Deepened Focus on Sustainability and Climate Change

The Environment in a Changing Climate

Threats to the environment and climate will continue to rise, if the current trends—population growth, overexploitation of ecosystem, and unsustainable consumption and production patterns—continue unabated, leading to a growing focus on sustainability. For example, CO2 emissions from transport could increase by 60 percent by 2050, despite the significant technology progress assumed in the outlook’s baseline scenario. If no additional measures are taken, CO2 emissions from global freight could increase by 160 percent, as the international freight volumes grow threefold during the same period (International Transport Forum 2017).

Environmental degradation and climate change will have a profound impact on connectivity, especially for low-income countries and small-island countries. From a supply-side perspective, those countries will need to bear the consequence of high exposure to price volatility across all sectors (e.g., energy, trade, agriculture, etc.), including the higher potential of conflicts around natural resources. They will also tend to have fewer resources available for building climate change resilient infrastructure.

Traffic in Beijing, 2012. Photo: Li Lou / World Bank

Climate Change, Trade, and Transport

From a demand-side perspective, climate change may induce large migration waves as employment opportunities—in manufacturing, agriculture and labor—may shift to other locations. As a consequence, trade patterns and ultimately transport routes could change. For example, the year-round opening of the northern shipping route may affect global shipping networks.

The international community is committed to taking urgent action to combat climate change and its impacts, manifested through SDG13 of the 2030 Agenda and anchored in the Paris Agreement on Climate Change (Ansuategi et al 2015). Its targets will be designed to achieve a net-zero-emission economy by 2050, and improve other dimensions, such as air quality and climate resilience by 2030, as set forth in the SDG targets (Sustainable Mobility for All 2017, 8). The challenge is to create access to safe, affordable, accessible and sustainable transport systems for all.

Low-Emission Transport Goes Mainstream

Governments will increasingly intervene to create more efficient transport systems by increasing the costs of emissions and adopting avoid policies on transport and shifting toward more environmentally friendly policies. With greater emissions transparency—demanded from a growing, environmentally-conscious middle class—the private sector is also likely to respond with green logistics solutions on a broad scale, as can be currently observed in mature markets. Nevertheless, road transport will continue to play a major role in the mid-long term (International Transport Forum 2017).
 

Weather Events Reshape Transport

Transport operations will be affected by weather events. Consequently, transport systems and supply chains must become more flexible and adaptable to climate change impacts. This reaches beyond incorporating resilience in individual infrastructure assets, requiring policymakers to approach critical connectivity infrastructure more strategically. The objective is to minimize impact on users when critical infrastructure is compromised. For example, policymakers should focus on building resilient infrastructure networks with alternative route options, which necessitates a change in infrastructure network planning, prioritization, and coordination among stakeholders. On a positive note, many developing countries can embed resilience principles in infrastructure planning at this stage of their development, thus mitigating some of the demand-side impacts.
 

Green Energy Technologies

The efforts toward a zero-emission economy will also entail increasing focus on "green" energy technologies, with the potential to shift the current pattern of energy trading. To reduce energy demand and increase investments in low-carbon electricity, economically sustainable energy strategies should involve a shift of energy investment flows from conventional fossil fuel technologies toward renewable energy technologies (Figure 1). As green energy tends to rely on onshore production, the current volume and route of cross-border energy trading could be impacted in the future. However, according to a recent World Bank report, the use of wind, solar, and energy storage batteries, for example, has the potential to be materially intensive due to the minerals and metals—aluminum, copper, lead, lithium, manganese, nickel, silver, steel, zinc, and rare earth—that go into the production of green energy (Arrobas, et al. 2017). Increased demand of these minerals and metals could potentially impact commodities trading volume.
 

Figure 1: IEA Technology Scenario for Electricity Installed Capacity

Source: Arrobas, et al 2017. Based on 2016 data from the International Energy Agency. Note: GW = gigawatt.


REFERENCES

Ansuategi, A., Patxi Greo Valerie Houlden, Anil Markandya, Laura Onofri, Helen Picot, Georgia-Marina Tsarouchi, and Nigel Walmsley. 2015. The Impact of Climate Change on the Achievement of the Post-2015 Sustainable Development Goals. London, United Kingdom: Climate and Development Knowledge Network.

Arrobas, Daniele La Porta, Kirsten Lori Hund, Michael Stephen Mccormick, Jagabanta Ningthoujam, John Richard Drexhage. 2017. The Growing Role of Minerals and Metals for a Low Carbon Future. Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/207371500386458722/The-Growing....

International Transport Forum. 2017. ITF Transport Outlook 2017. Paris: OECD.

Sustainable Mobility for All. 2017. Global Mobility Report 2017: Tracking Sector Performance. Washington, D.C.: Sustainable Mobility for All.

 

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