Global NDC Conference 2019

1. Global NDC Conference 2019 Impacts of transport pricing on GHG emissions: results from assessing country policy applications

2. Agenda • Welcome and introductions • Introduction to ICAT • Overview of transport pricing policies and the ICAT Transport Pricing Methodology • Case study from application of ICAT approach • World café discussion • Debrief and conclusion

3. Objectives for this session At the end of this session, participants will understand: • How to assess GHG impacts of transport pricing policies and actions taken to implement NDCs • Scope and application of the ICAT approach for assessing GHG impacts of pricing policies • How impact assessment can be applied to reporting under the UNFCCC and to domestic decision-making to advance NDC implementation and updates

4. Introduction to ICAT Source: Penn State

5. Multi-stakeholder partnership

6. ICAT objectives Provide policymakers around the world with tools and support to assess the impacts of their climate policies and actions, to further transparent and ambitious climate action and mobilize investment. Two components: • ICAT series of guidance documents • Country support to build capacity

7. ICAT Guidance Documents

8. Using the guidance documents • With its tools and support, ICAT assists countries with the following objectives: • Improve climate policy-making • Develop evidence-based policies • Establish a robust MRV system to monitor implementation progress • Challenges and limitations • Insufficient national capacity to conduct an impact assessment • Lack of data or data collection systems • ICAT methodologies cover a subset of potential policies and actions • Methodologies may need to be tailored for country context

9. -- Introductory Guide -- Impact Assessment Methodologies Greenhouse gas impacts: Sustainable Development Renewable Energy Buildings Efficiency Transformational Change Transport Pricing Agriculture Non-State and Subnational Action Forestry Process Guides Stakeholder Participation Technical Review

10. Linkages between ICAT and the transparency framework Reporting inputs and aspects of the transparency framework National GHG inventory National inventory report Reports under the transparency framework ICAT methodologies can help with reporting inputs and aspects of the transparency framework Progress made in implementing and achieving NDC Biennial Transparency Report Global stocktake Technical expert review Support needed and received Update NDC Climate change impacts and adaptation Facilitative, multilateral consideration of progress Adaptation communication Reporting Review

11. Who can use the guidance? • Governments • Donor agencies and financial institutions • Businesses • Research institutions and non-government organizations (NGOs) • Stakeholders affected by policies and actions, such as local communities and civil society organizations

12. ICAT countries

13. Goals for the methodologies Understanding effectiveness of policies/actions Deciding on policy/action design and implementation Reporting on policy/action impacts Adapted from: GIZ 2016, Reference Document on Measurement, Reporting and Verification in the Transport Sector ex-ante ex-post

14. Transport Pricing Methodology Assessing the greenhouse gas impacts of transport pricing policies

15. Purpose of the methodology • Provide methodological guidance for assessing the impacts of pricing policies in the transport sector • Simple, straight-forward approach for policymakers and practitioners • In the context of NDC, NAMA and further national or regional transport strategy or policy development

16. Applicability - pricing policies addressed • Fuel subsidy removal • Increased fuel tax or levy • Road pricing (road tolls and congestion pricing) • Vehicle purchase incentives for more efficient vehicles

17. Example: Approach A Example: Approach A assessment (ex-ante) A government plans to implement a national fuel levy. The only data available is total annual energy use in transport sector (aggregated gasoline and diesel consumption)

18. Part III: Assessing Impacts - Steps

19. Step 3: Fuel demand impact (I) Example: Approach A • Ex-ante: how does a change in fuel price affect fuel demand? • Possible (major) impacts: • Reduced vehicle travel • Increased switching to more efficient and alternative fuelled vehicles • Increased switching to different transport modes source: wikieducator.org

20. Chapters of the Compendium Intra-urban mass rapid transit investments Comprehensive urban transport programmes Vehicleefficiencyimprovementprogrammes Alternative fuelsincentives Inter-urban railinfrastructure Freighttransportinfrastructureinvestmentstoshiftmode National fuel economy standards Fuel pricingpolicies Compendium on GHG Baselines and Monitoring: Passenger and Freight Transport  https://www.changing-transport.org/publication/the-passenger-and-freight-transport- volume-of-the-compendium-on-ghg-baselines-and-monitoring/

21. Questions?

22. Case Study from Sri Lanka

23. Overview of Sri Lanka’s NDC (transport) • Transport is a known source of many air pollutants. Transport is a growing source of greenhouse gas (GHG) emissions, which are believed to be contributing to a change in the earth’s climate Sri Lanka transport sector is responsible considerably for global GHG emissions. • In recent years, the number of vehicles added to the highways has been increased in our country. • There is a decreasing of use of common vehicles such as buses and trains • Increase the use of small vehicles like Three-wheelers, small cars and motorcycles. • There is potential doubling of transport activity by 2025 driven by economic growth, development activities such as Port City, LRT, highways etc. • increasing need to assess and communicate the impacts of transport policies and actions to ensure are effective in delivering GHG mitigation.

24. Cont: Overview of Sri Lanka’s NDC (transport) • Using of old vehicles are also badly affect to the environment with the emission of CO, CO2. Green test is essential for all the vehicles in Sri- Lanka to reduce the use of old vehicles and also protect the environment. • Promotion of using Electric vehicles and motor bicycle

25. What was the objective of your assessment? • The assessment provides principles, concepts and a stepwise method for estimating the GHG. • Policy Instruments for Reducing Transport Emissions and Reducing Human Exposure • Removal of Fuel subsidy that reduce the price of vehicle fuel below its fair- market cost. • Increasing of fuel tax or levy imposed on each unit of vehicle fuel, which may include general taxes that apply to many goods and special taxes specific to vehicle fuel.

26. Cont • Road pricing (road tolls and congestion pricing), Motorists pay directly for driving. • Particular roadway in a particular area. Road pricing has two general objectives revenue generation and congestion management. • Vehicle purchase incentives for more efficient vehicles: Governments increase the fuel . • Efficiency of the vehicle fleet and/or promote a shift to lower-carbon fuels by providing incentives.

27. Cont. • In case of the purchase of selected vehicles, This policy is most applicable to electric, plug-in hybrid. • Electric, hydrogen-fueled and other vehicles that are not powered by gasoline or diesel, and is applied by governments through lower purchase taxes, purchase rebates, income tax credits and lower vehicle taxes.

28. Were you able to revise or enhance the policy you assessed based on the results? • Already given tax concessionary for electric cars has been ceased and come to an end due to budget constraints and the economic growth. • There are lot of criticism on certain malpractices on vehicle emission test in Sri Lanka even in media and proposing to stop vehicle emission test programme. • Very old vehicles that should be removed are still running on the road

29. What aspects of your policy and/or the impact assessment worked well? Any intervention in the transport sector needs to be part of a favorable transport planning and management policy framework. That framework should consider as follows: • Conducting air quality audits of all new major transport infrastructure projects as a required part of the environmental impact assessment to determine if the projects will lead to or worsen exceedances of air quality standards. • Giving priority to buses in the use of road infrastructure, and particularly the creation of segregated busway systems, in order to improve and sustain environmental standards for buses • Formulating transit-oriented development strategies to reduce trip lengths and concentrate movements on efficient public transport axial routes. • Establishing adequate and safe pedestrian and bicycle facilities in order to promote nonmotorized options for short distance trips. • Alternative fuels include gaseous fuels such as compressed natural gas (CNG) and liquefied petroleum gas (LPG), biofuels, and electricity. They are detailed below and in annex 6.

30. Cont • Improving the efficiency of bus operation through the design of more efficient route networks, better cost control, and creation of incentives for improvement through commercialization and competition. • Promoting competitive bidding for transport franchises based on performance-based criteria, including emission characteristics of vehicles. • Establishing and implementing protocols for traffic signal system settings that result in reduced exhaust emissions. • Establishing urban traffic management centers and involving police in traffic management system design and training. • Establishing a municipal department or agency with comprehensive responsibility for integrated land use and transport planning, including environmental protection issues.

31. What aspects of your policy and/or the impact assessment worked well? The economic ideal would be a system of direct taxation on emissions, combined with trading of emission certificates among fuel and vehicle manufacturers, but the complexity of such a system makes it necessary to devise alternatives. Among the fiscal policies that can be used to reduce transport sector emissions are the following: • Assess policy effectiveness and improve implementation by determining whether policies are being implemented as planned and delivering the intended results. • Inform adjustments to policy design and implementation and decide whether to continue current actions, enhance current actions, or implement additional actions Learn from experience and share best practices about policy impacts. • Track progress toward national goals such as NDCs and understand the contribution • Taxes on diesel fuel for transport use are very low, raising them to compensate for environmental damages, pay for road wear and tear, and encourage fuel-efficient vehicles and the use of cleaner fuels.

32. cont • In addition to fuel taxes, considering separate vehicle charges based on vehicle weight, axle loadings, and annual mileage. • Introducing direct charges for the use of urban road space, including congestion charges. • Introducing or raising taxes, import duties, and vehicle licensing disincentives for polluting vehicles and engines. • Giving serious consideration to eliminating subsidies to public off-street parking as well as not permitting free on-street parking, especially where they increase congestion by generating private transport trips to congested locations, or where on-street parking increases congestion by reducing available road space.

33. What barriers did you face? • There may be local interference against the certain implementations. • There are no permanent policy framework for-Land Use Policy, Road Pricing, Parking Policies, The Special Problem of Motorcycles and Three wheelers, Direct Taxation on Emission, Fuel Taxation , Property Taxation and Fees • Common people do not like to pay extra payments on environmental friendly new proposals and implementations. • There is vast criticism on extra carbon tax proposal on road vehicles to be implemented in very near future. • Difficult to change peoples attitudes. • Lack of the Supporting institutional framework for institutions involved in urban air quality, the role of central government , involving the private sector, nongovernmental organizations and civil society.

34. World Café Discussion

35. World café discussion topics • The role of pricing policies in the long-term mitigation strategy for the transport sector • How to MRV GHG and non-GHG impacts of national transport fuel pricing policies (e.g., subsidy removal on gasoline and diesel) • How to MRV the impact of transport pricing policies, such as vehicle purchase incentives and road pricing • Best practices in the implementation of transport pricing policies so that they preserve social equity

36. Revisit session objectives At the end of this session, participants will understand: • How to assess GHG impacts of transport pricing policies and actions taken to implement NDCs • Scope and application of the ICAT approach for assessing GHG impacts of pricing policies • How impact assessment can be applied to reporting under the UNFCCC and to domestic decision-making to advance NDC implementation and updates.

37. Thank You Jürg Füssler -- juerg.fuessler@infras.ch Sinclair Vincent -- svincent@verra.org www.climateactiontransparency.org