Four Unexpected Champions of the Clean Transportation Revolution

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Greenhouse gas emissions from the transportation sector are growing faster than those from any other sector. With the transportation sector already accounting for nearly one-quarter (23 percent) of greenhouse gas emissions worldwide, investing in public transportation is a critical strategy to address global climate change.

Strategies to curb transport emissions, such as by transitioning to electric vehicles, depend primarily on pushing forward new efficiency-maximizing technologies for transportation networks and individual vehicles. Yet adoption rates have been slow, in part because vehicle owners and transportation providers lack the resources to finance the transition of their fleets.

How Can the Transportation Transition Begin?

Creative financing for the transport sector can be adapted from existing efforts to improve energy efficiency in buildings. The building sector has benefited from the involvement of ESCOs, or businesses that fund and install energy-saving equipment, charge the building owner a fee to pay back for this installation, and guarantee that the costs will not exceed the financial savings associated with the new product or system.

Who Could Champion the Shift?

A T-ESCO requires a handful of direct stakeholders, including: an entity interested and willing to play the part of the ESCO; a client or fleet manager interested in reducing energy consumption; and an investor willing to fund the program (see figure). However, a host of stakeholders at the periphery also stand to benefit from the development and proliferation of T-ESCOs. These stakeholders could champion the implementation of cleaner transportation systems.

Four unexpected champions of the clean transportation revolution include:

  1. Electricity producers and distributors: The conversion of transportation fleets away from fossil fuels and toward electricity through T-ESCOs can lead to a significant increase in demand for electricity.
  2. Municipal governments: Apart from the typical benefits of a good transit system and a stabilized grid, electric vehicle fleets funded by a T-ESCO could be integrated into other aspects of urban planning, such as emergency planning and community resiliency.
  3. National finance policymakers: Most countries are net importers of fossil fuels, and a large portion of these imports is spent on transportation.
  4. Environment and climate policymakers: The transportation sector presents a variety of challenges to environment and climate policymakers; for example, it is a major and growing contributor to air pollution, both through conventional pollutants and greenhouse gases.

Read more from Anmol Vanamali and Bethany Whitaker. Anmol Vanamali is the Financing Strategies Director at Vermont Energy Investment Corporation and a Senior Fellow in Climate and Energy at the Worldwatch Institute. Bethany Whitaker is a Senior Consultant in the Vermont Energy Investment Corporation’s Transportation Efficiency Team. Originally published in the March issue on the Worldwatch Institute blog:

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