.
Between 1950 and 1990, these two variables made a broadly equivalent contribution
to the overall growth in tonne-kilometres, though their relative contributions have
varied in importance through time. In the 1950s, the increase in tonnes-lifted was the
most important factor. During the 1960s, both tonnes-lifted and average length of
haul grew at a similar rate. In the 1970s tonnes-lifted declined, while average length
of haul grew substantially. In the 1980s both variables increased again, a trend that
has continued in the 1990s, leading to rapid overall growth in tonne-kilometres.
McKinnon and Woodburn argue that, for the UK at least, the spatial concentration of
economic activity has been the major cause of the observed changes in tonnekilometres and average length of haul. They identify a number of factors that have
encouraged this spatial concentration. Concentration of production/warehousing in
larger units can lead to savings through economies of scale in the manufacturing
process, warehouse construction and operation. It also allows firms to benefit from
the ‘square root’ law of inventory and substantially cut stock levels. These cost
savings have to be weighed against increased transport costs, as average length of haul
increases.
Review of transport trends across Europe
3.23
They go on to argue that changes in production and stockholding systems are probably
a response to falling transport costs and improved efficiency/accessibility created by
improvements in the (road) transport network. It is suggested that much of the growth
in average length of haul in the UK in the 1970s was due to development of the
motorway network during that period.
McKinnon and Woodburn note, however, that industrial concentration in the UK
seems to have continued despite the slowdown in improvements to the road transport
system. They argue that further impetus to the concentration process would have
come from the creation of the single European market and the deregulation of
international haulage.
The REDEFINE project recently studied the drivers of road freight traffic demand in
Europe. The project adopted a framework of analysis that is summarised in Figure
3.18. This shows the relationship between the value of goods produced and road
freight traffic demand as a series of key ratios. If each of these ratios were to remain
constant, road freight traffic demand would be perfectly correlated with changes in the
value of goods produced. In reality, each of the ratios can vary independently. The
project attempted to estimate changes in each of the key ratios through time and thus
establish what proportion of the growth in road freight is a function of economic
growth and what proportion is attributable to logistical changes.
REDEFINE found that, for each country studied, increases in the average length of
haul was the single most important contributor to increased road freight demand. For
some countries, this was accompanied by a significant increase in the modal share of
road freight. On average, this combination of factors resulted in around a 50%
increase in road tonne-kilometres over the period between 1985 and 1995. This was
at least double the increase in the weight of goods produced or imported. Use of
heavier vehicles was found to have gone some way toward offsetting the rise in tonnekilometres. Together with a reduction in empty running, this was found to have
limited the increase in vehicle-kilometres to around 30%, over this period.
The project went on to try and explain why the seven key ratios had changed over
time. A number of key logistical trends were identified, that could act as potential
drivers of changes in the key ratios. These were grouped into four types of decision
making in logistics and one concerned with product design. Their list of key logistical
trends and drivers for the period 1985 to 1995 was:
1. Restructuring of logistical systems
1.1. Spatial concentration of production (either through reduction in plant numbers
or increased plant specialisation)
1.2. Spatial concentration of inventory
1.3. Development of break-bulk/transhipment systems
1.4. Centralisation of sorting operation in hub-satellite network
3.24
D1: Identification of the key linkages between transport intensity and economic growth
Figure 3.18 – Linking economic activity and road freight traffic
Value of production
and imports
Value density
Weight of produced
and imported goods
Modal split
(road share)
Products transported
by road
Handling
factor
Vehicle carrying
capacity
Road tonneslifted
Average length
of haul
Load factor
Tonne-Kilometres
Average payload
Vehicle-Kilometres
Empty running
Aggregate
Key ratio
Source: REDEFINE (1999)
2. Realignment of supply chains
2.1. Vertical disintegration of production
2.2. Concentration of supplier sourcing
2.3. Wider geographical sourcing of supplies
2.4. Wider distribution of finished products
2.5. Increase in retailer’s control over supply chain
Review of transport trends across Europe
3.25
2.6. Concentration of international trade on hub ports
3. Rescheduling of product flow
3.1. Application of Just-in-Time principle in manufacturing
3.2. Adoption of Quick Response and ECR in retail distribution
3.3. Growth of ‘nominated day’ deliveries
3.4. Proliferation of booking-in/timed-delivery systems
4. Changes in management of transport resources
4.1. Improvement in road’s relative cost/performance
4.2. Increased use of outside transport/distribution contractors
4.3. Changes in vehicle size regulations
4.4. Changes in handling systems
4.5. Increased use of Computerised Vehicle Routing and Scheduling
4.6. Increase in return loading
5. Changes in product configuration/design
5.1. Increase in complexity/sophistication of product
REDEFINE examined the evidence relating to these key drivers through a number of
sector-specific case studies. The importance and relative strength of each driver was
found to vary between sectors and between countries. The project suggested that any
freight forecasting or policy appraisal exercise must take these differences into
account.
3.5
Future trends in passenger transport growth
This section describes in more detail the main factors that are likely to influence the
future level of the demand for transport. It focuses primarily on whether the pattern of
influence of each factor will continue in the same direction as in the past, or whether it
may impact rather differently on future demand.
3.5.1 Transport related influences on road passenger travel demand
It was shown in Figure 3.9 that even though the annual number of trips made per
person has grown only slowly, the annual distance travelled per person has risen
strongly over the past 20 years. High levels of growth in annual travel distances have
taken place in all EU countries over this period.
In the past, many factors acted together to encourage increased passenger travel by
road. Not all of these factors will necessarily be so important in the future. There are
3.26
D1: Identification of the key linkages between transport intensity and economic growth
four main groups of factors that create growth in the distance travelled per person, per
annum.
Cost reductions
The distance related costs of car travel have not increased in real terms over the last
twenty five years (recall Figure 3.13). This was the result of increased fuel efficiency,
coupled with unit fuel costs that have not increased greatly in real terms. This
occurred at a time when personal incomes have also risen substantially. Accordingly,
people have been increasingly able to pay the costs of longer travel on road.
Current environmental policy trends suggest that car operating costs are not going to
reduce significantly in the near future across the EU. They are more likely to increase.
Higher fuel prices will have a two-fold effect. In direct terms they will reduce the rate
of increase in car kilometres, since personal travel is price sensitive. In indirect terms
they will encourage people to purchase smaller vehicles and to look toward new
engine technologies that are more fuel efficient and less polluting, so that in the longer
term the environmental pressure on road transport may reduce.
Goodwin (1992), for example, suggests that a sustained real 10% increase in fuel price
can be expected to have the following short and long run effects:
-
a short run decrease in traffic of around 1.5% and a decrease in fuel
consumption of about 3% and
-
a longer run decrease in traffic of 3 to 5% and a decrease in petrol
consumption of 7% or more (due to the use of smaller, or more fuel efficient,
vehicles).
There is no guarantee that crude petroleum prices themselves will not increase rapidly
at some stage, as has often happened in the past. However one of the side effects of
the current environmental pressures around the world is that the demand for fuel
consumption may grow more slowly than in the past. This will cause downward,
rather than upward pressures on crude petroleum prices.
Increases in income
Those with higher incomes tend to travel furthest. Since it is expected that average
incomes in the EU will continue to increase in future years, not surprisingly, this
should increase the overall demand for travel. This increase will feed through to
travel by car in particular.
(a) the impact of the monetary cost of travel on deterring people from travelling long
distances becomes less powerful the greater the disposable income that a person
has available to pay these costs. The rise in incomes may offset some of the effects
of environmentally inspired increased taxation of car travel costs, since social
equity considerations for the relatively poor and those in rural areas, will put a limit
on the extent to which car costs can be increased.
Review of transport trends across Europe
3.27
(b)higher disposable incomes allow a greater number of people to own cars, and the
speed and flexibility of the service provided by a car encourages more of these
people to make the longer trips that may otherwise be inconvenient to carry out by
non-car modes.
Car availability
The future level of car ownership is not easy to predict accurately. Looking at the US,
the levels reached there are much greater than in even the most car-oriented parts of
the EU (recall Figure 3.10). However, levels in the US do appear to have stabilised at
this high plateau in recent years. Since the urban and social structures in the US are
very different to the EU, it is unlikely that car ownership here will attain US levels.
Most EU citizens (not those on the periphery) live in countries which have higher
overall populations densities than the United States. It is possibly even more important
that European countries have a tradition of more compact urban form. The reasons for
apparent differences in car ownership saturation levels between countries were
discussed in a background paper to the United Kingdom DETR 1997 National Road
Traffic Forecasts. The study identified a variety of factors, including public policy
issues such as a regime of strict vehicle tests, which appears to have restrained car
ownership in Japan. Assuming that there are no immediate policy changes, car
ownership rates are likely to continue to rise significantly in the EU for the immediate
future, with the growth in each country mainly influenced by the growth in average
incomes and by the level of car prices in real terms. This suggests that the most rapid
rises will be in the lower income countries, assuming encouragement of economic
cohesion continues within the EU.
Speed increases
The average travel time per trip has not increased significantly (Figure 3.9 and Table
3.2) over the years despite the significant increase in the average distance per trip.
This increase in average travel speeds is due to a combination of many factors:
(a) a switch to faster modes - due to increased levels of car availability a greater
proportion of all trips are by car but the mode car tends to have the lowest door-todoor times of all modes for short to medium distance trips, except perhaps to city
centres. This trend to higher car availability is likely to continue as explained
above.
(b)unit speed increases within a mode - unit speeds on most modes have tended to
increase due, for example, to the introduction of faster trains, and of a greater
number of high-speed motorways and dual carriageway roads, bus-only lanes, etc.
Such fast new services tend to capture a substantial part of the travel market.
(c) relatively more rapid growth in demand in the areas with the higher speeds average urban car speeds may indeed have decreased in the inner parts of many
large cities over the years. This is due to road congestion increasing in those cities
where investment in new road capacity has not kept pace with increased demand.
However, the growth in ex-urban and inter-urban car travel has been much more
rapid than that within the congested urban areas in which public transport still
provides a competitive alternative. The higher car speeds available outside the
3.28
D1: Identification of the key linkages between transport intensity and economic growth
urban areas and the associated higher level of car availability have encouraged
many firms and households to locate, either on the edge, or completely outside the
major urban centres and these land use effects have helped to create higher average
car travel speeds.
For a number of reasons it is far from certain that average road speeds will continue to
increase in the future at the same rate as they have done in the past.
Firstly, most of the EU countries (other than the four Cohesion Countries Spain,
Portugal, Ireland and Greece) have already gone a long way towards linking their
major cities together with a high speed motorway network, so that fast speeds are
already available for much of the travel to these cities. Further extensions to the
motorway network that occur in these countries are likely to connect areas of lower
populations and so will have proportionally less effect in terms of increasing overall
accessibility, and thus the overall passenger travel demand.
Secondly, continuing environmental pressures have reduced the political acceptability
in many countries of road building, hence the existing road system is likely to become
more congested for parts of the day, reducing the speed and reliability of the road
network and hence the demand for road travel. There will also be pressure through
the land use planning system to concentrate future population growth into urbanised
areas where public transport can compete with cars, rather than allowing unrestricted
out of town growth of commercial and residential building construction.
Thirdly, the lower levels of pollution emissions that occur when vehicles travel more
slowly may lead to future pressure to reduce speed limits for cars to 90 kms per hour.
This policy response has previously been used temporarily in some countries after the
oil shocks in the seventies and might reappear again in the future.
Fourthly, the trend in investment in passenger rail is towards faster and higher quality
trains so that longer distance trips by car will face increased competition from a rail
service offering the opportunity for businessmen to work as they travel. The big
question mark over the strength of the competition from rail is on the cost side.
Recent policies to reduce government spending in the lead up to European Monetary
Union have created pressure to reduce government subsidies for rail travel in some
countries. Current EU transport policy, however, strongly supports investment in rail
and encourages improvements in efficiency of operation to enable it to compete with
road for both passengers and freight.
As yet it is unclear whether the increased tariffs required to cover the costs of the
improved rail services will lessen rail’s ability to compete with car for non-business
travel, or in contrast whether the organisational changes and gradual privatisation of
rail activities encouraged by EU Directives will deliver improvements in costeffectiveness and quality of service that increase its ability to compete with car. It
should be noted, however, that even under the most optimistic scenario, rail will never
be in a position to compete with car for the majority of trips undertaken by the
population.
Review of transport trends across Europe
3.29
Drawing these trends together suggests that the contribution of car speed increases to
future growth on road travel is likely to be slight. In fact on balance it seems more
likely to act to reduce, rather than to increase, growth.
3.5.2 Substitutes for travel
For the last 25 years or more various telecommunication developments have been
hailed as possible agents that would reduce the need for travel. As yet these have only
had a small impact on travel demand. Video conferencing is certainly increasingly in
use, but as yet only has a very limited market.
The advent of the Internet gives more food for thought. Despite the fact that it has
been available for many years, its growth suddenly started to mushroom about 3 years
ago and very rapidly it achieved wide coverage of its potential market. This is the
style of new technological changes, they drift along, growing slowly for a long period,
and then all of a sudden they reach a critical mass and make a large leap forward
flooding the potential market. This makes it much more difficult to predict the scale
and timing of their impact.
Modern telecommunication innovations certainly have the potential to reduce the
demand for certain types of travel. The increasing availability and quality of service
of banking, shopping and other sales by phone and over the Internet will allow people
to avoid various trips to services. Home working has increased rapidly in some
industrial sectors, with an increasing number of staff working from home some days
and from the office the rest of the week. These initiatives will certainly act as a
stimulus to reduce the need to travel somewhat. Whether in practice this just means
that people will use the time saved to increase their travel on other trip purposes
remains to be seen.
3.6
Future trends in freight transport growth
The future determinants of growth trends in the demand for freight transport closely
parallel those of passengers that were discussed in the previous section.
Population growth is only likely to play a minor role in generating growth in overall
demand, though population growth will not be evenly distributed among the regions
of the EU, so that in some areas it will be of importance.
Economic growth is the primary stimulus for increased freight demand. It will act
predominantly through diversification of industry, and increased international trade,
rather than from major increases in tonnes lifted. The expected continued change in
the composition of the goods transported, towards a higher proportion of high value
finished goods, and towards more specialisation of production due to the greater range
of goods being consumed, are both likely to support a continuing increase in the
average length of haul. These trends will continue to be reinforced by the process of
EU integration and expansion.
Considering the predominant mode, road freight, the fuel component of operating
costs is more likely to increase, for the environmental reasons discussed previously,
than to decrease in the future. This may be complemented or replaced by the
3.30
D1: Identification of the key linkages between transport intensity and economic growth
introduction of HGV charging in the future. The financial/capital costs and the
administrative costs of road haulage seem likely to stay stable or perhaps decrease a
little in real terms due to increased computerisation of information and to more
efficient use of vehicles of a more efficient size. The labour costs are likely to
increase more or less in line with the increase in GDP. Accordingly, in the absence of
any major new developments it appears that overall truck operating cost functions are
likely to remain reasonably close to current levels in the future, or perhaps even to
increase somewhat.
There is likely to be pressure on rail companies to cover a higher proportion of the full
costs of rail freight than in the past. Ideally this could be achieved or even exceeded
by the efficiencies achieved through more efficient operation of the rail freight system,
both through privatisation of selected operations, and through continuing to focus on
the markets in which rail can compete most effectively. Thus there are some grounds
for believing that rail freight tariffs could reduce significantly in some key markets.
However, whether they actually reduce in practice will depend on institutional
changes that to date have not proved easy to achieve in the rail systems in a number of
EU countries. However, even if there are significant reductions in the future operating
costs of rail and inland waterway freight, these will not effectively compete with road
freight for the majority of shorter distance, or small irregular shipments so that their
impact on overall road freight growth will at most be partial.
For similar reasons as the case for passenger travel, there are not strong grounds for
believing that effective road freight speeds will increase in the future at the rate that
they have in the past. Already in the UK more than 75% of road freight traffic travels
on the fast primary network due, in part, to firms organising their locations to be
adjacent to this network. Overall, other than in the Cohesion Countries, much of the
trucking industry already has reasonably good access to a road system with a high
enough level of service to allow trucks to travel at their desired/legal speed. Future
speed gains in these countries will therefore be limited.
The pressures against road construction, coupled with continuing growth in demand,
is likely to increase the likelihood of road haulage firms suffering from congestion.
While reorganisation of the timing of truck movements can in the short term reduce
some of the effects of the predictable congestion, that occurs in the peaks close to
major urban areas, there are limits to the degree of reorganisation that can be achieved
before the vehicles cease to be used fully and efficiently. In summary, future trends in
road speeds seem more likely to increase than to decrease the operating costs of
trucks.
The continuing trend towards an increasing proportion of lighter, higher valued goods
moved within the EU economy as a whole means that the responsiveness to transport
cost increases should lessen, rather than increase, in the future. It should also mean
that the number of vehicles required to transport a given number of tonnes will not
necessarily decrease, even if maximum vehicle loads are allowed to increase.
In summary, it seems likely that the economic forces that drive freight transport
demand will continue in the future at a similar rate to the past. In contrast, the
influence of supply factors will be much less clear cut than in the past. Various
components of operating costs are as likely to increase as to decrease. Accordingly,
Review of transport trends across Europe
3.31
the overall rate of growth in freight traffic is likely to increase rather more slowly than
has been the experience in the past in the EU.
Experience of de-coupling output from economic growth in other sectors
4.1
4. Experience of de-coupling output from economic
growth in other sectors
In chapter 3 it was shown that, over recent decades, there has been a close correlation
between economic growth and growth in transport in the EU. This phenomenon
occurred in the past also in other sectors. But there are examples in a couple of sectors
where this development changed and a de-coupling of output from economic growth
took place. Based on the analysis of an appropriate example, this chapter will go on to
look at the implications for a de-coupling strategy for the transport sector. A good
example is the development of energy consumption and CO2 emissions. Both were
closely linked to economic development in the past, but have more recently show
evidence of de-coupling for some decades. The energy and transport sectors are not,
of course, totally independent because transport is, itself, a user of energy. Transport
growth has also, therefore, had some impact on energy intensity.
In the first part of this chapter (4.1) a detailed analysis shows the development of the
last 20 to 30 years. The objective is to evaluate:
–
what does de-coupling in the energy sector mean;
–
if there was a de-coupling in all parts of the energy sector;
–
which developments were responsible for the de-coupling and
–
what effects on economic development resulted from the de-coupling?
The objective of the second part of this chapter (4.2) is to find implications for the
transport sector based on the experiences in the energy sector. Though these sectors
show large differences there are also parallels in many points of the development and
the way energy and transport products (i.e. mobility) are used as inputs in the
economy. Against this background some initial conclusions will be drawn for how to
develop a de-coupling strategy for the transport sector.
4.1
Review of experience from other sectors
Energy is an essential factor for nearly all sectors for the production of goods and
services. In the past the availability of energy and technologies for the use of different
sources of energy were very important for economic development. For example the
industrial revolution in the 18th century was inseparably combined with the usage of
coal in steam engines and burgeoning economic growth after World War II depended
on the availability of crude oil (Brune, 1999). Until the 1970s it was more or less
common sense that economic growth depends on an at least equal growth of energy
consumption, a de-coupling was unimaginable. Nevertheless the last 25 years showed
exactly this development. The following explanation of this process exists in two
parts.
In a first step (4.1.1) the development is analysed from the angle of the entire
economy. Within this not only the final energy consumption is taken into
4.2
D1: Identification of the key linkages between transport intensity and economic growth
consideration but also the development of electricity consumption and CO2
emissions. This will be followed (4.1.2) by an analysis by sector (industry, transport,
tertiary/domestic) with some examples to point out the specific developments.
4.1.1 Energy consumption and economic development
From World War II to the first oil crisis in 1973 energy consumption grew in line with
the economy in the most European countries. Coal was the most important source of
energy directly after the war. During the following decades oil became more and more
important. Accordingly the decision of the OPEC to slow down production and to
raise the price for crude oil from 3 $/bl to 12 $/bl in winter 1973 had serious effects on
the industrialised countries (Peake, 1994).
Far more important than the oil price shock and its economic consequences was the
acknowledgement that supply of the essential production factor energy was no longer
seen to be safe. Furthermore the publication of the Club of Rome’s ‘Limits of Growth’
(Meadows, 1972) received much attention. It deals with the finite nature of natural
resources. According to this perception – the uncertainty of energy supply in the short
term as well as in the long term – society, business and policy came to the opinion that
economic growth might come to an end. The economic shock resulting from the oil
crisis was – compared to the repercussion – far exceeded by the psychological shock.
Therefore the oil crisis triggered the de-coupling of energy consumption and economic
growth (see Figure 4.1). While the economy grew by more than 75% since 1973,
energy consumption increased only by about 15%. The energy intensity decreased
until today to only 2/3 of the value in 1973. As a consequence of the first price shock
in 1973 and the second one at the beginning of the 1980s energy consumption
decreased and - in the short term - economies stagnated. In the short run the economic
impacts of the enormous price increase were significantly negative.
As mentioned before, the oil crisis was just the trigger for the de-coupling. The
reasons were manifold and can be categorised as follows:
–
policy measures (see below);
–
energy costs;
–
technological progress;
–
economic structural change and
–
changes in behaviour.
Experience of de-coupling output from economic growth in other sectors
4.3
Figure 4.1 - Primary energy consumption and GDP in the EU15, 1970-94
200
GDP [bil. EURO, const. prices]
180
PEC [PJ]
160
Energy Intensity [MJ / EURO]
140
120
100
80
60
1970
1975
1980
1985
1990
1995
Indices 1970 = 100
Sources: EUROSTAT, OECD, Prognos
prognos 2000
As a direct outcome of the oil crisis the energy related questions got more and more
important in politics. The first two points of the following listing of policy action
fields mainly have been relevant in the 1970s and 1980s while the last two are still on
the agenda of today’s energy policy.
–
International co-operation had been implemented between the industrialised
countries in order to co-ordinate oil policy and to install an energy reserve
management system.
–
Intensification and diversification of indigenous energy supply in order to
lower the degree of import dependency. These measures included subsidies to
unprofitable coal mines, and oil exploration especially in the North Sea was
taken up. Another focus was on the development of nuclear power utilities and
CHP-plants.
–
Contemplating the structure of energy demand with research programmes in
order to examine the reasons for energy consumption and to identify
possibilities to reduce energy demand.
–
Energy Conservation Programmes were and still are taken up to encourage
the economical use of energy. In the 1970s such programmes were driven by
uncertainties concerning the energy supply. Later environment protection
(mainly aspects like air pollution) and nowadays the danger of climate change
are the main reasons for promoting efficient and economical energy usage.
4.4
D1: Identification of the key linkages between transport intensity and economic growth
Energy policy can be divided into three main groups of measures:
–
Information programmes: (audits, labelling, technical guidance, training)
–
Financial measures: (e.g. grants for insulation, Eco-taxes, tax incentives for
energy efficient investments)
–
Regulations (technical standards for buildings or appliances)
The goal of these measures is to reduce energy consumption or to increase the
efficiency of energy usage. It is not the aim to restrict the consumption of usable
energy but the decrease of energy input for the generation of the usable energy.
So, the analysis mainly concentrates on the primary energy consumption but also takes
a look at the final energy consumption. It does not deal with usable energy.
Not only the governments showed reactions after the oil crisis but also business and
population. As a consequence of the oil price shocks energy was no longer seen only
as an important production factor but also as a significant cost factor. Therefore
business was interested to decrease the energy input for the production. Analyses were
made in order to identify potential for energy savings in production. Besides
organisational improvements mainly technological progress accelerated.
Increasing energy costs since the seventies were not the only reason for the decrease of
energy intensity of production. Furthermore, environmental policy not directly
concerned with energy consumption had an influence on efficiency. For example
measures which intended a reduction of air pollution lead to an earlier replacement of
old technology by new, cleaner and more energy efficient equipment. As a result
energy efficiency of production increased significantly.
Drawn to the economy as a whole also structural change in the economy had and still
has a positive influence on energy consumption measured in a proportion of GDP. As
industrial production is more energy intensive than production of services, a decrease
of total energy intensity is a result of an increasing share of services in the economy.
But also within the manufacturing sector there is a higher increase of high value
products while production of energy intensive products like steel stagnate or even
decrease.
Also for private households the relevance of energy costs grew. Besides this
environmental aspects became more important because of the partially enormous air
pollution. The options for energy savings by households are mainly found in heating
of buildings. With measures like heat measurement systems or insulation as well as
fuel switch from coal to natural gas or oil significant savings were made. Especially
during the 1970s and 1980s the motivation of the population to save energy was very
high, nevertheless renunciation behaviour was found only directly after the first oil
crisis (Traffic Free Sundays etc.).
Looking at final energy consumption for example for heating, in principle there are
two possibilities to reduce energy input. Firstly, energy efficiency can be increased by
installing a new heater or by insulation measures which are correlated with costs.
Secondly, people can reduce the temperature in their houses which, from the
Experience of de-coupling output from economic growth in other sectors
4.5
economic point of view, leads to a decrease of welfare. But this decrease is not
accounted within the concept of national accounts, so that GDP is not influenced by
this measure. Therefore in this case energy efficiency related to GDP would increase
though no improvements have been made. This shows the restriction of the concept of
GDP as the base for measuring energy efficiency.
This example demonstrates the importance of a clear definition of what should be decoupled from what. Today, the objective of de-coupling energy input is mainly to
reduce resource consumption, environmental loads and with rising priority to reduce
climate change effects. The consumption of usable energy, for example living in
heated rooms, is not in the centre of discussions. One main objective concerning
climate change is to reduce CO2 emissions and not primarily to reduce energy
consumption.
Therefore a de-coupling of CO2 emissions from economic growth can be achieved by
a change in the structure of the consumed sources of energy, which give more weight
to those with lower carbon density per energy unit. This is the reason why CO2
intensity decreased faster than energy intensity in the EU (Figure 4.2). While coal
(carbon intensive) and oil were substituted by natural gas, additionally CO2-free
electricity production with nuclear power was set up during the last decades.
Figure 4.2 - Energy consumption, electricity consumption, CO2 emissions and
GDP in the EU15, 1985-97
140
130
120
110
100
90
GDP [bil EURO, const. Prices]
Gross Energy Consumption [PJ]
80
CO2-Emissions [mil t]
70
Final Electricity Consumption [PJ]
60
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
Indices 1985 = 100
Sources: EC, Prognos
prognos 2000
4.6
D1: Identification of the key linkages between transport intensity and economic growth
Looking at electricity consumption a different development has to be noted. There is
no sign of de-coupling from economic growth in recent years. Technological progress
(e.g. IT), economic structural change and increasing welfare lead to a comparatively
high growth of consumption of electricity.
As a first result of this analysis, concerning the transport sector, two important points
should be kept in mind:
–
It has to be clearly defined what impact, of an input or output, is being targeted
in seeking to de-couple the input or output of a sector from economic growth.
–
If measures are taken for de-coupling input from GDP, it has to be assessed
whether effects occur that are not measured within the concept of GDP. If as a
result of a measure losses of welfare arise, it is possible that de-coupling is not
really successful because no improvements of efficiency compared to welfare
are made.
4.1.2 Developments by sector
In the following the reasons for de-coupling energy consumption will be analysed not
for the economy as a whole but on a sector level. It will be shown which development
of the sectors contributed to the increase of efficiency. First energy intensity by sector
related to GDP is shortly discussed, thereafter three examples will be presented. These
examples are related to developments in Germany only, but are in principal valid for
all countries in the EU.
The development of energy intensity by sector is significantly different for industry,
transport and the tertiary/domestic sector (Figure 4.3). In the industry sector intensity
decreased comparatively steadily because of increasing efficiency of production
technologies. Furthermore the intra-industrial structural changes had a positive effect.
In the sector tertiary/domestic energy intensity also decreased significantly. The main
reasons for this development were improvements of the efficiency of heating systems
and building insulation. The fluctuations of energy intensity result from changing
climate conditions.
In the transport sector a reverse development must be noted. During the last 15 years
energy consumption for transport has grown even faster than the economy. The
reasons for this are on the one hand the sizeable increase of transport and on the other
hand the relatively low efficiency increase (see below). From the energy policy point
of view the transport sector has a lot of catching up to make it’s contribution to
decreasing energy intensity.
Figure 4.4 shows the development of steel production and related energy consumption
in Germany (Prognos/EWI, 1999). Since 1980 the comparatively energy intensive
production of steel in Germany decreased by more than 10% while industrial
production in total increased significantly.
Experience of de-coupling output from economic growth in other sectors
4.7
Figure 4.3 - Energy intensities by sector in the EU15, 1985-97
120
110
100
90
80
Industry [MJ / EURO GDP]
70
Transport [MJ / EURO GDP]
Tertiary/Domestic [MJ / EURO GDP]
60
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
Index 1985 = 100
Sources: EC, Prognos
prognos 2000
Figure 4.4 - Energy intensity of steel production in Western Germany, 1980-94
105
100
95
90
85
80
75
70
Production [mil EURO, const. Prices]
Energy consumption [PJ]
65
Energy Intensity [MJ / EURO]
60
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
Indices 1980 = 100
Sources: German Statistical Office , Prognos
prognos 2000
4.8
D1: Identification of the key linkages between transport intensity and economic growth
One reason was that subsidies for steel production in Germany were reduced.
Additionally energy efficiency also increased strongly because of technical
improvements of oxygen steel mills and because of a switch to electrical steel
production. An advantage of electrical steel production is that a higher ratio of scrap
can be used in production which lowers the energy demand. In this case energy saving
policy made profit of other policy areas, especially of the financial policy and the
environment policy postulating more scrap recycling.
A quite different situation is shown in figure 4.5, an example showing the energy
consumption of electrical appliances in the household sector. The number of
dishwashers in use tripled in the last 20 years in Germany because of higher income
and (relatively) decreasing prices for these appliances. Though average energy
efficiency increased by about 100%, energy consumption grew significantly.
Obviously dishwashers have a comparatively high – non-monetary - benefit for
households although energy consumption for cleaning the dishes is usually higher
when dishwashers are used. This shows that prosperity improvements sometimes lead
to changes in behaviour with increasing energy consumption as a consequence.
Considering the concept of energy intensity related to GDP it is important to note that
under ceteris paribus conditions the usage of dishwashers leads to increasing energy
intensity because the usage of these appliances has almost no effect on GDP but does
increase energy consumption. Nevertheless relating energy intensity to welfare, there
would be no effect because increasing energy consumption comes with increasing
welfare.
Figure 4.5 - Energy consumption of dishwashers in Western Germany, 1980-98
300
Dishw asher [1000]
250
Energy Consumption [TJ]
Energy intenisty [MJ / Dishw asher *a]
200
150
100
50
0
1980
1985
1990
1995
Indices 1980 = 100
Sources: German Statistical Office, Prognos
prognos 2000
Experience of de-coupling output from economic growth in other sectors
4.9
The energy consumption of freight transport increased by about 100% whilst that of
passenger transport increased by 50% over the last 20 years in Germany. While energy
efficiency in freight transport increased by about 20%, mainly because of a structural
change from light to heavy duty vehicles, there was almost no change in the efficiency
of passenger cars. Technical progress lead to improvements of the cars, though these
were mainly related to safety and convenience. Improvement of motor efficiency and
air resistance were compensated by the trend to bigger and heavier cars with more
appliances on board (e.g. air-condition). The simple benefit of a car – being able to
move from point A to point B at any time at relatively low variable costs – is
obviously supplemented by benefits of e.g. convenience during the trip. Again these
benefits are not represented within measured GDP as they have only non-monetary
benefits for the consumers.
Figure 4.6 - Energy consumption and energy intensity of road transport in
Germany, 1980-94
200
Freight Energy Consumption [PJ]
180
Freight Energy Intensity [MJ / tkm]
Passenger Energy Consumption [PJ]
160
Passenger Energy Intensity [MJ / Pkm]
140
120
100
80
60
1980
1985
1990
1995
Indices 1980 = 100
Sources: German Statistical Office, DIW, Prognos
prognos 2000
The examples above show that the developments within the energy sector are very
heterogeneous. In particular, they show that the transport element of energy use has
modified the overall improvement in energy intensity because increases in efficiency
have been more than cancelled out by increases in distance travelled and also changes
in vehicle design for passengers.
In order to develop a strategy for de-coupling transport growth, analyses on a detailed
level are necessary. Besides transport policy also other policy fields have to be
assessed with regard to their impacts on transport development. In the end it should be
kept in mind that increasing prosperity may have a positive impact on growth in
energy consumption. But to this additional consumption often positive benefits are
4.10
D1: Identification of the key linkages between transport intensity and economic growth
related that are not accounted within the concept of GDP. Nevertheless they may be
important for the welfare of society.
4.2
Implications for the Transport Sector
Between the energy sector and transport significant differences exist, nevertheless
some developments leading to a de-coupling of energy consumption can have parallels
in the transport sector. Both energy and transport are derived demands in the sense
that they are needed to provide more basic needs, e.g. heat and lighting in case of
energy or access to work or shops in case of transport.
The situation of transport growth is comparable with the situation of energy demand at
the beginning of the 1970s. It is hard to imagine that transport demand can be decoupled from economic growth as time series analysis show no evidence of such a
trend. In the energy sector an external shock (oil crisis) was the trigger for increasing
efficiency and reducing demand growth. As the transport sector has almost no
international influences a shock from outside the economies cannot be expected. A
psychological shock like the one of the oil crisis leading to a willingness to save
energy all over society is not expected to appear under these circumstances for the
transport sector – unless the potentially adverse consequences of climate change can
be considered as such a shock.
Nevertheless some projections of transport development show tendencies of decoupling transport demand from economic growth. For example the European Union
Energy Outlook to 2020 (European Commission, 1999) forecasts that the transport
intensity of passenger and freight transport will decrease in the next two decades. For
passenger transport the main reasons mentioned are a limitation of the growth in the
average speed of transportation combined with a constant mobility time budget and
restrictions on, for example, inner city travel. For freight transport the main reason for
de-coupling is seen in the structural change of economic activity. Industrial production
will increase more slowly compared to services leading to a decrease of physical
transport demand.
In opposition to this view other authors (Rommerskirchen, 1998) forecast that e.g.
freight transport intensity (related to GDP) stagnated or even increased during the last
two decades though economic structure changed significantly. Consequently they
argue that there is no evidence for a change of this development in the next two
decades with an ongoing structural change of economy. However, it is common sense
that efficient measures have to be implemented in order to reduce transport intensity
and the related negative impacts of transportation.
The first step in developing a strategy for de-coupling transport growth is to evaluate
the benefits of transport. The principal benefit is the accessibility of products in the
widest sense. For passenger transport the product is mobility, for example ‘visiting
friends’ or ‘accessing work’ etc. To a large extent the benefits of mobility are not
accounted for within the concept of GDP. Here the difficulties shown in the example
of dishwashers would occur reducing this consumption. Additionally positive indirect
Experience of de-coupling output from economic growth in other sectors
4.11
effects related to passenger transport would have to be mentioned like the (monetary)
benefits of tourism.
On the other hand freight transport is necessary for the exchange of goods and
services. Looking at economic development over recent decades it has to be
recognised that foreign trade grew significantly faster than GDP, one indicator for the
general trend of globalisation. Economic growth depends to a large extent on an
increasing division of work at the international as well as at the national level. Against
this background, reducing trade between regions might have negative impacts on
economic development. As trade is usually directly related to transport of goods, at
this stage there seems to be no way out unless economic structural change leads to
significantly less transport intensive products.
Regarding this issue there is a parallel to the energy sector, because energy also is a
essential factor for production. In the case of energy not the consumption of usable
energy was the objective of de-coupling but the primary energy consumption. On a
more sophisticated level this differentiation is also possible for the transport sector.
One concept is the differentiation between gross and net mass movements that is
comparable with primary and final energy consumption. Beside problems resulting
from weakness of transport statistics (the statistical bases of transport in this
differentiation is very poor and very complicated), differences between energy and
transportation in this context are in a physical manner. While it is possible for
example to reduce the primary energy input for heating (usable energy) by insulation
of houses, it is more complicated for physical reasons to reduce significantly gross
mass movements of car travel.
A next important task is to define which impacts of transport should be de-coupled.
As shown above transport is essential for economic growth, a simple reduction would
not be sufficient. The negative impacts, for example environmental loads, have to be
matched with a certain quantity. On this basis measures could be implemented to
increase the efficiency of transport. But as in the energy case, detailed analyses of the
implications and repercussions of any measures have to be carried out.
Finally transportation has to be evaluated whether it is superfluous or not and whether
measures taken in other policy fields lead to a creation of transport demand.
Especially this point seems to be important at the European level as, for example,
regional policy often intends to strengthen external trade of the regions.
Summarising this chapter the following table shows the implications from the energy
sector for the development of a de-coupling strategy for the transport sector:
4.12
D1: Identification of the key linkages between transport intensity and economic growth
Table 4.1 – Implications for transport sector de-coupling, drawn from the energy
sector
Energy sector
1.
Analysis of benefits of consumption
─
Essential production input
2.
Definition of input/output to be de-coupled
─
Primary energy consumption, CO2 emission
3.
Increasing efficiency
─
Technological progress
Transport sector
─
Accessibility
─
Transport performance, net mass transport
─
Technological, e.g.
decreasing fuel consumption per vehicle km
─
Organisational, e.g.
increasing load factors
spreading of peak demand of infrastructure use
4.
Technology switch
─
Substitution of oxygen steel mills by electrical steel ─
mills
5.
Decreasing of demand
─
Change in economic structure
Substitution of private car travel by public
transport
─
Substitution of physical transport by electronic
transport
─
Change in economic structure to less transport
intensive products
─
Considering transport questions in all political
fields e.g. EC regional policy, land use policy
prognos 2000
Conclusions
5.1
5. Conclusions
5.1
Transport and economic activity
This report has been concerned with the linkages between transport and economic
activity. In most western European countries, a close correlation has existed between
the rate of growth of economic activity and growth in transport of both people and
goods. Transport and economic activity are interrelated; economic activity can
influence the demand for transport but, at the same time, changes in the transport
system can also influence economic activity.
5.2
Transport trends
Reviewing recent transport trends across Europe, the most important points to note are
that:
-
growth in passenger car travel has been far more rapid than that in other
surface modes and has also outpaced the rate of growth of economic activity;
-
the main growth in car travel has not been in congested city centres but in the
less congested outer suburbs and the surrounding areas outside cities – areas in
which public transport is currently unable to compete cost effectively with the
car;
-
the major proportion of past passenger travel growth across all modes has
arisen from increases in the length of trips rather than in the overall number of
trips;
-
the quantity of freight moved by road has grown far more rapidly than that
moved by other modes and has also outpaced the rate of growth of economic
activity and
-
increases in the average length of haul have been the predominant source of
growth in freight tonne-kilometres in recent decades.
The main factors that have encouraged the observed growth in car travel can be
summarised under the following headings:
Changes in relative costs
The costs of travel by private car have tended to be fall, over time, relative to the costs
of travel by other surface modes.
Increased incomes
Increased income levels have encouraged people to travel further and by more
luxurious modes of transport. They have also increased the demand for goods and
services, including leisure, which has also contributed to an increase in the movement
of people and goods.
5.2
D1: Identification of the key linkages between transport intensity and economic growth
Increased car availability
Partly as a response to increases in income and falling relative costs of motoring, car
ownership levels have increased. Evidence suggests that the number of journey made
by a household increases substantially when a car is acquired and some existing
journeys transfer from other modes to the car.
Increased speeds
Improvements in both vehicle and infrastructure technology together with improved
transport networks have served to substantially increase travel speeds. This has
enabled people and goods to travel further without increasing the amount of time
spent travelling. The cost effectiveness of car travel has increased more rapidly than
that of other surface modes.
Land use effects including changes in migration and commuting patterns
In many countries the population has been migrating consistently from the most to the
least urbanised areas. Travel distances per person increase with decreasing settlement
size and it is also more likely, as settlement size decreases, that a car will be used for
this travel. As population patterns become more diffuse it becomes increasingly
difficult for areas to be efficiently served by public transport.
Turning to freight transport, as well as the changes in relative costs and the effect of
increased incomes noted above, the following factors have also contributed to the
observed growth of road freight transport.
Changes in commodity structure
Economic change within industrialised economies has meant that bulk commodities
such as coal, iron and steel have become less important relative to ‘emerging
commodities’ such as manufactured goods, machinery foods and chemicals. The
characteristics of the transport requirements of these ‘emerging commodities’ have
tended to favour road over other modes of freight transport.
European integration and globalisation
The ongoing process of European integration and globalisation has increased both the
volume and the distance covered of trade between EU countries and between EU
countries and the rest of the world. Road has gained a higher proportion of this
increased trade than other freight modes.
Changes in the operational behaviour of companies
Modern production techniques have led firms to seek to reduce their stock levels,
shorten turn around times and generally improve their flexibility to react quickly to the
needs of the market. The most well-known example is Just-in-Time production. Such
an approach requires a quick, reliable and highly flexible transport service of the type
which only road can currently provide.
Conclusions
5.3
Application of advanced information and communication technologies (ICT)
Application of ICT has improved the efficiency and reliability of freight transport.
Since ICT has, to date, predominantly been introduced in the roads sector, road freight
has gained a further competitive advantage against other modes.
5.3
The de-coupling debate
To date there is little evidence to suggest that the growth of transport demand has been
or ever can be separated or ‘de-coupled’ from the rate of economic growth.
Moreover, in some countries certain types of transport have historically grown at a
much faster rate than that of the economy in general. De-coupling can be said to have
occurred in some other sectors of the economy. For example, taking the energy sector
as a whole, it can be seen that the energy intensity of the EU economy has been
systematically decreasing since at least the mid-1970s. Within the energy sector, the
experience of individual sub-sectors has, however, been more varied.
Though significant differences exist between the transport and energy sectors, there
may be some lessons that can be drawn from experience gained in the energy sector.
De-coupling there occurred chiefly as a result of:
-
sometimes sharp increases in the cost of primary energy inputs;
-
economic restructuring, leading to a relative decline in the economic
importance of high energy using industries and
-
regulation, driven by environmental pressures.
The response to these pressures and trends, by both households and firms, was to seek
more energy efficient ways of meeting their own needs in terms of consumption or
production. Firms also responded to regulatory and environmental pressures by
switching to ‘cleaner’ energy producing or using technologies. Should the political
will exist, there is no reason why similar pressures could not be applied in the
transport sector.
The problem is that transport is different. To begin with, it is not straightforward to
define exactly which transport ‘outputs’ should be de-coupled from economic growth.
After all, the ability to travel easily and cheaply is essentially an economic benefit to
individuals and firms. Should policy therefore be concerned to minimise travel only
by private car and for leisure purposes, for example? Alternatively, perhaps it should
just focus on travel at certain times of day and/or locations? These are questions that
go to the heart of the ‘de-coupling’ debate.
One of the questions that SACTRA (1999) were asked to address is whether, ‘… it is
possible to ‘de-couple’ growth in traffic levels from growth in the economy, in order
to obtain the positive benefits of greater wealth, while reducing some of the negative
effects of congestion and environmental impacts?’. In addressing this question,
SACTRA noted that it was important to bear in mind that transport policy also has
many other objectives, including the improvement of safety, the environment,
travelling conditions, accessibility, integration and social inclusion.
5.4
D1: Identification of the key linkages between transport intensity and economic growth
SACTRA separated the question into two parts:
(i)
Is the volume of traffic subject to influence by available policy instruments?
(ii)
If it is, would doing so have a favourable or unfavourable economic effect?
In response to the first question SACTRA concluded that whilst income does have a
strong effect on traffic growth, the latter is also influenced by the price, speed and
quality of transport, hence policy instruments do exist which should be able to
influence the volume of traffic.
In responding to the second question an apparent paradox was raised: if reducing
transport costs should improve economic performance, how could it be that raising
transport prices could be good for the economy? The paradox is resolved by
recognising the difference between transport prices and the real resource costs that
transport imposes on the economy. Reducing traffic levels can contribute to improved
economic performance where transport prices are currently below their true marginal
social costs. That is, where current transport prices do not adequately reflect the full
external costs of transport. Conversely, where transport prices are currently above
marginal social costs, reducing the volume of traffic would lead to a net loss of
economic welfare.
In conclusion, when seeking to de-couple transport from economic growth it is
important to bear in mind the ultimate objectives of policy. In other words, what
policy makers are really seeking to minimise are the unwanted environmental and
other side effects - the negative externalities - created by transport. This is a debate
that will be taken forward in the second deliverable of the SPRITE project.
References
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