Energy Transition

How cities can accelerate the energy transition

London, Beijing and New York lead the way in managing congestion and its side effects

In this complimentary insight, Alan Gelder, VP of Refining, Chemicals & Oil Markets, examines how cities around the world are responding to air pollution as a result of road transport. Get the highlights below or fill in the form to get the full insight.

What's inside this insight?

  1. How policy and infrastructure influence electric vehicle ownership in urban areas
  2. Why cities shouldn't focus only on encouraging drivers to switch to electric
  3. Why a one-size-fits-all policy isn't the answer

One size won’t fit all. And we’re seeing that in the different approaches cities are taking as the transition gets under way.

Can large metropolises drive environmental change?

Out of the exhaust fumes of slow-moving traffic, a number of major cities are aiming to become catalysts for the energy transition – speeding up the move away from fossil fuels and using technology to become a catalyst for sustainability.

Urban residents vote with their feet

Cities play a prominent role in our society as our economies shift away from labour-intensive industries towards services, education levels continue to rise and our world becomes ever more urban. Improving the living standards of city dwellers is paramount for local governments. 

Unfortunately for those city dwellers, dirty air is the natural outcome of the topography of most cities. Vehicle exhaust fumes are emitted in narrow corridors with buildings restricting air flow and the dissipation of the emissions. Traffic congestion has been a major challenge for cities for many years.

As urban residents grow more concerned – and more vocal – about the effects of pollution and traffic congestion on their lives, local governments, in London and New York City, for example, are redoubling their efforts to manage congestion.

How traffic management drives wider improvement

Traffic management to resolve congestion is a key driver of wider improvements and is a catalyst for accelerating the energy transition in the following ways: 

  1. Congestion is managed by monitoring road access and levying fees for road use, particularly in key areas of a city.
  2. These fees cover the cost of the infrastructure investment and its operation.
  3. Congestion fees also often generate a cash surplus, as the congestion charges need to be sufficiently high to change behaviour.
  4. These surpluses are usually allocated to improve the public transport infrastructure. Commuters aka voters will only accept congestion charging if there's a viable transport alternative. 
  5. The funding surplus from a congestion charge enables wider policy options to be explored, such as lower fees for cleaner vehicles.
  6. The congestion charging infrastructure, once in place, becomes a platform to address urban air quality as it enables the deployment of low-emission zones, in which high-emission vehicles are charged a fee to enter the city.
  7. Low/zero emission vehicles can be exempt, which supports electric vehicle (EV) adoption. While EVs are not truly emission-free across their life cycle, the urban dweller is primarily interested in tailpipe emissions, as the power to supply the electric vehicle is typically generated a distance away.

London leads the way by influencing consumer decisions 

London is leading the way in initiating the process above – there is now an emissions charge covering the city centre with plans to extend this to one of its inner orbital roads in the next two years. To date, these policies have resulted in the London and the UK’s south-east having a disproportionate share of the UK’s EVs. The policy on air quality is technology agnostic. It is to promote lower-emission vehicles, not specifically EVs, as the latest diesel passenger cars fall into this low-emission category. Consumers are nudged to make decisions around faster vehicle replacement. A logical outcome of advancing the purchase decision of a vehicle is that more will be electric, so supporting a faster transition. 

Public acceptance of these new policies is key, which makes investment in public transport vital for those who can no longer afford to use their existing vehicle

How Asian cities are electrifying transport 

China’s approach is somewhat different, but also centres on mitigating congestion. For Beijing and other major metropolises, a licence is needed to purchase a vehicle with an internal combustion engine. These licences are limited and expensive, with some even subject to allocation by lottery. EVs suffer no such restrictions, so more than 80% of China’s EVs are deployed in the country’s top 30 cities.

Other Asian cities are promoting EV adoption through the rapid deployment of charging infrastructure

India has a strong desire to tackle urban air quality. There are incentives to encourage a switch to electric vehicles, with a key focus on the two-wheeler sector, which currently accounts for 60% of India’s current gasoline demand. These scooters are used for commuting and their batteries can be charged at home, dispensing with the need for charging points. 

Public acceptance of these new policies is key, which makes investment in public transport vital for those who can no longer afford to use their existing vehicle. Buses and urban freight movements cannot be forgotten, particularly with the rise in e-commerce.

Electrification of the vehicle fleet in cities will solve many urban air-quality issues, but we may, in future, simply uncover another health issue. However, environmental policy is inevitably an incremental activity, involving chipping away at the prevailing issue before moving to the next.

Cities keen to improve the health of their local populations can be key to accelerating EV adoption. Cities have the opportunity to lead the transformation and demonstrate success ahead of national commitments, many of which are too slow to address the challenges of climate change.

Get your complimentary copy of the  insight to discover:

  • How policy and infrastructure influence electric vehicle ownership in urban areas
  • Why cities shouldn't focus only on encouraging drivers to switch to electric
  • Why a one-size-fits-all policy isn't the answer

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