25 May 2021
What Does the Global Future Hold?
International Resource Panel Webcast Series – Tuesday 25th May 2021
By David Ward, President of the Towards Zero Foundation
I am very grateful to UNEP’s International Resource Panel to contribute to their webcast series ‘What Does the Future Hold?’. It is also a privilege to follow such a distinguished economist as Professor Jeffrey Sachs who has made a huge contribution to the field of sustainable development. My subject area is transport and mobility. Today I want to focus on the future of the motor vehicle. But as Neils Bohr, the Nobel laureate in Physics, observed, “Prediction is very difficult, especially if it’s about the future”. So, I’m going to highlight the transitions and policies I think we need to make motor vehicles part of a future of safe and clean mobility.
Firstly, I would like to briefly introduce the Towards Zero Foundation. We are a UK based charity working internationally on sustainable transport. We strongly support progress to achieve zero road deaths and zero emissions by 2050. We are motivated by the human tragedy of lives lost to both road traffic deaths and air pollution. We endorse the necessity of implementing the 2016 Paris climate change agreement and the 2030 Agenda of Sustainable Development Goals.
With invaluable support from Bloomberg Philanthropies and the FIA Foundation, for the last ten years we have managed the Global New Car Assessment Programme, which has promoted independent consumer rating of motor vehicles. This experience, I believe, gives us a unique insight into the future of the motor vehicle as we seek decisive progress towards safe and clean road transport by 2050.
In the first 20 years of this century over 1.4 billion new automobiles have been produced. In 2017 the world’s highest ever level of production was recorded at over 97 million vehicles. The total global vehicle fleet – automobiles in use – is also the highest it’s ever been, estimated to have passed 1.3 billion in 2016. Since the 1970’s the global fleet has roughly doubled every twenty years. It is important also not to overlook motorcycles which remain a very dominant form of motorized transport especially in Asia. Annual motorcycle production now exceeds 100 million and the global fleet is over 1.1 billion; 81% of which is used in the Asia/Pacific region.
This relentless growth in four and two wheeled motor vehicles has continued through two major interruptions already this century: the 2009 financial crisis and the current COVID 19 pandemic. The financial crisis resulted in a short lived but steep reduction in vehicle sales that quickly reversed in a classic V shaped recovery. COVID has caused a steeper fall than in 2009 but again it looks like there will be another V shaped recovery albeit over a longer period.
So, despite these twin global shocks we are still experiencing the highest level of motorisation the world has ever seen. This robust performance has defied those who predicted the decline of the auto-industrial age. For example, in 1974 the economic historian, Emma Rothschild, suggested in her book ‘Paradise Lost’ that the “auto-industrial complex is no more than a temporarily dominant but mortal mutation of economic evolution”. 47 years later the dominant role of the automotive industry seems unstoppable. Regardless of how much we may wish it so, globally there is really no evidence at all that we have reached a ‘peak car’ moment.
Often overlooked is the radical shift in the geography of automobile production over the last two decades. Today the business of building motor vehicles is mainly carried out in middle-income countries. Eleven out of the top fifteen vehicle producers are now based in these emerging markets, in which numbers of automobiles per thousand people are far lower than in the mature markets of high-income economies. Still growing demand for motorized mobility in middle income countries is a major feature of today’s auto industrial complex. This represents a huge challenge for everyone interested in pathways toward sustainable transport.
To help frame policy priorities for the next decade, TZF has prepared a set of three global vehicle production scenarios to 2030 which take account of the COVID 19 related decline in production that has occurred in 2020. These are: ‘Business as Usual’ in which post-pandemic production returns to the previous annual growth trend of 2.9%; ‘Zero Growth’ in which production levels remain flat at the level achieved in 2019; and ‘20% Decline’ in which a significant drop in production occurs through reduced car dependency.
The outcomes of these three scenarios are striking. By 2030 the number of new vehicles taking to the world’s roads could be as much as 1.4 billion with ‘Business as Usual’, 971 million with ‘Zero Growth’, and 858 million with ‘20% Decline-reduced car dependency’.
Whichever scenario turns out to be closest to reality, one thing is already clear; over the next decade hundreds of millions of new vehicles will be joining the global fleet. Clearly ‘Business as usual’ will threaten our ambitious vision for 2050. To achieve zero road deaths and emissions we are going to have to simultaneously improve the quality of the global fleet and reduce car dependency. But how can we achieve this?
We need to launch what we are calling #MissionZero2050. We need a fundamental change of direction that aims to eliminate traffic deaths from both crashes or pollution and reach carbon neutrality by 2050. Echoing Martin Luther King’s powerful phrase, the ‘urgency of now’, we must take decisive action now. We need a quantitative and qualitative transition towards safe and sustainable transport. And to achieve #MissionZero2050 we need to take irreversible steps in the decade ahead.
Last year the UN General Assembly approved a new Decade of Action for Road Safety with a target to halve road traffic deaths and injuries by 2030. Last week the International Energy Agency released its road map to achieve Net Zero by 2050. Their key milestones include 60% of global car sales becoming electric by 2030 and an end to new internal combustion engine car sales by 2035.
For sure we are facing the greatest disruption to our road transport system since the origins of mass motorization over one hundred years ago. The end of the ICE age dawns, and an annual road crash death toll of 1.3 million is now widely recognized as unacceptable and avoidable. Despite the daunting scale of change we face there are grounds for optimism. The technologies required are already available and the policy framework needed is quite well known.
It is the ‘Avoid/Shift/Improve’ paradigm which was originally developed in Germany in the mid-1990s. Based on three pillars; firstly, to avoid risky and polluting travel; secondly, to encourage a shift towards less dangerous and polluting travel modes; and thirdly, to mobilize technology that improves the safety and environmental performance of road transport.
We also need a more human centered approach which inverts the traditional car-centric hierarchy that has dominated the thinking of transport planners for too long. The combination of improved street design, lower speeds, and better modal choice are essential to reduce car dependency. Giving primacy to the most vulnerable road users is a new imperative that can power up the ‘Avoid/Shift/Improve’ paradigm. Recognizing human vulnerability to the risk of injury is also at the heart of the safe systems approach to reducing road fatalities. The application of ‘systems thinking’ in sustainable transport is critical because it promotes holistic structural adaptation that is most likely to succeed in making our mobility safer and less polluting by design.
Among some advocates of ‘Avoid/Shift/Improve’ there is, however, sometimes a reluctance to fully embrace the third pillar. There is a nervousness that technology improvement will undermine the other pillars. Concerns are expressed about the risk of unintended consequences of efficiency improvements brought about by technological innovation. This is known as the Jevons paradox, named after the English economist, who in the 1860s observed that more efficient coal use led to increased demand. And there is some evidence that increased vehicle fuel efficiency can cause similar rebound effects.
Another worry is the risk that sustainable transport falls prey to the excessive hype of so-called techno futurists. Unfortunately, this tendency has been much in evidence in the wildly over optimistic claims about the imminent arrival of driverless cars. Too often automated vehicles have been offered as a kind of silver bullet that will simultaneously solve all the challenges of sustainable road transport.
Fortunately, the complex challenges of delivering AVs at scale in real world conditions is leading to a more realistic appraisal of their potential to solve real world problems. For now, the urgent challenges of road injury, air pollution, and climate change will be tackled by today’s known best available technologies which are far from fully deployed across global markets. In my opinion the positive impact of AVs remains largely unproven, and even if established, would be close to zero in the decade ahead.
Rather than dismiss or exaggerate the impact of technology improvement, we need an approach that is realistic and positive. Nor should technology improvement be seen in isolation. After all it can directly help to avoid unnecessary transport and promote modal shift. The technology enabling this webinar and millions of other online events is proof positive of its ability to avoid travel and shift behaviour. The challenge is to balance the mix of policy instruments so that the full benefits of technologies are realized. For example, if rebound effects of improved fuel efficiency are shown to be significant then other policy measures should be applied to curb consumption, such as ‘pay as you go’ road pricing. This kind of demand management must be an integral part of the ‘Avoid/Shift/Improve’ paradigm. And as the market share of electric vehicles surges – as night follows day – fiscal authorities will be looking afresh at road pricing to compensate for the reduced revenue from fuel duties.
For the Towards Zero Foundation promoting technology transition will be a key focus of our work over the next decade. Our production scenarios show why. Even a 20% reduction by 2030 will see over 800 million new vehicles take to the world’s roads. The immediate future we want is that all of them are as safe and as clean as possible using best available technologies. But this will face many obstacles some of which are due to characteristics of the global auto industry.
Over the last 100 years the automotive manufacturing has suffered from very stubborn path dependency. For a variety of reasons there has been strong inertial resistance to change direction. The dominance of ICE vehicles was established early in the history of the automobile. This has only been disrupted recently by the growing public policy demands driven by the air pollution & climate crisis, and by the self-inflicted scandal of ‘dieselgate’ which exposed blatant disregard for environmental regulations. There has also been an industry-wide practice of deny, deflect, and delay slowing the introduction of technologies for both emissions control and safety. This tendency has been seen again and again in high income countries since the 1960s and is just as negative an influence today in the emerging markets of middle-income countries.
Is it possible to overcome automotive path dependency and accelerate deployment of best available technology? My answer is yes, provided there is clear understanding of how innovation and deployment works – which is not by the traditional model of innovation as a linear path from pure science to products on the market. The reality is a more complex process of feedback loops and dynamic interaction of public policy goals, innovation, consumer demand, and regulation. It simply doesn’t happen by relying on market forces alone. The agent of change is usually the creative energy generated by demand pull and regulatory push.
Our work with Global NCAP has shown how it is possible to accelerate market availability of safety systems by stimulating consumer demand and increasing competition between manufacturers to raise the quality of their products. It is the combination of these market shaping factors, co-created by governments, industry, and civil society, that will stimulate the deployment of the best available transport technologies that are the essential springboard for #MissionZero2050. Incidentally our practical experience, strongly supports the ‘mission orientated’ policy agenda developed by Professor Mariana Mazzucato of the Institute for Innovation and Public Purpose at University College London.
Zero road fatalities and emissions by 2050 is an ambitious vision. But to translate that vision into a reality we need to mobilize a purpose driven mission. This needs the dynamic use of road maps and targets applied though the methodology of back casting. Taking as its point of departure the end vision, back casting asks not what can be done but what must be done to reach the goal. It requires a stronger framework of leadership, commitment, and public & stakeholder engagement. But offers far greater prospect of success.
As a practical example of this approach I would like to take vehicle safety as an example. The World Health Organization has established a set of road safety performance targets that include vehicle safety. They propose that 100% of new and used vehicles meet the most important UN minimum safety standards by 2030. We believe that progress of this magnitude could reduce road traffic deaths by a third. It would shift the trajectory of vehicle safety significantly towards zero using already know best available technologies.
How could we get this done? The decision-making target is not hard to identify. Although safer vehicles are a shared concern for all UN Member States, it is the Group of 20 leading industrialised countries that will be critical to their achievement. The G20 account for 85% of total passenger car sales and host the world’s top ten vehicle producers. They are the countries, therefore, that have the most influence over the automotive market worldwide and the greatest ability to transform the safety and environmental performance of the global vehicle fleet.
But to date there are significant gaps in their approach to vehicle safety. They should all be working together in the UN body that manages global vehicle regulations; they should all be benefiting from consumer testing by NCAPs, and they should all be working to apply the most important vehicle regulations. We, therefore, hope that the Italian Presidency of the G20 and the Leaders’ Summit to be held at the end of October will recognise their unique responsibility to implement the 2030 target for vehicle safety. This would be one important step on the safety side of the #MissionZero2050 agenda.
Much more action is also needed to reduce car dependency and hit net zero carbon. The G20 must take seriously the IEA’s call for 60% EV sales by 2030, and an ICE ban by 2035. There is a powerful case again for a joint agenda of G20 cooperation to promote this historic transition in propulsion systems. As the IEA Net Zero by 2050 report makes clear the electrification of road transport requires further progress in battery development, installation of charging infrastructure, and improvements in grid capacity. There is going to be a lot of improvement going on in the three pillars of ‘Avoid/Shift/Improve’.
G20 leadership is also vital to give a clear but co-operative signal to industry that #MissionZero2050 is the direction of travel they must follow. We must move beyond the culture of deny, deflect, and delay that can give the impression that the auto industry is led by dinosaurs. There are positive signs that this is happening with some major manufacturers now committing to strategies aiming for zero emissions and zero fatalities. Interestingly Volvo recently announced that it will set a maximum speed for all their vehicles of 140 km/h. This is a welcome recognition that building cars capable of speeds far above maximum limits is a gross waste of engineering ability.
But excess capacity is a macro issue for the auto industry too. For if we succeed in reducing car dependency then it is more than likely that volumes of global production will decline. This will be very challenging for industry and governments alike. Pre COVID at the time of record levels of production it estimated that the industry’s plant utilization was running at around 70%. The fact is there is a fundamental structural issue of excess capacity in the auto industry. And this will have to be tackled at the same time the world enters the age of electromobility. To avoid the risk of extinction the automobile industry has no alternative but to restructure and re-engineer as never before.
If the G20 got fully behind #MissionZero2050 where would that leave the motor vehicle? It will be much safer and cleaner; mainly electric, equipped with advanced driver assistance systems make crashes much rarer, automatically follow the speed limit, and mostly still be under the control of a human driver. Pay as you go charging will be widespread and levels of usage will be significantly less as car dependency is reduced. We will enjoy the benefits of living in more human centred, liveable communities where walking and cycling is just as common as driving a car. Overall, the motor vehicle will have a prominent but less dominant role in a much safer and sustainable mobility system. That is the future that I hope #MissionZero2050 will bring.