3. Managing transport demand: Offering attractive choices

Developments in transport systems and accompanying infrastructure will shape cities and communities for years to come, for better or worse. Regardless of the policy scenario, global passenger and freight transport demand will continue growing in the coming decades. This growth reflects changes in economies and populations, partly resulting from ambitions to increase freight and passenger connectivity.

On the passenger side, if authorities do not consider the long-term need for low-carbon transport at the design stages, urban areas and communities will suffer from baked-in car dependency. On the freight side, if the world sticks with its current policy pathway, the emissions associated with freight activities will also continue to grow.

This chapter analyses the drivers of transport demand. Using the popular “Avoid, Shift, Improve” paradigm, it explores the role policy levers aimed at demand management (“Avoid” measures) and mode shift (“Shift” measures) could play in a low-carbon transport scenario. For an analysis of “Improve” measures to reduce transport emissions, see Chapter 4.

The in-house ITF models produce projections for global passenger and freight transport demand over time, under given policy scenarios. According to the modelled outputs for the Current Ambition and High Ambition scenarios considered in this Outlook, passenger and freight transport demand will rise under both policy scenarios (see Chapter 2 for full descriptions).

The demand for passenger transport is grouped into three types of activity: urban (activity within urban areas), regional (domestic travel outside of urban areas), and international and intercity (travelling between two cities, or across international borders).

Urban passenger transport demand will increase under both the Current Ambition and High Ambition policy scenarios explored in this edition of the Outlook (see Figure 3.1). Under the Current Ambition scenario, urban passenger-kilometres grow by 74% between 2019 and 2050. Under the High Ambition scenario, they grow by 54% over the same period. Urban passenger trips are typically shorter than the other activity types and take place in higher-density regions. There are more policy measures to tackle demand management and mode shift available in urban settings when it comes to decarbonising transport. However, urban transport currently only accounts for 36% of transport demand worldwide.

Regional transport grows by only 5% under both scenarios. Regional travel currently accounts for about 35% of transport demand worldwide. However, as it does not grow by much, its share of passenger-kilometres will shrink over time. International and intercity travel accounts for the smallest share of passenger-kilometres in 2019 (at 29%). But it is also the activity type that grows fastest over the coming years and will account for 44% of passenger-kilometres by 2050, under both scenarios.

The trips taking place under the international and intercity activity types are typically much longer on average, and the trip patterns are more dispersed, especially in the case of regional travel. Because of the nature of regional, and intercity and international travel, there are typically fewer well-established policy levers for demand management and mode shift available.

For freight, the vast majority of activity takes place outside of urban areas, both in 2019 and by 2050 and under both scenarios (see Figure 3.2). As with passenger activity, the mode-shift and demand-management tools available at the urban level are harder to deploy outside of urban settings. For non-urban freight (both domestic and international), measures to shorten supply chains (and therefore reduce tonne-kilometres) go beyond just transport policy as they are driven by trade regionalisation. Under both scenarios, international freight accounts for the largest share of transport demand, meaning that regulation and enforcement for many measures will require multilateral co-operation.

Many regions will see their urban areas grow in the coming years as the world urbanises and populations increase. Authorities should act now to prevent those cities from sprawling and becoming car-dependent. In more developed cities, authorities need to revise the traditional planning hierarchies that saw streets and urban environments designed for motorised vehicles at the expense of residents and more sustainable modes.

A strategic and integrated approach to transport and land-use planning will be needed to support sustainable transport decisions in the future. While many different policy approaches exist, a combination of measures will likely be most successful. Demand-management and mode-shift policies are very effective in urban contexts, for both passenger and freight transport. They also have a vital role in urban liveability (see Chapter 5).

Passenger transport demand will continue to increase in all world regions, regardless of the policy scenario. Urban passenger demand will substantially rise in the coming years, especially in lower-middle-income and low-income regions. Fast-paced urbanisation will increase the share of urban residents in upper-middle-income and lower-middle-income regions. However, the most significant increases will occur in Sub-Saharan Africa (SSA), a low-income region where the number of urban inhabitants will more than double by 2050 compared to 2019 levels (SWAC, 2020[1]).

Furthermore, per-capita gross domestic product (GDP) in SSA will almost double, and more than double for East and Northeast Asia (ENEA) and Southeast Asia (SEA), between 2019 and 2050. Based on OECD-ENV and UN DESA data, in South and Southwest Asia (SSWA), GDP per capita will roughly triple over the same period (OECD, n.d.[2]; UNDESA, 2022[3]). This economic growth will bridge part of the income gap between city inhabitants in these regions and inhabitants in developed regions such as Europe, and the United States, Canada, Australia and New Zealand (grouped in this report as the UCAN region).

But it will also heighten the risk of increased private motorised vehicle use (especially cars and motorcycles). A recent World Bank analysis found that an income increase of 10% in 18 non-OECD countries directly correlated with a 17% increase in overall transport consumption. Tellingly, while the rise in public transport use in these countries was a relatively modest 10%, the use of private vehicles increased by 20% (Lebrand and Theophile, 2022[4]).

Urban passenger activity will accelerate faster than urban population growth in most world regions (see Figure 3.3). In the high-income regions of Europe and ENEA, and the upper-middle-income region of LAC, demand grows roughly in line with, or slower than, population growth under the High Ambition scenario. For ENEA, urban population growth outstrips passenger demand growth under both scenarios. UCAN bucks the trend for the high-income regions, with passenger-kilometres growing faster than population growth under both scenarios. The emerging economies also see their passenger-kilometres grow faster than their urban population. However, in all cases, the policies under the High Ambition scenario result in lower passenger-kilometre growth.

As urban populations grow, the risks of urban sprawl and car dependency increase. Urban areas at risk of sprawl are those where 1) the cost of car use is low, 2) the cost of land is lower in periphery areas than in urban centres, and 3) fiscal systems result in net benefits from outward expansion (OECD, 2017[5]). As a result of these settlement patterns, which tend to be more pronounced in the UCAN region, urban areas tend to be continuous (i.e. conurbations), with less discernible boundaries between the peripheries of neighbouring cities, leading to higher car dependency (Mattioli et al., 2022[6]).

The risk of urban sprawl in fast-growing urban areas is even higher in emerging regions. According to previous analysis, doubling a developing city’s population leads to a tripling of its surface area (Angel et al., 2010[7]). Similarly, the modelling for this Outlook suggests that peripheral areas of cities in SEA and SSA with less than one million inhabitants in 2019 will grow to around three times their current size by 2050. One cause of sprawl in these developing regions is the movement of new and existing urban dwellers towards urban peripheries. Private vehicles can be one of the only options for residents in these areas – apart from informal, paratransit services – seeking to access opportunities in central areas (Yiran et al., 2020[8]).

Mitigating the risk of urban sprawl requires strategic planning to manage urban passenger demand and encourage more sustainable mobility behaviour (ITF, 2021[9]). The modelling for this edition of the Outlook highlights the positive impacts that better land-use and transport planning can have on the sustainability of urban settlements. Unlike the Current Ambition scenario, the High Ambition scenario includes transport and land-use planning measures that promote more compact, mixed-use and denser environments. By 2050, under the High Ambition scenario, increases in urban densities will reduce the growth of the physical expansion of city areas.

The approach to urban planning and transport system design assumed in the High Ambition scenario can also decrease transport demand without hampering activity to the same extent, especially in developing contexts. The High Ambition scenario includes transport and land-use planning measures that promote more compact, mixed and dense environments. Under this scenario, trips are shorter than under the Current Ambition scenario, as cities are more compact.

The High Ambition scenario results in a reduction in the average passenger-kilometres per trip in all world regions by 2050 (see Table 3.1), most noticeably in LAC (-15%) and Europe (-14%). By contrast, the average trips per capita reduce significantly less under the High Ambition scenario in 2050. For all regions except Europe (-3%) and UCAN (-4%), the reduction in trips per capita is only around 1%. This decrease is most likely due to the greater prevalence of teleworking in those regions. Despite this, UCAN also has one of the lowest reduction in trip lengths between the two scenarios (-8%), reflecting the already established footprints of cities and the difficulty of implementing compact design policies in these contexts.

Authorities, particularly in cities in developing regions, can use densification policies to address the risk of urban sprawl and dependency on private motorised vehicle. More compact and denser cities allow for the concentration of opportunities close by, making it easier for people to reach schools, hospitals and workplaces (ITF, 2019[10]). Such environments reduce the need for longer trips, thus decreasing passenger-kilometres without decreasing mobility. In addition, mixed-use environments with more job opportunities and residential options can reduce the pressure on public transport networks compared to other neighbourhood types (Guzman and Gomez Cardona, 2021[11]).

On top of these benefits, more compact and mixed-use environments can decrease transport and infrastructure costs in two ways. First, they make it easier for authorities and operators to meet the critical mass required to make public transport operations financially viable. Second, higher density and closer proximity to opportunities reduce per-unit infrastructure costs and increase the efficient use of roads and public transport (Rode et al., 2014[12]).

Building mixed-use and more compact cities entails balancing working populations, available housing and nearby employment opportunities. This might mean creating urban developments with several centres of economic and residential activity, rather than just one main centre gathering all economic activities where people travel to from surrounding residential areas. Barcelona’s superblock model is a good example. Each 400m2 neighbourhood block concentrates residential and economic opportunities allowing people to live, work and move around easily using active and sustainable mobility modes (Postaria, 2021[13]).

Figure 3.4 shows the most prevalent modes for different trip lengths in an urban setting under the High Ambition scenario. As can be seen, non-motorised modes have a considerably stronger presence in the modal mix for shorter trip distances. This remains true over time, under both scenarios, although the non-motorised mode share does grow noticeably for trips in 1 km to 10 km ranges under the High Ambition scenario. Beyond 10 km, the share of passenger-kilometres made by non-motorised modes dwindles, demonstrating the importance of proximity of opportunities in encouraging active travel.

Authorities can also gain insights from engaging with public and private employers when developing policies that encourage mixed-use environments and sustainable mobility. In France, for instance, authorities require enterprises with over 100 employees to establish mobility plans that foster sustainable mobility practices among their staff. Examples of measures in such plans include identifying incentives for using public transport and active mobility modes close to offices and pedestrianising spaces in nearby areas (Réseau Action Climat, 2018[14]).

Emerging labour patterns, such as teleworking, could impact the degrees of density of urban areas in the years to come, as well as authorities’ capacity to promote certain forms of sustainable mobility. Teleworking could, for instance, foster polycentric and lower-density urban settlements, where the costs of maintaining public transport networks would be harder to recoup because of lower commuting. However, it could also facilitate neighbourhood-centric cities where people would make more non-work-related trips using active mobility and micromobility. The 2019 and 2021 editions of the ITF Transport Outlook discuss the implications of teleworking for future passenger transport activities. More research is needed to assess the real-time and evolutionary impacts of teleworking on urban form and correlated mobility patterns (ITF, 2019[15]; ITF, 2021[16]; ITF, 2023[17]).

The High Ambition scenario includes transport and land-use planning measures that promote more compact, mixed and dense environments. Examples of these measures include fostering transit-oriented development (TOD), where neighbourhoods develop in co-ordination with public transport networks. To this end, authorities could set minimum density criteria, give density incentives to developers and require locating new developments near public transport stations (Rode et al., 2014[12]).

In specific developing contexts, reforming maximum density standards would be worthwhile – for instance, by adding minimum space per person criteria to ensure higher densities that go hand in hand with decent living conditions (Rode et al., 2014[12]). In developing and developed contexts, authorities could also set minimum affordable housing provision criteria around emerging public transport stations, for example. Such measures could decrease gentrification and the displacement of lower-income groups due to land-value increases brought about by higher access to opportunities.

Creating more compact, denser and mixed-use settlements where sustainable mobility can thrive requires metropolitan-wide transport and land-use planning and regulatory frameworks. Even with the most ambitious policies, by 2050 the built environment in urban areas worldwide will extend beyond current administrative boundaries. Administrative boundaries, transport planning practices, and regulatory frameworks must adapt to this rapid expansion.

As experiences in Barcelona, London and Paris have shown, building transport governance frameworks that effectively address the policy needs of a metropolitan area is a longstanding, challenging and case-specific process (ITF, 2022[18]). Such processes must be started early, with dialogue between relevant local and national authorities. It will be crucial to include authorities in less-dense areas around urban centres set to become part of future metropolitan areas. Authorities in urban centres for which less-dense areas provide potential work catchment basins area are another important stakeholder group (ITF, 2018[19]).

Combining policy measures will help ensure sustainable urban travel choices in the future (ITF, 2023[20]). Under the Current Ambition scenario, private motorised vehicles (cars and motorcycles) will continue to play a significant role in urban areas worldwide in the years to come (see Figure 3.5). By 2050, under this scenario, these vehicles will cover nearly half of global passenger demand. In the UCAN countries, which on average have lower-density cities, private motorised vehicles will have the largest mode share, at 77%.

Meanwhile, in SSA and SSWA, private vehicles will account for only 16% and 24% of demand, respectively, even under the Current Ambition scenario. Under the High Ambition scenario, mode share for private motorised vehicles in SSA falls to only 12%, the lowest of any world region (see Figure 3.6).

Even under the High Ambition scenario, the mode share of private motorised vehicles remains high (see Figure 3.6). This finding underlines the importance of strategic planning as populations urbanise and designing sustainable travel options in cities to avoid car dependency. The High Ambition scenario includes a comprehensive package of measures to curb the growth in private motorised vehicle use. It combines vehicle restriction and pricing measures with measures promoting active mobility, public transport and emerging digitalised shared mobility. The impact of the type of policies included in the High Ambition scenario on reducing car dependency is well documented (ITF, 2021[9]).

Policy disincentives and higher investments in alternative modes, or a combination of both approaches, can help reduce private vehicle dependency. The modelling for this Outlook also includes a comparison between these approaches to understand their relative impacts. Figure 3.7 shows passenger-kilometres in 2050 under the Current Ambition scenario, the High Ambition scenario and two other policy cases: an Invest Only case and a Disincentives Only case.

The Invest Only case considers the impact of the policies outlined under the Current Ambition scenario (see Chapter 2), but with High Ambition levels of investment in public transport, integrated ticketing, and bicycle and walking infrastructure. It also assumes that policies are in place to incentivise shared mobility and carpooling and the development of multimodal travel services such as Mobility as a Service (MaaS).

Under these conditions, mode share for active travel improves the most, increasing by 6 percentage points. Private motorised vehicles do see a reduction in mode share (-3 percentage points), but so does public transport (by a similar amount), suggesting at least some of the increase in active and shared modes is substituting for previously sustainable public transport trips.

Studies of pricing measures suggest they can effectively reduce city car use. In Milan, Italy, the implementation of a road pricing scheme led to a 12% traffic reduction within the implementation area, and almost 4% outside of it (Rotaris et al., 2010[21]). Likewise, previous examples of vehicle restriction policies have led to reductions of 5-10% in private vehicle travel (ITF, 2021[22]).

The Disincentives Only case assumes the policies outlined under the Current Ambition scenario but adds higher pricing measures, parking restrictions, and urban vehicle access regulations. These measures aim to internalise more of the costs of car use and improve the convenience of sustainable alternatives compared to using the car. Under the Disincentives Only case, public transport (formal and informal) sees a mode share increase of 3 percentage points compared to the Current Ambition scenario. However, in the absence of investment in infrastructure for walking and cycling, the growth of mode share for active travel is only marginal (2 percentage points).

Authorities also need to understand and address the potential adverse effects of restrictive measures on lower-income and underserved groups. Measures that restrict or limit the use of private vehicles can have detrimental impacts on such groups, especially in communities where private vehicle ownership and use is necessary due to a lack of alternatives (Mattioli, 2017[23]; Di Ciommo and Lucas, 2014[24]). However, this is not to suggest that discounts and exemptions should be introduced.

It is recommended to extend concessions to emergency services and public transport. Beyond that, however, experience suggests discounts and exemptions risk undermining the effectiveness of the scheme. Careful spatial and demographic analysis should be conducted as part of the scheme design, to better understand the potential social and distributional effects, and identify if wider mitigation or compensation through the fiscal system is merited (ITF, 2018[25]).

In the longer term, road pricing can contribute to containing urban sprawl and encouraging transit-oriented development and compact cities, as part of a comprehensive policy package. This can also improve urban liveability more broadly (see Chapter 5). The revenues from the scheme can also be used to invest in improvements for public transport and active modes (ITF, 2018[25]; ITF, forthcoming[26]). Earmarking the potential revenues for such improvements in sustainable alternatives and road safety has also been shown to improve the public acceptability of these schemes (Baranzini, Carattini and Tesauro, 2021[27]). Positive communication about the benefits of congestion charges could improve their acceptability (Hsieh, 2022[28]).

Finally, the full High Ambition scenario combines the investment and incentives of the Invest Only scenario and the pricing and restrictions of the Disincentives Only scenario. It also assumes a systemic change in urban planning, resulting in integrated land-use planning, mixed-use developments and higher densities that prevent urban sprawl, reduce trip distances and make public transport more accessible.

As a result, under the High Ambition scenario, by 2050 total passenger-kilometres fall, the mode share for active travel reaches its highest level (27%), and private motorised vehicles’ mode share falls to its lowest level (36%). Public transport’s mode share also drops, although this likely reflects shortened trip lengths and the attractiveness of active and shared modes. The mix of policy approaches to serve the growing urban travel needs by 2050 under the High Ambition scenario allows for a greater shift to sustainable modes, and as a result, lower overall urban passenger emissions.

Promoting active mobility requires a mix of infrastructure investments, improvements in the quality of the mobility experience and information campaigns aimed at behavioural change. The High Ambition scenario includes increases in active mobility infrastructure investment as a first step in promoting active mobility. Examples of such investments include measures that expand networks of cycling lanes, as well as the width and quality of footpaths. In Bogotá, Colombia, for instance, modelling exercises show that walking and cycling infrastructure improvements could more than double the share of cycling in the city by 2050 compared to a scenario with lower policy ambition, while slightly furthering high levels of walking (Papaioannou and Windisch, 2022[29]).

Authorities can also support active mobility adoption by improving pedestrians’ experience when walking. For example, measures might aim to improve the perception of safety on city streets, especially for women, through better public lighting or campaigns to decrease sexual harassment (Chant and McIlwaine, 2016[30]). Authorities can also benefit from promoting information campaigns targeted at specific population groups to foster their adoption of active mobility. Such campaigns can also facilitate the public acceptability of “harder” measures, such as infrastructure improvements that reallocate street space to active mobility as opposed to private vehicles (Markvica et al., 2020[31]).

Active mobility is noticeably higher in emerging regions under the High Ambition scenario than the Current Ambition scenario. People’s demand for active travel modes (including walking, cycling and other activities) will increase in all world regions and under both scenarios. (see Figure 3.8). The highest potential increases occur in SEA, where active mobility under the High Ambition scenario is 55% higher than under the Current Ambition scenario. In the MENA and TAP regions, the equivalent increases amount to 51% and 41%, respectively.

In contrast, increased demand for active mobility in developed regions is limited under the High Ambition scenario. For example, the increase in demand is 8% in Europe, 13% in ENEA and only around 3% for UCAN countries. Furthermore, active modes in the UCAN countries, where many cities are well-established, retain the smallest mode share under both scenarios.

Ensuring a broad disbursement of walking and cycling infrastructure investments is vital to improving accessibility. For most world regions, more than half of the increases in active mobility uptake assumed under the High Ambition scenario occur in the core of urban areas rather than at their peripheries. This trend can partly result from the greater difficulty in enhancing density in peripheral areas compared to more central ones. However, it can also result from differences in investment between urban core and peripheral areas.

Recent analysis of various European cities shows a high concentration of active mobility infrastructure in central and well-off areas as opposed to lower-income neighbourhoods (Cunha, 2022[32]). This infrastructure gap increases the risk of missing the opportunity presented by cycling to facilitate access in less-densely populated areas where public transport services are difficult to maintain. Bridging the active infrastructure gap between central and peripheral areas will be an essential step towards making active modes attractive for all.

Public transport plays a crucial role in decarbonising urban transport. However, public transport networks need to be accessible, frequent, safe and reliable to be attractive. Ensuring the appeal of public transport will therefore require investment. Modelling carried out by the International Transport Workers Federation and the C40 Cities Climate Leadership Group (2021[33]) suggests that investment in public transport can also support job creation. Although the public transport share will not increase in some cities, overall public transport networks will need to carry more people under both policy scenarios explored in this edition of the Outlook. This is due to the increased public transport passenger-kilometres under both the Current Ambition and High Ambition scenarios.

Public transport demand will grow in every region between 2019 and 2050. Under the High Ambition scenario (see Figure 3.9), passenger-kilometres by urban public transport increase in every region. The starkest jump is in UCAN, where public transport passenger-kilometres more than triple. In the other high-income regions, ENEA and Europe, the growth is 38% and 48% in comparison. In SEA, passenger-kilometres roughly triple and in MENA they more than double. This reflects the growing ridership of public transport in these cities, but also the inevitable increase in average trip lengths that will occur as urban areas grow.

Given this increase in demand, public transport planning needs to focus on maintaining existing trips and attracting new trips as urban populations grow. This significant jump for public transport reflects the assumption under the High Ambition scenario of measures to increase investments in buses, BRT and railways. It also results from more compact developments, which make it easier for people to use public transport services.

Figure 3.10 shows the share of passenger-kilometres by public transport mode under the High Ambition scenario over time. Investment in public transport will need to focus on various vehicle types to best respond to the needs of different urban areas. For instance, mass public transport services could benefit from metro or bus rapid transit (BRT) services along trunk lines, complemented by more flexible bus services. For buses, in particular, investments in priority measures and express lanes can support service reliability.

Not all investment in public transport will require capital projects. Investment in improving the speed, reliability and frequency of services, for example. Authorities face the challenge of providing affordable services of a high enough quality to be appealing to users and not simply a service that is necessary for those with no alternative. To this end, services should be reliable and allow users to travel safely and comfortably, as well as in the most efficient way possible.

Providing attractive public transport requires funding to maintain services and expand the network. A crucial question is whether public transport investment is guided by long-term strategic plans, supported by medium-term funding envelopes. As discussed in Chapter 6, this edition of the Outlook recommends that policy makers adopt a “decide and provide” approach to investment decisions.

The “decide and provide” approach involves making investments that are strategically aligned to a vision of the future transport system. Adopting such an approach could support strategic choices among investment options and provide certainty. It could also offer the benefits of a consistent investment pipeline, avoiding cost spikes due to changes in demand at particular times.

The funding challenge for public transport is a large one, especially in the context of the mode shift desired under the High Ambition scenario. In most contexts, public transport fares do not cover the service costs, meaning some form of public subsidy is needed. The reliance on subsidies from the general budget contributes to funding uncertainty, and potentially undermines the ability to plan for the longer term.

Recent work has established the range of options for public transport funding (Litman, 2022[34]; ITF, forthcoming[26]) come from fares, taxes, vehicle or road user charges (including parking-related charges), and revenue from property (including rental incomes and land-value capture). The approaches vary by country and region, and an ITF Working Group is currently considering best practice for the future.

Many countries have begun to develop, or investigate, land-value capture mechanisms as a means to fund major capital works projects (ITF, forthcoming[26]). However, public transport investment is not only about these major capital interventions. Operational investment (e.g. in service improvements) will also be crucial to achieving the desired mode share for public transport in the future.

Given the scale of the challenge, all funding options will need to be optimised. This suggests that future strategies should also plan for higher contributions from fares, while maintaining the fares at a level that will not reduce ridership or negatively affect accessibility. This is a potentially contentious point, and can be highly politically sensitive. In this context, clear and transparent fare setting policies need to be established. Appropriate, targeted concessions should also be developed. These principles should seek to balance user funding and public subsidies, to engender efficient user incentives that support the policy objectives of decarbonisation and accessibility (ITF, forthcoming[26]).

The earmarking of taxes, such as revenue from road-user charging, also has the potential to contribute to funding public transport. Another prominent example of an earmarked tax contributing to public transport funding is France’s versement mobilité [mobility payment, VM]. This tax, payable by employers with more than 11 employees, has existed for over 50 years. The primary rationale is to tax employers for the benefit they get from the availability of a public transport network that allows their employees to commute to work.

Over time, the VM has expanded in scope and scale. It was initially only applied in France’s capital region but metropolitan transport authorities can now decide on its application throughout the country. Also, while revenues from the VM were once only used to fund public transport, they can now be applied to other mobility projects (e.g. investments in active travel).

The VM has provided a large and growing funding source that has made it possible to keep fares artificially low, while still increasing services. In practice, the VM has essentially substituted for fare revenue and has contributed a growing proportion of overall funding. This is due to a decrease of approximately 50% in the proportion of operational funding provided via fares over the last 25-30 years compared to previous periods (Cour des comptes, 2022[35]).

Notably, the VM model has not been taken up by any other country, despite having been used consistently in France for decades. This reflects difficulties in political discussions around setting earmarked taxes, particularly those directly affecting employers. It also decreases the potential for significant uptake of earmarked taxes to fund public transport systems in the coming years, despite possible adoption in some cities. It would be necessary to ensure that any such mechanism included rules that prevented the revenues being earmarked solely for capital projects.

Providing widespread, fixed-route public transport in lower-demand locations in urban areas could bring financial challenges. Furthermore, it can be more difficult for authorities and operators to maintain operations in areas where a critical mass is hard to achieve.

In such a situation, multi-modal and integrated sustainable transport networks become more relevant, and emerging on-demand services can help fill the gaps in public transport provision. Enhancing connectivity between public transport, on-demand solutions (e.g. shared mobility) and active mobility solutions will be a crucial lever for authorities in developing and developed countries to provide public transport in lower-demand locations.

Engaging with informal transport operators and integrating their services in urban transport systems will be an important first area of attention, especially in developing regions. Informal transport activities are flexible, demand-based services that, while not officially included in existing public transport services, respond to the transport needs of low- and middle-income residents in developing cities worldwide.

For instance, in Bogotá and Mexico City, informal transport increases the overall accessibility of public transport networks by 35% and 54%, respectively (ITF and IDB, forthcoming[36]; OECD, 2022[37]). Under the High Ambition scenario in this report, around 16% of demand in SSWA by 2050 would be met by informal modes. The equivalent figure for SSA would be around 23%. Mode shares for informal public transport are lower in 2050 in most regions under the High Ambition scenario, while formal shared modes and public transport are marginally higher.

Increased shared mobility could present an opportunity to leverage pre-existing informal, demand-based networks in developing cities by formalising existing services through digitalisation. In Mexico City, previous experiences have shown that informal transport drivers can adapt to application-based mobility services (ITF, 2019[38]; Flores Dewey, 2019[39]). Research focussed on Latin America also found digitalising informal mobility can also strengthen public transport networks and decrease congestion, provided new services collaborate and feed riders to trunk networks, rather than compete with public transport systems (Paternina Blanco, 2020[40]).

There is also potential for shared mobility services to complement public transport in developed economies. In 2050, under the High Ambition scenario, shared mobility services in Europe and ENEA could cover around 5% of demand. If integrated, combined services could provide a less-space-consuming mobility offer with clear benefits for urban congestion and street space (ITF, 2022[41]).

The modelling results make a case for investing in multimodality beyond traditional public transport services. Figure 3.11 reflects potential decreases in vehicle-kilometres by private motorised vehicles under the Current Ambition compared to the High Ambition scenario and two other cases: a Public Transport Investment case and a Multimodal Investment case.

The decreases shown in Figure 3.11 result from investments that facilitate integration between shared, on-demand services and public transport networks; and from the overarching High Ambition scenario, which assumes other measures such as vehicle restrictions. The figure suggests that, by 2050, the potential reduction in private vehicle use due to multimodal investments could be higher than investments in public transport alone. At the same time, an even more ambitious policy agenda (under the High Ambition scenario) that promotes the integration of land-use and transport planning and setting private vehicle access regulations can produce impacts four times greater than multimodal investments.

In the Multimodal Investment case and the High Ambition scenario, MaaS and multimodal transport services are assumed to improve integration between public transport and shared mobility, improving access to public transport and reducing interchange times. This is expected to result in car ownership becoming less attractive. However, the viability of MaaS remains unproven (ITF, 2021[42]).

One of the most common visions of MaaS is one where commercial MaaS providers would develop appealing customer offers in a competitive environment. However, viable business models have not yet emerged. Potential use cases such as tourism or employee travel management could help define test markets (ITF, 2021[42]).

More pilots and case studies are needed to shed light on the day-to-day potential and impacts of MaaS services. Given the uncertainty, governments may consider it more expedient to take a leading role in the development of integrated multimodal services, to realise more quickly their potential benefits for decarbonisation and accessibility policy objectives. An ITF Working Group is currently exploring this subject (ITF, 2023[43]).

Urban areas are essential nodes in global supply chains, particularly in cities with (or in proximity to) ports and their hinterlands (Wang et al., 2016[44]). Urban authorities tend to take a passive approach to managing and regulating urban freight activities. However, tools exist to ensure that freight activities align with a city's strategic goals – for instance, by regulating the spaces through which freight passes (ITF, 2022[45]).

By 2050, urban freight activity will increase by a factor of 2.6 worldwide compared to 2019, growing in every region. While the SSWA and SSA regions have the highest increases, urban freight demand also sees strong growth in ENEA, MENA and SEA. These regions have rapidly urbanising populations and growing economies through to 2050. Growing middle classes in some emerging regions are expected to lead to a consumption boom, which is already visible in SEA (ITF, 2022[73]; WEF and Bain & Co., 2020[74]). Urban freight in ENEA is expected to triple, consistent with the high rates of urbanisation in the coming years.

Growing urban freight volumes can contribute to higher urban congestion. It also contributes to urban sprawl and compounds the pressure logistics activities place on scarce urban land and street space (ITF, 2022[45]).

For instance, online retailers have considerably increased their urban and metropolitan-wide logistic footprints recently. Travel restrictions and other policies responding to the Covid-19 pandemic have enhanced this trend (Schorung and Lecourt, 2021[46]). Authorities will need robust regulatory frameworks to manage and deal with the consequences of increasing logistic activities (ITF, 2022[45]). Mandatory planning documents, such as sustainable urban logistic plans (SULPs), can provide a framework on which to build metropolitan-wide logistics capacities and public governance (Aifandopoulou and Xenou, 2019[47]).

Under the Current Ambition scenario, motorised modes carry most urban freight. In 2019, various types of motorised vehicles transported almost all tonne-kilometres in cities worldwide. Regarding vehicle-kilometres, non-motorised and micromobility modes (including two and three-wheelers) accounted for around 11% of urban freight flows. This figure increases to 29% in 2050 under the Current Ambition scenario and 39% under the High Ambition scenario.

Lorries catered to the highest share of tonne-kilometres (89%) transported via motorised urban freight modes in 2019 under the Current Ambition scenario (see Figure 3.12). However, HGVs represented less than 30% of the total vehicle-kilometres travelled, as they have a higher capacity to transport heavier loads. They are less suitable for lighter loads, including parcel deliveries.

Light commercial vehicles (LCVs) are the preferred option for parcel delivery, explaining their 55% share of vehicle-kilometres in 2019. HGVs would be responsible for a smaller percentage of vehicle flows and a higher share of tonne-kilometres due to their use for heavier goods and commodities. Improving the efficiency of deliveries can reduce motorised freight movements and consequent COemissions per delivery.

The High Ambition scenario includes measures that promote increases in freight efficiencies among freight carriers, avoiding the need for unnecessary travelled distances. Examples of these measures include incentives for asset-sharing schemes between freight carriers, or between freight shippers and carriers. Such incentives could lead to higher truckloads, decreased instances of empty running and lower travelled distances. Previous analyses have shown that load pooling could reduce travelled miles in dense cities by around 30% and decrease delivery times and costs by approximately 25% (Bouton et al., 2017[48]).

Authorities can help enhance collaboration between freight carriers to achieve freight efficiencies. For instance, they can facilitate the creation of shared physical urban logistic hubs and foster common data-sharing mechanisms. Other relevant demand-management measures not included in this scenario seek to manage the times when deliveries occur (ITF, 2022[45]). To this end, collaboration with freight receivers and carriers is essential (Holguín-Veras and Sánchez-Díaz, 2016[49]).

The shift towards non-motorised modes can also reduce urban freight emissions. By 2050, the flows of urban freight transported using motorised vehicles will be around 7% lower under the High Ambition scenario than the Current Ambition scenario. Non-motorised modes will also grow considerably in every region, especially in ENEA, SEA, SSA and SSWA.

Under the High Ambition scenario, which assumes the promotion of cargo bicycles for last-mile deliveries, tonne-kilometres carried by non-motorised modes more than doubles in every region in 2050, compared to the Current Ambition scenario. Switching deliveries to bicycles can also reduce operator energy costs (Prato Sánchez, 2021[50]) and reduce noise and congestion externalities for the city (Cairns and Sloman, 2019[51]; Koning and Conway, 2016[52]). Electric cargo bikes can also increase loading capacity and distance range, compared to non-electric models. However, mode shift could also have negative externalities for operators. For instance, it could impact staff costs if bicycle deliveries increase travel time for drivers (Arnold, F. et al., 2018[53]).

Urban authorities could invest in cycling infrastructure enhancements to encourage the uptake of bicycle deliveries. They could also introduce differentiated access restrictions for higher-polluting vehicles and preferential space allocation for non-motorised deliveries. Facilitating the building of logistic transhipment facilities to shift loads from larger vehicles to cargo bikes would make cargo bikes a more viable option due to shorter final legs.

However, incentives for mode shift towards non-motorised modes need to be thought through to ensure adoption, considering their impacts on freight carriers’ business models. Authorities also need to implement these measures in parallel to increasing freight efficiencies. This co-ordination of actions will help ensure the use of larger vehicles at their maximum capacity when relevant while encouraging the use of smaller vehicles for shorter distances whenever possible (ITF, 2022[45]).

Drop-off and pick-up locations, such as parcel lockers or relay points allowing users to collect their deliveries, can also reduce motorised freight activity in urban settings. Recent ITF analysis indicates that, if such infrastructure was available, it could account for around 20% of a city’s parcel collections (ITF, 2022[45]). The modelling for this Outlook suggests that total vehicle-kilometres for parcels would be reduced by up to 38% by 2050 under the High Ambition scenario. Since this measure is immediately implementable, introducing pick-up points alone would be expected to reduce vehicle-kilometres for parcels by 3% in 2025 and 13% in 2030.

Pick-up points can facilitate non-motorised modes if people use these alternative modes instead of private vehicles to pick up their parcels. But this is easier in cities with a high density of pick-up locations. In Graz, Austria, for instance, an analysis of users of pick-up and drop-off locations revealed that around half would be willing to walk or use bicycles to reach them (Hofer et al., 2020[54]). The potential of such a measure for promoting sustainable urban mobility can be lower if end users pick up their packages by private motorised vehicles such as cars. This highlights the relevance of considering freight and passenger mobility simultaneously when it comes to e-commerce-related flows.

The global rural population will decrease in the years to come. In most world regions, rural populations will remain stable or decline in the years leading to 2050, particularly in high-income regions, including ENEA, Europe and UCAN. In these regions, rural populations will decrease on average by 50% due to a combination of populations peaking and declining in many countries, or high urbanisation in countries such as the People’s Republic of China. In upper-middle-, lower-middle- and low-income regions, rural populations are set to remain stable or only slightly increase between 2019 and 2050.

Future passenger demand trends in non-urban areas will closely reflect evolutions in rural populations almost everywhere (see Figure 3.13). In high-income regions such as ENEA, Europe and UCAN, transport demand outside urban areas will decrease between 2019 and 2050, falling by 61% in ENEA, 22% in Europe and 35% in UCAN. Elsewhere, considerable growth in per-capita GDP in developing regions will contribute to continued increases in regional demand, albeit at a slower pace than urban demand.

Decreasing regional transport demand could make it difficult to fund and maintain accessible and sustainable transport solutions in less-densely populated regions. Any decline in regional transport demand may also affect the financial sustainability of regional transport services. Developing on-demand transport services and furthering shared and active travel targeting rural areas can contribute to maintaining access levels. Other measures might include developing countrywide accessibility policies that take into account both urban and rural areas – for instance, through sustainable regional mobility plans (ITF, 2021[55]). Overall, it will be necessary to comprehensively rethink and plan for regional transport activities to respond to the future accessibility needs of rural and low-density peri-urban dwellers.

Private cars are the primary mode of regional transport in most regions. More than half of all global regional passenger-kilometres in 2019 took place by private cars. This was a trend across most world regions: the share amounted to roughly 70% in Europe, LAC and MENA under both scenarios, in 2019 and 2050. In UCAN, passenger cars retain a roughly 95% mode share in 2050 under both scenarios. The only exceptions were ENEA and SSWA, where private cars accounted for less than 30% of demand. Yet, even in these regions, the use of two- and three-wheelers for regional travel accounted for more than 16% (ENEA) and 7% (SSWA), respectively, of passenger-kilometres.

Even under the High Ambition scenario, passenger cars will dominate regional travel until 2050 (see Figure 3.14). Between 2019 and 2050, under the High Ambition scenario, passenger-kilometres travelled by private cars will decrease by more than 20% in Europe, more than 30% in UCAN and more than 60% in ENEA. These decreases are just slightly higher than under the Current Ambition scenario. The fact that change over time is greater than the difference between scenarios points to the relative lack of widely established policy interventions for regional travel.

However, even as regional demand overall falls in Europe and UCAN, the share of passenger-kilometres covered by passenger cars in 2050 in these regions will remain high. In ENEA, passenger cars have a 20% mode share in 2050. In emerging regions, even with the High Ambition scenario, mode share for passenger cars will only increase – almost doubling in the MENA region and more than tripling in SSA. Because of this, private motorised vehicles remain the primary mode of regional transport in most developing regions, bar SSWA.

It is important to highlight the shift towards rail transport over time. Passenger-kilometres by rail grow under both policy scenarios, rising by more than 60% between 2019 and 2050. The increase outpaces the overall growth in regional passenger-kilometres of 5%. This result underlines the importance of rail in non-urban settings regardless of the policy ambition. The mode shift to rail is mainly encouraged by the increasing cost of car use when carbon pricing is introduced.

The persistently high mode share for cars reflects the difficulty of achieving mode shift in predominantly low-density areas with more dispersed travel patterns. Recent work by the European Commission (EC, 2019[56]) found that the use of internal combustion engine (ICE) vehicles in uncongested rural areas had significantly lower external costs than car use in congested urban areas. Zero-emission vehicles (ZEVs) in these uncongested rural contexts had even lower externalities.

This suggests that it is possible to decarbonise regional travel by accelerating the uptake of ZEVs outside of cities and investing in rail and collective modes where appropriate. Carbon pricing in this context will be a crucial policy measure for managing the technology transition away from ICE vehicles. It is essential to design pricing measures equitably to ensure that low-income households are not disproportionately disadvantaged. However, as discussed in the previous edition of the Outlook (ITF, 2021[16]), particular care and advanced impact analysis are necessary when designing these schemes. It is also possible to couple them with more progressive incentives for the uptake of ZEVs (see Chapter 4).

Increased ZEV uptake will help achieve decarbonisation. But relying on private motorised modes (even if they do not produce emissions) will not improve accessibility for those who cannot afford (or are unable) to use a car. A 2021 ITF report on rural mobility (ITF, 2021[55]) found that better governance and more flexible regulations are needed to foster novel regional solutions. Innovative financing and funding solutions are also required; financial support should be linked to their impact rather than how “high-tech” they happen to be.

As the results in this Outlook demonstrate, such solutions will likely remain in the lower-occupancy modes, with greater flexibility. The Working Group also recommended increasing funding for shared modes and boosting investment in active mobility. A new ITF Working Group is currently developing recommendations for sustainable accessibility (ITF, n.d.[57]).

Inhabitants of high-income regions will be responsible for most intercity and international demand between 2019 and 2050 under both policy scenarios. ENEA, Europe and UCAN account for more than two-thirds of all international and intercity passenger-kilometres over time and across both scenarios.

As Figure 3.15 illustrates, the average person living in a high-income global region (e.g. ENEA, Europe or UCAN) in 2019 generated nearly 5 000 passenger-kilometres through international and intercity travel. This equals 67% more demand than the average person living in an upper-middle-income region such as LAC, or more than 10 times that of the average person living in the low-income region of SSA.

Under the Current Ambition scenario, inhabitants of lower-income regions will slowly bridge the gap in international and intercity passenger demand with those living in higher-income regions, mainly driven by increases in per-capita GDP.

In lower-middle-income and low-income regions, per-capita GDP will grow by factors of 3 and 2, respectively. This growth will go together with proportional increases in per-capita travel demand. However, demand in high-income regions, including ENEA, Europe and UCAN, will also continue to rise. Under the Current Ambition scenario, demand will roughly triple by 2050 in high-income regions.

The High Ambition scenario includes demand-management measures such as ticket taxes for aviation and, more generally, carbon pricing. It also assumes the introduction of a short-haul flight ban for flights of less than 500 km where a rail alternative of reasonable quality exists. These measures decrease the attractiveness of carbon-intensive modes. By 2050, aviation-related passenger-kilometres will be lower under the High Ambition than the Current Ambition scenario for all regions. Parallel to this, the High Ambition scenario increases the adoption of railways in all world regions compared to the Current Ambition scenario.

Passenger cars and aircraft are the main overall modes used for international and intercity travel (see Figure 3.16) but are also more carbon-intensive than other modes. Therefore, shifting transport activity to more sustainable modes, where feasible, could reduce emissions. However, the predominant mode of travel varies depending on the trip length, and alternative modes are not always realistic.

Rail and car are the most prevalent modes for short-distance trips of less than 500 km. People strongly rely on the private car for middle-distance trips (between 500 km and 3 000 km) under both the Current Ambition and High Ambition scenarios. In contrast, air transportation accounts for most long-distance activity (i.e. trips longer than 3 000 km). In reality, although mode shift is a frequently cited policy objective, the switch to lower-emitting forms of transport has been slow to materialise (ITF, 2022[59]).

Intercity and international trips of less than 500 km show the greatest variety of modes used, with rail transport, ferries, cars and motorbikes, buses and aviation all present in the modal mix. Even in 2019, collective surface transport modes met considerably higher shares of travel demand in this distance category, with around 29% of demand carried by intercity buses and a further 21% carried by rail. By 2050, collective surface modes could cover more than half of demand under both scenarios. Promoting mode shift for trips shorter than 500 km is more relevant in some regions than others.

Aviation is the most carbon-intensive transport mode. This reality makes a shift away from air travel a frequent candidate for intervention in decarbonisation discussions. Given the prevalence of alternative modes for short-distance trips, the High Ambition scenario for this Outlook includes a policy banning direct flights for distances shorter than 500 km where a good-quality rail alternative exists. Some countries are already considering such a measure to tackle carbon-intensive short-haul travel. For example, the European Union recently approved France’s banning of some domestic flights (EC, 2022[60]), although this measure only impacts three routes at present (Eccles, 2022[61]).

Implementing such a short-haul flight ban could potentially shift 49% of passenger-kilometres generated by short-haul flights to rail by 2050. However, reaching this figure relies on further expansion of the global rail network and improvements in the quality of intercity routes and connections between central railway stations and airports. This Outlook assumes that the global rail network expands to supply all viable connections from a demand and cost perspective, leading non-urban rail passenger-kilometres to increase by a factor of 2.8 between 2019 and 2050.

The effectiveness of a short-haul flight ban measure also varies by region. The highest potential impact could occur in ENEA, Europe and UCAN, where countries have, or plan to invest in, existing rail networks, meaning that availability and quality will increase over time. In these regions, the potential impact rises to roughly 64% of short-haul flight passenger-kilometres. In other regions, the lack of rail infrastructure presents a barrier to this measure taking effect.

Furthermore, short-distance travel accounts for less than 11% of international and intercity trips, and short-haul flights are 2.6% of total passenger-kilometres for air. Therefore, shifting passengers from short flights to rail would only affect 1.2% of the total passenger-kilometres generated by air travel. This result is based on the application of a ban when a reasonably low bar of good quality rail is available. If a high-speed alternative were required for the flight ban to take effect, the proportion of passenger-kilometres of short-haul flights affected would fall further to 3%, representing just 0.1% of total air passenger-kilometres.

The High Ambition scenario assumes investment in rail of a standard sufficient to meet the threshold for the short-haul flight ban. However, emerging economies will require funding to support infrastructure development measures contributing to mode shift for medium and short intercity and international transport. The infrastructure gap in developing regions currently affects how much they can shift demand towards more sustainable collective surface modes for short-distance intercity travel.

Bangladesh, for instance, has identified a USD 124 billion financing need to support its conditional and unconditional transport mitigation measures, as part of its Nationally Determined Contribution (NDC). Almost 90% of this financing would require international support, while around one-third of that support would need to target measures to improve intercity connectivity by surface collective sustainable modes, including railways (SLOCAT, 2022[62]). Increasing the funding available is essential to ensure that developing regions can achieve the potential decarbonisation savings and benefits offered by shifting demand towards more sustainable modes.

The need to decarbonise aviation becomes apparent when considering that most of the world’s international and intercity long-distance travel is limited to air. Mode-shift policies become less applicable as trip distances grow, and fewer viable alternative modes exist. Decarbonising long-distance travel can only be achieved by reducing either vehicle emissions or the travel itself, which has potential equity impacts. Figure 3.17 presents intercity and international demand for various regions, by trip distance, in 2050.

As Figure 3.17 highlights, medium-length and long-distance travel – where aviation and car travel dominate – will account for the majority of the demand in most regions. The figure also reflects the fact that a higher share of international and intercity travel in many emerging regions occurs in the longest distance category. Furthermore, trips of more than 3 000 km account for half of intercity and international demand in some world regions. However, these trips are generally only taken by air transport, eliminating the possibility of shifting demand to other modes.

Passenger-kilometre reductions could be promoted by substituting trips for shorter ones (e.g. through a shift towards more local tourism) or eliminating travel needs altogether (e.g. by replacing business trips with teleconferencing). However, such measures have potential consequences for people and countries, particularly those reliant on tourism, economic development and air connectivity. If passenger travel is to grow without a corresponding rise in emissions, it becomes imperative to accelerate the technology and fuel transition of aviation and road fleets to low- and zero-emission modes (see Chapter 4).

Non-urban freight demand will increase by 52% between 2019 and 2050 under the High Ambition scenario and by 95% under the Current Ambition scenario. Under the High Ambition scenario, ambitious policies aim to improve the operational efficiencies of freight activities to avoid unnecessary travel. Furthermore, transport activity can be avoided if countries act on their commitments to phase out fossil fuels. Pricing measures will also be important to facilitate mode shift wherever possible. Overall, tonne-kilometres under the High Ambition scenario are 22% lower in 2050 than under the High Ambition scenario.

The reduction in tonne-kilometres is not entirely due to transport policies. The phasing out of fossil fuels would reduce the emissions associated with the extraction and burning of those fuels, and the freight movements associated with the fossil-fuel supply chain. Under the Current Ambition scenario, the trade assumptions would lead to a growth in the volume of fossil fuel extracted and moved (see Figure 3.18). Under the High Ambition scenario, the overall amount of fossil fuels carried in 2050 is only one-third of what it would be under the Current Ambition scenario. This sharp decrease would help reduce tonne-kilometres travelled, even as volumes of other commodities grow.

Improving operational efficiencies can help avoid unnecessary non-urban freight movements, decreasing emissions and costs by reducing the vehicle-kilometres associated with transporting tonne-kilometres. Examples of such improvements include using higher-capacity vehicles that transport the same volume of goods in fewer vehicles, asset sharing, and reducing the number of vehicles that run empty. The High Ambition scenario assumes policy measures and intelligent transport systems (ITS) are introduced that enable increased asset sharing and the use of high-capacity vehicles (HCVs).

Asset sharing (the sharing of resources such as vehicles or ware houses, for example) could increase full truckloads and decrease overall empty travel, depending on initial load factors, previous operational characteristics and the commodity type being transported (Venegas Vallejos, Matopoulos and Greasley, 2022[63]; Ballot and Fontane, 2010[64]). Asset sharing is beneficial for optimising the use of cubic space in vehicles and ports and consolidating freight activity. Beyond its space-capacity benefits, asset sharing can also maximise the use of the weight capacities of vehicles, thereby increasing transported tonnes.

Digitalisation can support asset sharing but will require collaboration between sector actors to provide flexibility for shippers and carriers, and better data (ITF, 2022[65]). The High Ambition scenario also assumes higher investments in information and communication technologies and systems for improving the efficiencies of freight transport operators. These types of investments can increase load factors – for example, by optimising routing to decrease travelled distances (GeSI and Accenture, 2015[66]; Samaras et al., 2016[67]; Lewis, Le Van Kiem and Garnier, 2019[68]).

Optimising freight operations can also risk producing a rebound effect leading to trade growth and increased freight activity. However, the scale of the rebound is estimated to be less than the overall benefit produced through the measures (ITF, 2019[69]). Nevertheless, governments should consider cross-sector asset-sharing approaches that encourage a shift to lower-emission freight modes such as rail. This approach would also require improvements to freight interchanges to reduce intermodal dwell times and transit times.

HCVs increase the possibility of reducing emissions by lowering fuel consumption and emissions per unit of cargo transported. Using such vehicles also reduces the truck movements required to move the same amount of freight, resulting in HCVs contributing to reduced NOx emissions, and lower road and bridge wear (provided the trucks used have a higher number of axles to avoid overloading). There are some concerns about the risk of mode shift to road from rail if HCVs are introduced and rail becomes less cost-competitive. Studies suggest the mode shift to be somewhere in the region of 1.2 – 1.8%, but with a net social benefit. However, real life experience, and ex-post analysis, is limited so far and further research is needed (ITF, 2019[69]).

The combination of ITS with HCVs can improve monitoring and enforcement, which will be important in generating public support for the measures. Furthermore, targeting the roll-out of HCVs to routes with appropriate infrastructure and fewer competing modes can also help to reduce barriers to their implementation. However, even so, the introduction of these vehicles will rely on buy-in from, and collaboration among, many different “stakeholders from industry, transport companies, forwarders and politicians” (ITF, 2019[69]).

Maritime transport carries the majority of tonne-kilometres of freight and is overwhelmingly the main mode for distances of more than 3 000 km (see Figure 3.19). This result applies to both scenarios through to 2050. Freight trains and maritime transport modes carry the highest share of tonne-kilometres travelling in the 1 000-3 000 km range, while road transport prevails for all shorter trips.

Even with higher policy ambition, road-based transport will continue to dominate medium- and short-haul transport by 2050. For distances between 250 and 3 000 km, road-based transport would account for more than half of tonne-kilometres. High shares for road-based transport, especially over shorter distances, are expected. This is due to the fact that existing investments in expansive road networks give road-based modes higher flexibility for freight operations than alternative modes, which are more constrained by limited infrastructure.

Aviation, generally the most expensive of the available modes, carries the fewest tonnes-kilometres and is most prevalent for distances greater than 3 000 km. Most high-value and time-sensitive long-distance shipments travel by air, as aviation is the fastest available transport mode. However, despite accounting for less than 1% of non-urban freight tonne-kilometres, aviation was responsible for nearly 11% of the associated CO2 emissions in 2019.

In contrast, maritime transport emits just over 40% of COemissions associated with non-urban freight, despite carrying approximately three-quarters of the tonne-kilometres in 2019. Rail has the smallest share of emissions in 2019 (about 2%) and in the future (remaining at roughly 2% in 2050 under the High Ambition scenario or nearly 4% under the Current Ambition scenario). The share of total tonne-kilometres carried by rail increases by 6 percentage points under the High Ambition scenario compared to the Current Ambition scenario. However, as a share of total tonne-kilometres, freight trains still only carry 14%.

Pricing measures are a mechanism to help ensure users carry the actual costs of road use, including negative externalities such as carbon emissions, congestion, and air-quality impacts. While different modes have different externalities, the negative externalities of road transport are “generally higher than [those of] other modes” (ITF, 2022[70]). They also help to ensure that the most sustainable, viable mode is chosen for each multimodal transport logistic chain segment.

Road pricing can encourage greater efficiencies in freight, reducing overall road-based tonne-kilometres. One study estimated that introducing a distance-based toll in the Netherlands decreased road tonne-kilometres by up to almost 5%, depending on the pricing scenario (de Bok et al., 2022[71]). Charges could also partially mitigate declining fuel taxes (OECD, 2019[72]).

The non-urban freight sector demand is relatively inelastic to cost changes. The mode choice depends on many factors, including distances, quantities, available infrastructure, commodity types, and costs. As a result, the various mode alternatives are not perfect substitutes for one another. The modelling results for this Outlook suggest that there is some room for mode shift but that, by and large, certain modes are best suited to certain routes and commodities.

However, modest changes in mode share can still be significant for decarbonisation. The various modes have very different emission factors, and small changes in mode share can result in higher reductions in the tank-to-wheel emissions associated with this demand. Nevertheless, interventions to encourage mode shift still need to be coherent across all modes to be effective. They should be consistent with each other. For example, offering subsidies for rail while giving fuel-tax exemptions for road transport should be avoided (ITF, 2022[70]).

The High Ambition scenario assumes two pricing measures for freight: carbon pricing and distance-based pricing. For the purposes of the modelling, some level of carbon pricing was introduced across all transport activities (i.e. not just freight transport), while distance-based pricing was only introduced for road freight.

To test the impact of different cost changes on tonnes carried by the different modes, the costs for each mode were incrementally changed (decreased, then increased) relative to the High Ambition scenario. Cost variations ranged from -50% to +50% on each mode individually to observe the impact on mode choice. It should be noted, that this testing assumed the same freight demand, and looked at the distribution of tonnes across modes. However, further work would be needed on pricing to investigate the impact of cost increases on demand patterns (for example, regionalisation and trip length).

The results (see Table 3.2) show that all modes are inelastic to varying degrees, except when road transport is underpriced relative to all other modes. Under these conditions, road transport modes will attract a greater proportional freight volume. The modelling results suggest that pricing measures for road freight could influence the choice of road transport, and could help ensure the most sustainable, viable mode is chosen. Among the remaining modes, rail is more responsive to price changes, but only becomes elastic when rail costs are 50% lower than those of the High Ambition scenario and all other modes remain unchanged.

Pricing also has a potential role in multimodal freight journeys, particularly regarding the access mode used for ports. Testing of cost variations shows (see Table 3.3) that the access modes used for maritime freight are more elastic than the shipping itself. In other words, on the one hand, the choice to rely on maritime shipping remains stable. However, on the other hand, deciding whether to access a port via a waterway, road or rail connection depends significantly on the availability and costs of alternative options.

This finding is particularly true for choices between road and rail-based modes, where cost changes in either mode affect the tonnage carried by the other to access ports. In certain regions, measures that ease the use of multimodal supply chains combined with efficient road pricing could encourage higher use of more sustainable modes to access ports.

Sensitivity testing on the High Ambition scenario suggests that the weight of freight accessing seaports by road could be halved in 2050. Rail and waterways would pick up the remaining tonnage if 1) the cost of road freight relative to other modes increased further, and 2) governments delivered on the rail investments foreseen in the High Ambition scenario.

Take a long-term view of urban development and adopt integrated approaches to transport and land-use planning to avoid future sprawl in growing cities

Authorities should integrate land-use and transport planning to create more compact cities where people have greater access to opportunities close to where they live. This can help avoid urban sprawl and support the emergence of sustainable mobility modes as attractive choices.

In regions with high urban density levels, such as Europe, authorities could focus on improving the quality of collective and active transport services. In regions where high urban sprawl limits the reach of densification policies, such as UCAN, authorities can foster sustainable alternatives to private vehicle use for longer-distance intra-urban trips. In regions where cities are still developing and growing, such as MENA and SSA, there is an opportunity to avoid car-dependent cities with the right development and transport strategies.

Authorities should promote shifts towards more sustainable modes by combining urban private vehicle access restrictions and pricing measures with investments in alternative sustainable modes. Investments should target infrastructure improvements for safer active and micromobility and better public transport infrastructure and services. This also includes encouraging emerging forms of shared on-demand services and vehicles, which should be co-ordinated with public transport services.

In both cases, services and investments should target the central and peripheral parts of urban areas. When setting urban access regulations, authorities will need to make an effort to ensure their public acceptability, for instance by integrating impacted communities in decision-making processes. Authorities should also aim to address adverse impacts on lower-income groups. Revenue raised through congestion pricing could also be reinvested in sustainable modes to aid equity and acceptability.

For passenger activities in the regions outside of cities, authorities will need to pay attention to evolutions in population densities. Future transport solutions in these contexts are likely to remain focussed on the passenger car and active mobility where appropriate. Passenger cars in uncongested areas, particularly EVs, have relatively low externalities compared to congested settings. However, in the regional context, achieving decarbonisation will not support accessibility if private cars alone continue to make up the majority of zero-emission vehicles. Therefore, new forms of on-demand services will need to be explored. In this context, authorities could help achieve their decarbonisation and accessibility goals by supporting pilots of emerging solutions. Authorities should also invest in active mobility infrastructure to make it safe and appealing outside urban areas.

Measures to manage intercity and international transport demand are limited in their scope and potential impact. Potentially higher-impact measures (e.g. shifting business trips to teleconferences or restricting tourism to more local options) can be challenging to implement and could negatively affect destination territories. Other alternatives include increasing the cost of – or banning – carbon-intensive short-haul flights. Such measures could also promote mode shift to railways, provided decent quality infrastructure is available.

The potential for shifting intercity and international passenger activities to more sustainable modes varies according to the distance. Authorities have more options to promote mode shift for trips shorter than 500 km because of the greater diversity of modes available. However, most intercity and international trips occur over longer distances – primarily by car or aircraft. Measures supporting shifts away from these modes include investing in railway infrastructure, reliable bus networks, and roads.

For freight transport, authorities can contribute to limiting unnecessary movements by supporting increases in carriers’ operational efficiencies. Promoting carrier collaboration or using ITS tools to optimise routing and support asset sharing can increase occupancy rates. Properly regulated, high-capacity vehicles can also reduce vehicle flows. Finally, actions to phase out fossil-fuel consumption will also decrease related freight movements if countries act on their international commitments.

Authorities can also support mode shift for non-urban freight, especially at short distances. Road transport carries most freight for distances shorter than 1 000 km, mainly because of its higher flexibility. On certain legs, authorities could provide the conditions for shifts towards other mode alternatives, such as railways and inland waterways. Authorities and shippers will need to support improvements to multimodal interfaces. Examples of measures include setting up dry ports and other multimodal infrastructure, increasing digitalisation and asset sharing, and investing in inland waterways and railway networks.

Policies to reduce emissions associated with passenger road transport should include a combination of pricing measures to capture the external costs of car use. Carbon pricing should be maintained for ICE vehicles, with rates per tonne of CO2 increasing over time. In urban settings, where externalities associated with congestion are higher, congestion pricing should be introduced. Authorities should consider investing revenues from pricing measures into public transport and active mobility infrastructure. Parking pricing should also be set to more fairly capture the external costs of space consumption by static cars in densely populated areas.

Most freight transport modes are relatively inelastic, but coherent policies should be adopted to ensure that the most sustainable, viable mode is always chosen. Road transport is the only mode showing an elastic response to cost decreases. This suggests that measures such as pricing need to be introduced coherently with the same objective across all modes to ensure that road freight does not increase its mode share at the expense of other modes, particularly rail. Carbon pricing can help counteract the impact of fuel-tax exemptions and subsidies for fossil-fuel-based modes where they cannot be phased out. The latter should be phased out wherever possible.


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