1. Reshaping transport for a cleaner environment and fairer societies

As the world responds to the human tragedy and economic crisis triggered by the Covid-19 pandemic, the long-term challenges of climate change and inequality loom ever larger on the horizon. Environmental and equity considerations are paramount as we strive for sustainability in a time of economic uncertainty.

This holds especially true for transport.

Transport is inextricably linked to both climate change and inequality. Mobility plays an integral role in determining the quality of our lives. Its dependence on fossil fuels also makes it a major contributor to climate change, however. Transport was responsible for 25% of direct CO2 emissions from fuel combustion in 2018 (IEA, 2020[1]). Climate change contributes to inequality in many ways. In addressing it, governments should ensure the most vulnerable do not have to bear further social costs. An equitable transport system improves the well-being of all its users by providing access to opportunities and distributing the costs fairly.

Governments today have a unique opportunity to reduce transport emissions and increase transport equity by putting these two goals at the heart of their economic recovery strategies. The ITF Transport Outlook 2021 provides an evidence base to inform policy decisions, which can support this twin ambition. It aims to underpin an equitable mobility transition to a more sustainable and resilient transport system that is economically viable, politically feasible and centred on human well-being.

The causes and impacts of climate change are unequally distributed between developed and developing nations and between the wealthy and poor. The responsibility to take action and reduce emissions, therefore, is also not evenly shared. A fair transition (based on a polluter pays principle) calls on the largest cumulative emitters to bear a greater share of costs. Climate action should also ensure that those who are most vulnerable are, at the very least, not worse off: environmental and equity considerations must be at the heart of a transition to sustainable mobility.

The gap between rich and poor is at its highest level in 30 years within many countries, though economic inequality between countries has decreased in relative terms or stayed roughly constant (OECD, 2015[2]; United Nations, 2020[3]; Hasell, 2018[4]). More than 70% of the world population live in countries with growing inequality (United Nations, 2020[3]). In OECD countries, the top 10% of the population earned 9.6 times more than the poorest 10% in 2015. This ratio was seven in the 1980s and has been growing since. The declining incomes of the bottom 40% of the working population are of even more concern; so is the decline of the middle class in every generation since the baby boomers (OECD, 2015[2]; OECD, 2019[5]).

Rising income inequality has held back economic development. The OECD estimates that it has reduced cumulative gross domestic product (GDP) growth by 4.7 percentage points between 1990 and 2010 on average in its member countries (OECD, 2015[2]). Even where GDP has grown, this has not translated into rising living standards for median and lower-income earners (OECD, 2020[6]).

In parallel, climate change has emerged as the central global challenge. In response to global warming, the international community committed to limit the increase in global average temperatures to “well below 2˚C above pre-industrial levels” in the 2015 Paris Agreement and to “pursue efforts” to limit the rise to 1.5˚C. To this end, the signatories agreed to submit national climate action plans, known as nationally determined contributions (NDCs).

Countries now have a singular opportunity to enhance ambitions and detail climate actions that align with the 1.5˚C objective  
        

The stakes in the race against rising global temperatures are increasing. The latest data show that global CO2 emissions continue to grow (IEA, 2020[7]). At the same time, new scientific evidence, notably in a 2018 special report by the Intergovernmental Panel on Climate Change, has highlighted the potentially drastic impact of global warming above 1.5˚C (IPCC, 2018[8]). Even the full implementation of the current NDCs, which are non-binding, would result in an average temperature increase of 3˚C or more (WRI, 2020[9]). The Paris Agreement requires countries to submit revised NDCs every five years. In 2020/21, countries have a singular opportunity to enhance ambitions and detail climate actions in the revised NDCs that align with the 1.5˚C objective.

The realities of economic inequality and climate change are closely intertwined. The causes and consequences of climate change are inequitably distributed. While the causes are linked to consumption by wealthier nations and individuals, the consequences affect developing nations more than developed countries and poorer citizens more than the wealthier ones within each country. Women are also impacted more than men, especially in developing nations: 80% of people displaced by climate change are women (UNDP, 2016). Those that face the worst consequences of climate change are the least responsible for causing it and have the least resources to cope with the harm – a “double injustice” (Gough, 2011[10]).

Global warming is responsible for an increase in income inequality of approximately 25% between countries over the past 50 years, compared to a scenario without anthropogenic warming (Diffenbaugh and Burke, 2019[11]). The gap results from years of decline in economic output in hotter and poorer countries most affected by rising temperatures and concurrent increases in many wealthier nations in cooler climates. Developed nations benefit disproportionately from the fossil fuel-based activities that cause climate change (Diffenbaugh and Burke, 2019[11]), the consequences of which – such as more frequent natural disasters – deepen existing fault lines of economic and social inequality (UNDP, 2019[12]).

The emissions divide between rich and poor is apparent between countries, but especially so between individuals. Emission inequalities between countries have decreased due to the growing carbon footprint of the upper and middle class in developing nations. Within countries, emission-related inequality is rising, however. By 2015, inequality in CO2 emissions within countries accounted for 50% of the global distribution of CO2 emissions, while in 1998, it only contributed to one-third (Chancel and Piketty, 2015[13]). The top 10% of individual emitters in the world contribute to 45% of total global emissions, while the bottom 50% contribute 13% of emissions (Figure 1.1) (Chancel and Piketty, 2015[13]). A look at air travel, one of the most CO2-intensive transport modes, makes these inequalities more apparent: only 11% of the world’s population travelled by air in 2018, and only around 4% took longer distance international flights. More than half of total aviation-related emissions are the responsibility of an affluent minority of not more than 1% of the global population (Gössling and Humpe, 2020[14]).

Meaningful cuts in greenhouse gas emissions will inevitably require action by developed countries. As the largest cumulative emitters and also those with the greatest technological capacity and capital, these countries have both the greatest responsibility and the necessary means to address climate change (Thorwaldsson, 2019[15]) and, beyond that, implement the UN Sustainable Development Goals (SDGs).

Emission-reduction measures should also target where they will make the largest impact for the least cost. Investments in sustainability by developed nations should not be limited to their own countries. The social and economic benefits that accompany investments in technologies and green initiatives justify supporting action in developing nations as well. This will require technology transfers to narrow the gap between countries’ access to existing technologies and capital (Kosolapova, 2020[16]). In the transport sector, tangible improvements to issues like air pollution, congestion, and safety, accompany progressive decarbonisation agendas and offer significant local benefits while also reducing global CO2 emissions.

Economic inequality and climate change are closely intertwined. With its call for urgent and drastic climate action, the IPPC also emphasises the centrality of social justice and equity for any pathway to sustainable development (IPCC, 2018[8]; IPCC, 2018[17]). To reflect this linkage, international agreements and national policy agendas should focus on equitable decarbonisation policies which align with goals of social inclusion and sustainable development more broadly. At the international level, countries need to take responsibility for their CO2 emissions. Each country's share of the world’s total carbon footprint should also be distributed between communities and households fairly (CSER, 2018[18]). At a minimum, decarbonisation must ensure the most vulnerable are not left worse off. At their most ambitious, climate change mitigation policies can improve access for citizens and enhance the resilience of transport systems, if the distributional impacts of decarbonisation measures are addressed.

All citizens need transport to access goods and services and to facilitate social interactions. Our societies are built upon transport networks. They enable people to go to work and earn an income, to attend school and improve their opportunities in life, to see friends and relatives, to access health care, to go to the library, swimming pool, or park. The supply of essential goods, from food to medicine, depends on efficient, reliable logistics operations. Well-connected transport allows our social and professional networks to span the globe and provide an indispensable lifeline for remote communities.

Transport is inextricably linked to individual and collective well-being. Being mobile does not in itself improve the human condition; it is when mobility provides the means of access to a desired destination (ITF, 2019[19]). Many definitions and operationalisations of transport equity exist. This Transport Outlook considers equity from the perspective of accessibility to human needs such as goods, services, and social networks, as well as the equitable distribution of the benefits and costs of transport.

An equitable transport system allows everyone to satisfy their needs, irrespective of income, age, gender, or disabilities. The absence of an equitable transport system marginalises certain groups. Accessibility includes both the availability of opportunities (or destinations) for individuals and the availability of safe and affordable transport options to connect the individual to these opportunities, based on financial resources, mobility restrictions, etc. Individual needs vary over a lifetime, changing with life stage and by where they live relative to the destinations accessed (Banister, 2018[20]). While the diversity in resources and needs implies a certain degree of inequality between individuals, it is important that these transport inequalities remain minimal and understood by policy makers.

Inequalities in transport are detrimental to society. Lack of access marginalises groups and leaves people unable to achieve their highest potential, individually and collectively. Transport systems can entrench social inequalities. Inequalities in access occur based on income groups, ethnicity, gender, age groups, and between urban and rural areas. Lack of access to education or employment affects the economy by stunting human capital and labour market participation (Mackie, Laird and Johnson, 2012[21]). Life expectancy reduces and health care costs increase due to lack of access to regular care and opportunities to maintain healthy lifestyles (Porter, 2013[22]; WHO, 2011[23]). Furthermore, those who are “less travelled”, because they cannot afford to, are also the “travelled upon” (Banister, 2018[20]; Sustainable Development Commission, 2011[24]). They bear the externalities of travel by the more fortunate. Externalities include communities severed by motorways and other infrastructure (Anciaes et al., 2016[25]), noise and air pollution (Rock, Ahern and Caulfield, 2014[26]), higher rates of traffic incidents, high household transport expenditure due to forced car ownership (Sustainable Development Commission, 2011[24]), among others.

Transport has shrunk our world. People and goods are travelling further and more frequently than ever before (Banister, 2019[27]). In wealthier countries, people travel five times further daily than 60 years ago, on average (Banister, 2018[20]). The increase in the availability and affordability of transport has made us much more mobile, yet the costs to society and the environment have risen with it. Emissions and the unequal distribution of their costs across society grow with demand, especially for long-distance transport.

The rising demand for travel and freight makes it challenging to decarbonise transport. The increase in travel volume has more than offset improvements in vehicle and fuel technologies over the past few decades. The transport sector is the largest energy end-use sector, with a direct energy consumption of 121 exajoules (EJ) in 2018, jointly with the industry sector at 119 EJ (IEA, 2020[28]). The final energy used in transport vehicles is responsible for 25% of direct CO2 emissions from fuel combustion in 2018 (IEA, 2020[1]). The transport sector depends more on oil than any other end-use sector: oil products represent 92% of transport’s total final energy consumption (IEA, 2020[28]). Its high-energy use and a large share of carbon-intensive fuels make transport a major contributor to climate change – even before considering any additional emissions associated with transport, such as those from fuel production, vehicle manufacturing and infrastructure construction.

Transport sector CO2 emissions have grown steadily for the last three decades, with a temporary dip during the 2008 financial crisis (Figure 1.2). The Covid-19-related shutdowns in 2020 also led to drops in CO2 emissions, which ITF models estimate at 15% across the transport sector. Yet emissions will likely rebound as confinement measures are lifted and economies recover. In 2019, the year before the Covid-19 pandemic, global transport emissions increased by 0.5%; less than the 1.9% compound annual growth rate observed since 2000. Yet it still underlines that transport emissions are growing, and thus of growing concern (IEA, 2020[29]). Any delay in halting and reversing this trend in transport emissions will make overall emission targets increasingly difficult to reach.

Countries’ current decarbonisation commitments are not enough to meet climate objectives. Even if signatories of the Paris Agreement meet all targets of their initial NDCs, the planet would far exceed the 1.5ºC and even the 2ºC global warming threshold (WRI, 2020[9]). Many NDCs list CO2 reduction ambitions specifically for transport, but few include clear measures to reach them. While 81% of NDCs recognise transport as relevant, only 10% define transport-specific mitigation targets (ITF, 2018[30]). The implementation of all announced transport-related NDCs as of 2018 would fall short of the 2030 transport sector targets required to halt temperature increases to 2ºC compared to pre-industrial levels, with high probability. To reach it, transport-related NDCs would need to commit to an additional reduction of 600 million tonnes CO2 by 2030 (ITF, 2018[30]).

Decisive policy action can transform transport, however. Limiting global warming to the more ambitious 1.5ºC target is possible if policies are put in place to manage demand, prioritise sustainable modes, improve vehicles and fuel technologies, and optimise operations. Given the role of transport in climate change, transport ministries need to be actively involved in determining national commitments and drafting the revised NDCs as well as creating clear pathways to reach these goals.

Broader support, dialogue and co-operation between governments, industry, and scientific research will be vital in identifying barriers to decarbonisation, and roles and responsibilities of different actors  
        

Multi-stakeholder dialogues and co-operation are needed to turn plans into action. The results of this Transport Outlook are a diagnosis and a call to action. It shows how policy trajectories need to change and what must be done to slow and reverse transport sector contributions to CO2 emissions. However, it is a starting point. Broader support, dialogue and co-operation between governments, industry, and scientific research will be vital in identifying barriers to decarbonisation, and roles and responsibilities of different actors. More detailed analysis, joint plans, and monitoring are all necessary to make collective action a reality.

Tackling inequality and climate change together is a global imperative. Achieving this objective includes developing greener and more inclusive transport systems supported by efficient transport policies. The transport sector affects everyone and connects people across political and geographical boundaries. This makes it especially challenging for policy makers to enact changes. Effective transport-related climate and equity policies must be politically feasible, socially acceptable, and trusted. Specifically, such transport policies should meet three criteria: be aligned with measures for pandemic recovery, shift towards improving access to opportunities, and foster collaboration between transport and other sectors to break down silos.

Transport policy can be a catalyst for positive change or for conflict where broader issues of climate change and inequality come to a head. Citizens will support measures to make mobility more sustainable if they perceive them as “just” and not imposing an undue burden on the average person. Policies they perceive as reducing affordable access and part of a pattern of growing economic inequalities, on the other hand, can create social and political tensions (Thorwaldsson, 2019[15]).

Policy alignment is vital for prioritising funding in the coming years. Recovery packages should tackle economic, environmental and social goals simultaneously, rather than sequentially or in isolation, not least because of tight public finances and the environmental and social costs of an imbalanced focus on GDP growth (Buckle et al., 2020[31]). The financial costs of decarbonisation may seem high, but these investments can create new jobs, lower health-care costs, and protect biodiversity (CCC, 2019[32]; Banister, 2019[27]). Fulton et al. (2017[33]) have demonstrated that savings from prioritising public transport investment over car-based travel, for example, are likely to exceed costs. Investments in decarbonisation and digitalisation technologies can reduce costs and generate net long-term benefits and are well-suited to drive a post-Covid-19 economic recovery (ETC, 2020[34]; Varro, 2020[35]).

Such a unified, aligned, holistic approach will also support the broader agenda of the United Nations Sustainable Development Goals (SDGs). Transport is a cross-cutting contributor to many of these goals and is explicitly or implicitly linked to most of the 17 SDGs (Figure 1.3 and Box 1.1).

Transport activity must decouple from economic growth. Historically both passenger and freight transport have evolved in lockstep with GDP growth. The objective thus was to enable faster, more convenient and cheaper travel over longer distances. Conventional wisdom in the transport sector settled on predicting future demand and then accommodating this prediction by providing infrastructure. With the environmental costs of fossil-fuelled mobility undeniable, decoupling mobility provision from the notion of economic growth is essential to contain climate change and maintain a strong economy (Gray et al., 2006[36]; Banister and Stead, 2002[37]; OECD, 2019[38]; Schleicher-Tappeser, Hey and Steen, 1998[39]).

People travelling more and travelling further (higher mobility) is not an indicator of improving accessibility. Higher mobility can, in fact, be a sign of poor transport options in places that require more trips and longer journeys to reach necessary destinations (OECD, 2019[38]). Transport planning that serves citizens’ needs considers the destinations they wish to access and how well transport services connect origins and destinations. This shift in focus from mobility to accessibility is at the core of policies that enable transport to deliver a comprehensive set of goals from climate mitigation to sustainable development and well-being (ITF, 2019[19]). See Box 1.2 for OECD work focussing on applying a well-being lens beyond the transport sector to meet Paris Agreement goals.

Faster travel for some comes at a price for others. Road designs and land-use patterns favouring mobility over accessibility can include lower density developments and highways to allow for faster speeds. Designing for accessibility involves higher density development and roads with multiple intersections and connections to increase accessibility by alternative modes (Litman, 2003[46]). Transport networks that focus solely on faster travel and reduced congestion sacrifice safety, which is linked to lower speeds (ITF, 2020[47]). They also perpetuate car dependence and impact citizens’ health by limiting options for active travel (Le, Buehler and Hankey, 2018[48]). Not least, they imply a low priority for the needs of individuals who do not own a car. The focus on time savings for road travel often benefits groups that already travel the most. They are less likely to help non-drivers, the elderly, low-income households, or those with mobility restrictions (Lucas, Tyler and Christodoulou, 2009[49]).

The externalities of mobility-focused transport systems must be internalised to understand the real cost and impact of increased travel. In fact, beyond the social and health consequences, higher vehicle-kilometres travelled (increased traffic and mobility) can negatively correlate with economic measures of productivity (Litman, 2014[50]). There is little reason to continue designing for a mobility-focused future when transport is a means to an end—access to the destination opportunity.

A focus on accessibility opens the doors to improving well-being while meeting the demand for travel in a more sustainable manner. By contrast, a mobility-focused transport strategy centres on providing for transport growth (Litman, 2003[46]; OECD, 2019[38]). As transport activity increases, mitigating outcomes that drive climate change becomes more and more challenging. But supporting the economy and ensuring access for citizens is possible with less transport activity. The scenario results in this report demonstrate that a balanced set of measures to reduce climate impacts can improve accessibility, lower growth of mobility demand, and drastically cut transport’s CO2 emissions.

Decarbonising transport needs the help of other sectors. Transport’s many interdependencies require holistic policy approaches, bringing together decision-makers of different sectors for joint and targeted action. A longstanding priority area for enhanced co-ordination is the integration of decisions on transport planning and land use. Demand for the transport of people and goods heavily depends on the spatial distribution of the population, which is primarily dictated by zoning decisions. Yet, in many areas in the world, transport and urban/regional planning departments remain siloed.

New private mobility services challenge public regulators. The quick pace of change has left authorities unsure how to regulate shared mobility and micromobility services, and accommodate them in ways that benefit citizens, support environmental goals, uphold urban space management principles and ensure safety. Policymakers need to work with the private sector transport “disruptors” to help develop an environment that takes advantage of the benefits that new mobility services provide while mitigating the costs and negative externalities (ITF, 2016[51]; ITF, 2020[52]).

Mobility and accessibility increasingly rely on digital technology. Today’s citizens use real-time information to find out when the next bus is coming, map out the least congested driving route, or hail a taxi. Vehicles rely on Information and Communications Technology (ICT) for routing, automation, emergency communication, and on-board diagnostics. ICT also enables working, socialising, and shopping without the need for physical travel. Freight transport uses ICT for optimising logistics through asset sharing, real-time feedback for eco-driving, the Physical Internet, and more. The International Energy Agency estimates that digitalisation in the road freight industry could reduce energy use by 20-25% (IEA, 2017[53]).

Vehicles with no tailpipe CO2 emissions will still produce indirect emissions upstream. Emissions are generated not only by engines but during the production and delivery of fuels, for instance: electricity or hydrogen. Further impacts come from the extraction of raw materials, the manufacturing process for vehicles, and the construction, maintenance and operation of transport infrastructure. Therefore, policy makers should ensure that new vehicle technologies and transport systems improve environmental performance across the economy. Well-implemented technological shifts can exploit synergies between sectors. For example, electric vehicles can help electricity grids integrate renewable energy sources through managed charging schemes (McKinsey & Company, 2018[54]). The shift to electrification can also help to diversify national energy consumption, thereby aiding energy security.

More clean vehicles may mean lower tax revenues. Without proper anticipation, vehicle electrification and increased use of low-carbon fuels may lead to lower revenues from fossil fuel taxes. Tensions may ensue between the desirable environmental and health benefits of low-carbon mobility on the one hand and the wish to fund welfare programmes via fossil fuel taxes on the other. Preparing a transition to distance-based pricing for mobility and increased carbon taxes can address this challenge. However, consensual implementation will likely require a well-planned dialogue with stakeholders and effective engagement with the general public.

How the transport sector tackles decarbonisation and inequality over the coming years will be shaped by the new realities created by three main factors: the Covid-19 pandemic, the needs of a changing citizenry, and the development path of the economy. The pandemic has disrupted business as usual for transport. It has raised questions about the future attractiveness and viability of public transport, changed commuting patterns, and revealed more clearly how transport contributes to social inequalities. Today, still within the context of pandemic recovery and economic uncertainty, decisions must be taken on how to meet the future needs of an increasingly urban and rapidly ageing population in some parts of the globe.

The Covid-19 pandemic poses an unprecedented challenge to the transport sector and society as a whole. Covid-19 has forced us to reset our lives and take stock of how we work, live and travel. It has brought cities to a standstill, halted international travel, and strained supply chains, forcing logistics operations to pivot radically to keep goods flowing. Some trends in driving, public transport, and walking patterns can be seen in Figure 1.4, which approximates changes in travel demand during the pandemic based on routing requests of Apple Maps users. While the sample is biased and depicts only the habits of individuals with Apple devices, who are often wealthier, it illustrates the strong impact each wave of Covid-19 had on travel volumes and the relative impact on different modes. The pandemic also exacerbated economic and social inequalities, and transport had a role to play in it all. Economic losses, poorer health outcomes and diminished transport access affected vulnerable populations in particular (WRI, 2020[55]).

As the world moves towards recovery, there is an opportunity to do things differently. If enacted wisely, transport policies can aid economic recovery and at the same time move the planet towards greater environmental sustainability and social equity. Policy choices regarding spending and investments during recovery will determine the world’s ability to mitigate climate change and reach sustainable development goals.

Job losses during the pandemic hit sectors unable to work from home most. Employment in the foodservice, retail, entertainment and tourism industries, the informal sector and the gig economy suffered in particular. Women are overrepresented in these industries and were thus strongly affected. Globally, 58% of employed women work in informal employment, and during the first month of the pandemic, informal workers lost an average of 60% of their income (UN Women, 2020[57]). Migrants, low wage workers, minority ethnic, and low-income communities in urban areas with inadequate housing and overcrowding saw much higher levels of community spread of Covid-19 (OECD, 2020[58]).

Essential service workers faced access restrictions as public transport cut services. In the United States, a third of essential workers commute by public transport, and two-thirds of them are from ethnic minorities (TransitCenter, 2020[59]). Poorer neighbourhoods in developing nations relying on privately operated paratransit services for connectivity were cut off when these services shut down because of a lack of users, forcing those depending on them to walk or cycle long distances (IGC, 2020[60]).

The transport sector launched countless initiatives to support the fight against Covid-19 in other ways, despite the enormous difficulties. Rail, public transport, bikesharing schemes, taxi and ride-hailing services offered free or discounted rides to health workers. App-based mobility services disseminated government health information and provided mobility data and analysis to governments. Automotive and aircraft companies switched resources to developing ventilators, and logistics firms helped health authorities set up Covid-19 testing centres (ITF, 2020[61]).

Public transport operators adapted operations to maintain services during the crisis. In many cities, buses and trains continued operating with reduced maximum capacity to allow physical distancing. They quickly installed plastic barriers to ensure separation and protection of bus drivers and other transport personnel. Operators suspended the on-board sale of tickets and front-door boarding to reduce exposure. Floor markings and other forms of signposting helped to communicate distancing requirements (McArthur and Smeds, 2020[62]; UITP, 2020[63]).

Transport workers were on the front line of the pandemic. Transport sector employees served medical and hospital staff and other vital workers during the pandemic, despite the greater exposure to health risks for themselves. Covid-19-related death rates among transport workers have been pronounced (ILO, 2020[64]), with data from some cities indicating a disproportionate impact on minorities. In London, 36 of the 44 transport workers who died of Coronavirus as of August 2020 were non-white (TfL, 2020[65]).

Covid-19 hit different parts of the transport sector in different ways. The main highlights of the pandemic’s impact are summarised here, specifically on urban passenger travel, non-urban passenger travel and freight transport. They are examined more fully in Chapters 3, 4, and 5. An at-a-glance summary is provided in Table 1.1 below.

Urban transport has been transformed by the pandemic, notably due to confinement and record numbers of people working from home. In the United States, approximately 48% of the workforce worked from home, and 42% in the European Union (Sostero et al., 2020[66]; Bloom, 2020[67]). However, this applied primarily to higher-paying knowledge-sector jobs. Public transport and shared mobility faced some of the most significant challenges in their history during the pandemic due to a dramatic drop in the number of users, reduced service frequencies, suspended routes and the need to adapt to social distancing rules and sanitation requirements. Urban residents worldwide turned to walking, cycling and micromobility as public authorities fast-tracked temporary measures to encourage and facilitate this pandemic response.

The post-pandemic recovery provides a unique opportunity to encourage more active travel as part of economic recovery packages that fast track the deployment of fleets of cleaner private, shared and public transport vehicles. Looking further ahead, land-use planning and transit-oriented development must play a more significant role to ensure a sustainable urban model, regardless of potential future shifts in housing choices as a result of continued teleworking. If teleworking continues at significantly high rates, it may trigger a decentralisation of the city. Such a decentralisation does not necessarily imply more travel and higher emissions, though. Smart solutions and neighbourhood-centric development connected by a public transport network adapted from the traditional radial, peak-hour service can help cities achieve a more equitable and sustainable future. New forms of mobility can be effectively integrated into this public transport system, complementing it and rounding out a multimodal urban transport offer. Chapter 3 discusses these opportunities in greater detail.

Non-urban passenger transport fell dramatically during the pandemic, with long-distance travel particularly hard hit. Strict international travel restrictions and border closures reduced air travel by 94% worldwide in April 2020 compared to April 2019 (IATA, 2020[68]). The tourism sector and business travel were severely affected and subdued. Activity on regional and intercity bus and rail routes also dropped massively. The financial consequences for bus operators, in particular, could have significant negative impacts on social equity since bus travel is often the most affordable long-distance option. Support packages will be vital to help the longer-distance travel industries recover. Support must be carefully designed to aid a transition to more sustainable non-urban travel rather than returning to business as usual. Economic stimuli also provide an opportunity to invest in research, development and deployment of cleaner aircraft, road vehicles and fuels. Chapter 4 explores non-urban passenger transport in more detail.

The pandemic has underscored the vital role played by freight transport. The drop in freight demand was much more moderate than passenger travel. In some regions, home deliveries and e-commerce increased during the pandemic. For example, the United Kingdom saw a 50% increase in demand (Office for National Statistics, 2020[69]). The need for reliable supply chains in the face of closed borders forced the sector to adapt rapidly to keep essential goods flowing. Functioning supply chains are often taken for granted and their complexity, invisible to the average consumer, is rarely appreciated. This changed during the pandemic; the workers and companies that kept essential equipment running and vital goods flowing all of a sudden caught the public’s attention.

This visibility boost could move freight transport higher up the list of public priorities, which could help accelerate the transition to cleaner goods transport. Low-hanging fruits in freight decarbonisation include ending fuel subsidies and incentivising the use of alternative fuels or deploying digital and automated technologies faster. Relaxing the just-in-time paradigm would enable better consolidation of loads and increase load factors. Speed reductions would better support multimodal solutions and thus create a less carbon-intensive supply chain. Chapter 5 expands on these concepts in greater depth.

How the pandemic will ultimately change the mobility of people and the transport of goods is still uncertain. It is already clear, however, that Covid-19 will have long-term effects on our transport systems as a result of changes in behaviour, changes in business models and as a result of government intervention. To what extent these factors will bring about positive economic, environmental and social results will largely depend on governments’ commitment to policies that set the right priorities and offer the right incentives. Policies to reboot the economy and strengthen the resilience of transport networks can at the same time address environmental challenges and social inequalities – if they are designed and implemented well (Buckle et al., 2020[31]).

The right policies can consolidate progress towards sustainable transport made during the pandemic. The shift to active travel and micromobility in cities can be made permanent by allocating space for the safe use of these modes. More remote working can contribute to fewer commuting trips, and teleconferencing can limit the need for business travel. Reinforcing these trends can support sustainability goals. A the same time, countervailing trends such as the decline in public transport use and the rise in e-commerce could set back such efforts and should be contained.

Several economic stimulus packages target climate change through investments in transport. European governments have approved a stimulus package that earmarks nearly one-third of the budget to climate action, the largest amount ever allotted. It includes funds to stimulate the market for low and zero-emission vehicles and to develop energy resources (Krukowska and Lombrana, 2020[70]). The Next Generation EU recovery strategy, which aligns with the European Green Deal announced in 2019, calls for rolling out cleaner and more affordable public transport. South Korea plans to use its recovery instruments to expand its green mobility fleet (OECD, 2020[71]). The People’s Republic of China will invest in electric vehicle chargers and support new renewable energy plants (Krukowska and Lombrana, 2020[70]). South Korea, Japan and China have all pledged to work towards carbon neutrality by 2050 (Carbon Brief, 2020[72]). The ASEAN Comprehensive Recovery Framework underlines the need to advance towards a more sustainable and resilient future, including strengthening transport connectivity (ASEAN, 2020[73]).

Most stimulus funding will not help the climate, however. Instead, most packages will reinforce current, environmentally harmful trends (Vivid Economics, 2020[74]). The G20 countries have pledged USD 12.7 trillion towards post-pandemic economic stimulus as of December 2020. Yet, most of the funds support fossil fuel-based activities in the highest-emitting sectors, including agriculture, industry, waste, energy and transport (Vivid Economics, 2020[74]). Some governments use recovery packages to roll back environmental regulations and taxes and invest in fossil-fuel intensive energy and infrastructure projects (OECD, 2020[75]).

To ensure an equitable recovery, governments must look beyond the dominant narrative of economic growth. While up to the 1980s, GDP growth resulted in rising living standards, since then it is no longer correlated with improvements in well-being and equality (OECD, 2020[6]). The transport sector must play its role in supporting the economy and creating jobs. It also bears responsibility for ensuring that prosperity, job opportunities and the quality of work are shared in ways that improve lives rather than entrench inequalities (Ibarra et al., 2019[40]). Public funding and government support are crucial for the financial sustainability of transport after the Covid-19 crisis and will remain so for some time. In particular, it will define the transport sector’s ability to pursue the transition to sustainable and equitable mobility. It is vitally important that governments refine their plans for economic recovery to enable this future.

The shape of human settlements and the patterns of transport demand they create are key to developing sustainable transport policies. Population projections see urbanisation continuing in the future. But it will not take place uniformly across all regions. The specificities of how urban demographics develop will have important impacts on the provision of transport services, whether that population growth results in densification or expansion of the city.

Population growth and urbanisation will shape transport planning and investment. The global population continues to grow, which will have implications for transport policies and investment over the next 30 years. The world’s population is projected to reach 9.7 billion people by 2050, up from 7.7 billion in 2019 (UN DESA, 2019[76]). At present, nearly 4.4 billion individuals live in urban areas around the world (Figure 1.5), with approximately 3.4 billion estimated to inhabit rural areas in 2018 (UN DESA, 2019[77]). By 2050, the urban population is projected to increase to almost 6.7 billion people, or 68% of the world’s population. The rural population, on the other hand, is expected to peak and decline slightly to 3.1 billion by that time (UN DESA, 2019[77]).

Growing populations will put pressure on policy makers to meet increasing travel demand sustainably. Cities will need to integrate their transport policies with development planning to ensure they are easily navigable using sustainable modes. Sub-Saharan Africa will be the region with the highest urban growth rate over the next 30 years, with the urban population increasing by a factor of 2.7 (Figure 1.5). By 2050, Sub-Saharan Africa will be home to 20% of the world’s urban population, up from 11% in 2020. Middle Eastern and North African countries will see the second-largest growth, with urban populations increasing by 60%. Asia will follow, seeing growth of close to 50% in total compared to 2020.

For regions with no significant population increase, measures should focus on encouraging and supporting more sustainable travel choices among residents and visitors. Some urban populations are expected to shrink. Authorities in these cities will need to plan for the impact on their funding capacity (OECD/European Commission, 2020[78]). Regions such as the European Economic Area (EEA) including Turkey, as well as the transition economies of the former Soviet Union, will see smaller increases over the next three decades, with population growth rates lower than before the last global recession and during the subsequent recovery. Projections see urban populations there roughly 13% above current levels by 2050.

The future shape of cities will be crucial for the sustainability of transport. Urban areas around the world are not growing uniformly. Cities with increasing population density accounted for more than half of urban population growth between 1975 and 2015 (OECD/European Commission, 2020[78]). Other cities are expanding their footprint. In most cities that recorded a growing number of inhabitants between 2000 and 2015, population growth was faster in the commuting belt, suggesting a trend towards decentralisation of the city (OECD/European Commission, 2020[78]). Expansion and decentralisation both have implications for the type and location of transport infrastructure those cities need and the scale of investment required to deliver it. Public transport, for example, is often the backbone of a sustainable transport system but is generally more cost-effective in high-density regions. Cities that increased the area over which infrastructure and services must be provided up to 2015 were predominantly located in low-income or low-middle income countries (OECD/European Commission, 2020[78]).

The Covid-19 pandemic may have an impact on urbanisation trends. There are indications that the pandemic has encouraged people to relocate out of cities to areas with more space (Haag, 2020[79]; Thomson Reuters Foundation, 2020[80]; Moody's Analytics, 2020[81]; OECD, 2020[82]). However, it is too early to know whether this will become an established trend. To a large extent, this will depend on how long the pandemic lasts and the degree to which practices like teleworking will prevail after restrictions are lifted. As an example, the Irish government published a National Remote Working Strategy in January 2021, prompted by the changes seen during the pandemic (Department of Enterprise, Trade and Employment, Ireland, 2020[83]; Government of Ireland, 2021[84]).

Women generally have more complex travel patterns than men. Their trip purposes often vary, happen outside peak hours and regularly combine multiple trips (“trip-chaining”) (ITF, 2019[86]). Despite this, women are less likely to own a car (Duchène, 2011[87]). Women outnumber men in most regions and will continue to do so in the next 30 years (Figure 1.6). Transport planning practices have not always accounted for the variation in transport needs observed between men and women, however (Duchène, 2011[87]; ITF, 2019[86]).

Transport policies that do not reflect women’s needs limit women’s access to employment opportunities, to travel services and to other essentials. Women have a higher share of trips for domestic or care-based purposes (e.g. travel related to family or to providing food), to non-work locations and at non-standard times. Women are also more likely than men to be in part-time employment, in which case even their commuting trips do not follow the same peaks as the “standard” transport planning observations (Duchène, 2011[87]).

Safe and secure transport options are critical to influencing women’s travel patterns and mode choices. Safety concerns are often cited as the biggest deterrent for women to not use certain transport options, notably public transport, taxis, shared mobility, cycling and walking. This is an important consideration in the planning of public transport services and infrastructure to ensure that public transport is also appealing and functional for women (Duchène, 2011[87]; ITF, 2018[45]; ITF, 2019[88]).

Improving the representation of women in the transport workforce can help create more inclusive policies and transport systems, especially where women occupy decision-making roles (Ng and Acker, 2020[90]). Improving transport sustainability and equitability includes increasing the diversity of the transport workforce and improving the quality of its work (Ibarra et al., 2019[40]). Studies show that women are critical economic agents capable of transforming societies and economies by challenging the dominant male norms. Women have been shown to make more sustainable decisions, which makes gender parity in decision-making roles critical to the decarbonisation of the transport sector (Kronsell, Smidfelt Rosqvist and Winslott Hiselius, 2016[43]). Increasing the representation and visibility of women at all stages of transport policy, planning, implementation, and usage of transport projects make transport more responsive to the needs of all users (Fraszczyk and Piip, 2019[91]).

Better decision making requires better data. Data on trips that include demographic information give transport policy makers and planners a clear picture of the difference in travel habits between different groups in society and help to improve planning decisions. Such data are not always available or sufficiently granular to understand the travel habits of different demographic groups and model the potential societal impacts of policies on them. Box 1.3 discusses recent ITF work on this concerning women and transport.

Accessibility-oriented policies will encourage sustainable mobility choices among older citizens. Policy makers will need to consider the shifting mobility needs of a growing proportion of older transport users in many regions to ensure they maintain levels of accessibility in the future (OECD, 2001[93]; Frye, 2011[94]). Accessibility is important to support social interactions and help reduce the risk of isolation among older people (Frye, 2011[94]). It is also necessary to access essential services, such as health care and food supplies. The number of people in the global population aged over 65 years has more than doubled in the last 30 years. It is set to double again between 2020 and 2050. This represents an additional 821 million more people in 2050 aged over 65, with that age segment growing faster than any other group. This is becoming a more urgent issue in some regions than others (Figure 1.7). In Europe, the over-65 age group is the only cohort that is projected to grow in size between 2025 and 2050. By that year, it will make up nearly a quarter of the region’s population (UN DESA, 2019[95]). In the OECD Pacific countries, their share will exceed 30% (Figure 1.7). Sub-Saharan Africa, on the other hand, has a very young population and although the over-65 age group will double by 2050, it will still make up less than 10% of the population.

Policy makers will need to consider the shifting mobility needs of a growing proportion of older transport users in many regions  
        

Public transport that is high quality, accessible and serves destinations older people wish to reach is important (WHO, 2007[96]; OECD, 2017[97]). As with differences in transport patterns observed by gender, older citizens’ needs are not always served by conventional transport planning (WHO, 2007[96]). Seniors who can drive are likely to wish to continue as long as possible (OECD, 2001[93]). However, a large proportion of those over 65 also suffers from impairments that can reduce their mobility (OECD, 2001[93]; OECD, 2017[97]). The decision to retire from driving means is linked to available alternatives that ensure continued mobility and thus social interaction (OECD, 2001[93]; Metz, 2011[98]; Schwanen and Páez, 2010[99]).

Affordable transport options are important for ageing communities (WHO, 2007[96]). An ageing population can have implications for public transport funds regarding the possible use of fares and ticketing policies, like concession fares, to support mobility-related aspects of well-being as people age (Metz, 2011[98]). However, proper analysis of planned policies must ensure they are the most effective use of funding for improving transport outcomes and reaching those who are most in need (Frye, 2011[94]).

A perception of safety is an important consideration for older users’ transport choices (OECD, 2001[93]; WHO, 2007[96]). This relates to physical safety and security when using public transport (WHO, 2007[96]) as well as road safety (OECD, 2001[93]). Public transport use by seniors can be encouraged through accessible vehicles, stops and stations, and by enhancing attractiveness and comfort. Improving the built environment and vehicle technology can support better road safety for older drivers, cyclists and pavement users (OECD, 2001[93]; WHO, 2007[96]).

Land-use planning policies that ensure proximity to essential services allow citizens to grow older in their own community without sacrificing their independent mobility (OECD, 2017[97]; OECD, 2001[93]; WHO, 2007[96]; Frye, 2011[94]). Neighbourhoods with a range of housing options, intergenerational communities, and easy access to essential services and social life create opportunities to better support an older population (WHO, 2007[96]).

The extent of the pandemic’s impact on the economy and transport activity is extremely difficult to gauge. Estimates at the time of writing projected falls in GDP of between -7.6% and -3.4% in 2020 (Table 1.3). This section sets out the projections for the economic impact based on 2020 estimates which fed into the assumptions for the modelling in the ITF Transport Outlook and discusses the implications of these trends for transport.

The latest OECD Economic Outlook Interim Report published in March 2021 offers a more optimistic picture of global economic recovery than previous projections. However, it maintains that the decisive factors for the ultimate path are vaccine rollout and the potential emergence of variants of the coronavirus. The modelling results for transport demand and emissions are thus a function of very uncertain economic projections. A what-if analysis that contrasts results under the assumed economic lag due to Covid-19 and under pre-pandemic economic patterns is illustrated in Figure 2.11 in Chapter 2.

Whether considering projections from 2020, as used in the ITF models, or the latest March 2021 values, they are all still lower than pre-pandemic (2019) projections for a given year. When interpreting the results of this report its should be kept in mind that if actual GDP growth is higher than assumed in the models (Table 1.4), transport emissions would lie between the two what-if scenarios - higher than those given in this report, but lower than the pre-pandemic scenario. If future economic growth surpasses the rates projected in 2019, emissions could be expected to be even higher than the pre-pandemic scenario.

The global economic downturn due to Covid-19 has reduced transport demand. Higher GDP is generally linked to a growing demand for transport. While there is a drive to decouple transport demand from GDP growth to enable decarbonisation in an economic growth context, it is still linked, especially to demand for international transport. In mid-2020, a global GDP rate of -7.6% was expected in 2020, with OECD countries to suffer more significant declines (-9.3%) than Non-OECD countries (-6.1%). By December 2020, estimates were less severe, with the global GDP rate at -4.2%, and by March 2021, the impact was expected to be -3.4%. The Euro area was anticipated to suffer the largest decline, with a drop in GDP of -11.5%, adjusted to -6.8% in the March 2021 projections. In most regions, the GDP rate is expected to return to growth in 2021 (Table 1.3). Notably, China’s GDP rate remained positive in 2020 based estimates in March 2021, contrary to initial projections, and is expected to continue growing strongly.

Growth rates are slower than projected in 2019, but the trends seen then are set to continue. Based on the OECD (2020[100]) and IMF (2020[101]) projections in mid-2020, the compound annual GDP growth rate (CAGR) was assumed to be 2.2% for the 2015 to 2030 period (OECD, 2020[102]) in the ITF models for this Transport Outlook (Table 1.4). This is down from the projection of 3.3% in the previous Transport Outlook (2019[103]). It is expected to improve, resulting in a CAGR of 2.6% over the 2015-50 period (OECD, 2020[102]). The OECD figures reflect a “double hit” scenario, which includes the second wave of infections at the end of 2020.

Output is not anticipated to return to pre-pandemic levels in 2021 unless vaccine production and distribution improves (OECD, 2021[104]). Vaccine rollout remains uneven between countries and continues to have an unequal economic impact on different sectors. Initial analysis, before the second Covid-19 wave hit, saw year-on-year retail sales of domestic goods, health-related goods and clothing growing again by August 2021 in many countries. But sales were still projected to be down for activities that would tend to generate trips or constitute a trip themselves, such as activities, holidays, travel and events (OECD, 2020[105]). The tourism sector and tourism-dependent economies are projected to take a particularly strong hit as a result of travel restrictions and lingering reticence among consumers to travel internationally during a pandemic (IMF, 2020[106]; OECD, 2020[107]).

Global merchandise trade was hit more strongly when the pandemic struck than by the 2008 financial crisis, based on preliminary data (UNCTAD, 2020[108]) (ITF, 2020[109]). Supply chain disruptions led to factory closures and the shutting down of assembly lines. Freight transport in 2020 is estimated by ITF to have been -6.7% below 2019 levels. ITF models for this Transport Outlook assume a five-year loss of trade activity, roughly in line with the initial WTO optimistic scenario (WTO, 2020[110]).

The ultimate impact of the pandemic on trade is still unclear. At the time of writing, a strong worldwide decline in trade of -9.2% is expected for 2020, followed by a 7.2% rebound in 2021 (Table 1.5). This represents an improvement on initial forecasts early in the pandemic, when the hit to trade was projected to be closer to -20% (WTO, 2020[111]). The greatest drop is expected for North American exports (-14.7%), followed by Europe (-11.7%). Imports are projected to decrease noticeably in South and Central America (-13.5%) and Europe (-10.3%). Between 2015 and 2030, the compound annual merchandise trade growth rate worldwide is expected to be 2.4%, rising to 2.7% over the longer term to 2050 (Table 1.6). This is down from 3.4% and 3.2% projected for those periods before the pandemic (ITF, 2019[103]). Compound annual growth through to 2030 in the Asian region is expected to see the strongest growth in exports (3.8%). However, in the long run, SSA is expected to have a stronger growth rate with a compound annual growth rate of 5.2% through to 2050.

Prices for natural gas, energy, coal and petroleum have been on a downward trend since 2018. The Covid-19 pandemic, and the resulting impact on demand for oil, caused the OPEC+ group of countries to introduce restrictions on production that will last until April 2022. Producers in the United States also reduced supply. As a result, oil prices recovered somewhat but not to the level seen in January 2020 before the restrictions (IMF, 2020[106]). Oil prices have a particularly significant impact on the transport sector. Price fluctuations can influence travel behaviour and investment in alternative fuels, which in turn influences CO2 emissions from the transport sector.

The disruption caused by the pandemic perpetuates uncertainty around transport demand and oil prices (IMF, 2020[106]). From the perspective of oil demand, road traffic did bounce back after the first travel restrictions. However, the effects of the pandemic continue to be felt in the air travel industry, suppressing demand for oil from that sector.

  • Transport is inextricably linked to the most critical issues of our time, climate change and social equity. It must play a central role in policy agendas that address them in a well-aligned way.

  • The Covid-19 pandemic has severely impacted the economy and transport demand. It remains uncertain what the pandemic’s long-term impact on future economic growth and transport activity will be.

  • Pandemic recovery offers a singular chance to accelerate initiatives to mitigate global warming and help achieve the UN Sustainable Development Goals.

  • Covid-19 recovery packages must align economic recovery with policies that combat climate change and strengthen equity.

  • The decarbonisation of transport depends on other sectors as well. Collaboration is imperative.

  • Transport policies must focus on increasing accessibility, not simply accommodating more travel.

  • Urbanisation will continue, but not evenly. Transport policy makers and land-use planners will need to integrate their processes to ensure sustainable, accessible cities.

  • Transport policy, planning and design must take an inclusive approach to address the specific travel needs of women, seniors and other groups overlooked in the past.

  • Better data is needed to inform inclusive policy-making and transport planning.

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