Transport in a Low Carbon Economy

Good morning ladies and gentlemen.

It's a great pleasure to be here for this important conference and it is good to see so many influential faces in the audience.

Tackling climate change is a challenge which needs all our involvement so I am delighted to see you all here.

With the price of a barrel of oil reaching $135 in late May, some people are suggesting that reducing carbon emissions has to be pushed right down our agenda.

There is no doubt that a ten-fold increase in oil prices in the last decade is having a damaging impact around the world – on economies, on business and on families through rising energy and other household bills.

This is why the Prime Minister and the Chancellor are working hard to steer the UK economy safely through this difficult period and to see how families can be helped.

But it is, of course, a profound misunderstanding of the problems the world faces to believe the soaring cost of oil somehow makes action to cut carbon emissions less important.

On the contrary, it reinforces the need for us to show courage and vision to reduce our dependence on fossil fuels - both as an environmental imperative and an economic priority.

As the Prime Minister spelt out, the long-term pressures on oil prices - soaring global demand and insufficient supply - are not going to go away.

Demand for oil is expected to grow by 37% between 2006 and 2030 – much of it from China and India - and yet oil is becoming more expensive to extract and refine.

So reducing our dependence on oil will help us not only tackle climate change, but provide secure, sustainable and cost-effective energy supplies for our long-term future.

And the UK is showing how it can be done without damaging prosperity.

We're on course to double our Kyoto commitment - which was to reduce greenhouse gases by 12.5% by 2012 from the 1990 baseline figure.

And we have done so while our economy has grown strongly.

Between 1997 and 2006, our economy grew by 47%, while greenhouse gas emissions fell by 7% - showing the world that we don't have to choose between economic growth and going green.

And we are giving a lead through the Climate Change Bill - the first of its kind in the world – which sets a clear, binding commitment for a minimum 60% cut in carbon emissions by 2050 – the sort of reduction needed if we are to stabilise and then cut the greenhouse gases in our atmosphere.

Vision

There is overwhelming scientific consensus now that cuts of at least this level will be needed to prevent damaging, and possibly catastrophic, rises in temperature across our planet.

To meet these challenges, we will need to think radically - with a vision of a very different world from the one in which we currently live.

And, of course, we will need a revolution in the way we travel.

Mobility is vitally important to us as a society.

It is crucial to our economic prosperity and competitiveness, to our quality of life, to social inclusion, to meeting our ambitions.

I am clear that we will not achieve our aims by rationing travel, so it becomes something only the wealthy can enjoy.

Instead we need to find ways of ensuring the journeys we make cause as little damage as possible to the environment.

Considering the long-term growth in road transport predicted by Sir Rod Eddington, we will need to achieve an almost complete decarbonisation of cars by 2050.

That means we need to harness new technologies, and change the way we plan our cities and communities.

I think we'll also see a fundamental shift in the way individuals interact with the transport system, and the way we plan our journeys. Our travel priorities will change to reflect demand, importance of journey, and environmental impact.

Government role

To achieve this transformation, the Government will need to set the right long term framework for delivery and innovation - and provide the right incentives that allow businesses, cities, local authorities and each of us as individuals to play our part in tackling climate change.

I want to talk today largely about what we can do as a country.

But, of course, we also need a robust strategy for reducing carbon emissions internationally.

Take aviation for example.

I've spoken in the past at length about our need to tackle rising aviation emissions. And I've been equally clear that I fundamentally disagree with those who say that rationing flights or restricting air travel is the only way to achieve this.

Restricting air travel, for example, from Heathrow is going to have no impact on climate change if passengers just switch their flights to Paris, Frankfurt or Schiphol.

Aviation is an international business, and requires international solutions to combating rising emissions.

The UK has taken a lead in negotiations to include aviation in the European Emissions Trading Scheme as a first step towards global trading.

We expect the go-ahead to be agreed later this year, which will mean that European aviation CO2 emissions will be effectively capped at the average of 2004-06 levels.

This means that any growth in aviation emissions above the cap would be matched - tonne for tonne - by reductions in other sectors of the economy, paid for by the airlines.

I'm clear that this is a sensible way forward - indeed the only long-term way forward - if we are serious about driving down CO2 emissions across the EU.

Real leadership here is about working in Europe and negotiating hard to make the emissions trading scheme as ambitious as possible.

And if you don't think we're being ambitious enough my message is a simple one - push for a more ambitious trading framework. And depending on your precise objective that might mean a tougher baseline, a lower allocation of credits or higher levels of auctioning.

I don't believe these can be achieved in the EU right now. But as opposed to unilateral action by the UK, they would achieve significant emissions reductions overall and prevent the export of British jobs and prosperity overseas.

National

Nor, of course, will the changes we need to make here in the UK be easy.

Last week John Hutton talked about how the transition to a low-carbon economy would require nothing less than a revolution in our energy system.

That's true. But what excites me is how the transition to a low carbon economy gives us the potential to revolutionise our transport system.

Decarbonising our energy system will require major investment in new nuclear, renewables and clean coal.

But it'll be worth it if we can seize the prize of clean power. And with this comes greatly expanded opportunities for clean transport.

Take rail for example.

At present around 40% of the UK rail network is electrified.

In last year's Rail White Paper we rightly prioritised investment for the next five years in a massive increase in carrying capacity so that our railways can continue to meet the huge demand that has made our railway the fastest growing in Europe.

But looking beyond that I can see great potential for a rolling programme of electrification.

Electric trains are cheaper to operate than diesels, require less maintenance, and emit between 20%-35% less carbon in today’s market. And if the generation mix becomes less carbon intensive over time, as expected, then the benefits will grow.

And there are other reasons to consider going electric. Diesel engines - particularly the underfloor versions used on many of local diesel trains - are set to become more expensive, heavier and more complex to meet new EU standards. Electric trains are also zero emission at point of use – improving local air quality.

What's more electric trains can offer additional carrying capacity and improved passenger comfort compared to diesels.

I believe the business and environmental case for electrification is growing fast. As a result we are going to step up our efforts through a cross-industry working group to re-examine the business case for electrification, explore how costs can be brought down much further and agree priority schemes.

My aim is for this work to be completed later this year so we can make real progress in laying down our longer-term plans for the railways.

But as well as enabling low-carbon rail, a green energy system also gives us new opportunities to move to decarbonised road transport.

It's nice to see Julia King in the audience today. Her report on low carbon cars held out the prospect of an effectively decarbonised road transport sector by 2050.

That's a bold ambition and one I sign up to wholeheartedly.

I believe that the single most important thing Government can do to enable this transition is to set the right long term framework to encourage long-term investment and innovation and not inhibit it.

That's exactly why we've been working so hard in the EU to agree mandatory CO2 emissions targets for new cars, replacing the currently voluntary agreement

That proposal could save as much as an additional 6 million tonnes of CO2 a year by 2020.

But I think we need to be more ambitious still, which is why the UK is pushing for a target of average CO2 emissions of 100g per kilometre by 2020 - which could almost double that carbon saving.

A tough, mandatory long-term target would send a strong signal to industry to invest in low-carbon technologies and give them maximum certainty that such investment would be worthwhile.

But I also believe it is right that we also send a strong signal to consumers to encourage them to take up environmentally friendly cars.

The changes that we are proposing to Vehicle Excise Duty increase the incentives for motorists to switch to the most fuel-efficient cars and reward the drivers of the cleanest cars.

Previous reforms have already contributed to the proportion of the least polluting cars on our roads rising by more than a third since 2001, while that of the most polluting cars has fallen by a quarter,

So it's right that we look to make further progress.

Electric cars + Biofuels

There's also a potential role for Government in enabling emerging technologies to come forward.

Take electric cars for example. There are currently some exciting developments taking place internationally on electric cars.

Just last month the Chief Executive of Renault-Nissan unveiled plans to launch a battery powered car in America in 2010 and to offer a complete range of electric vehicles in every large car market by 2012.

What's more they've teamed up with a US start-up and the governments of Denmark and Israel to introduce electric cars and a network of charging points in those two countries by 2011.

So it's right that we explore, amongst other technologies, the scope to accelerate the introduction of electric vehicles here and in the EU.

And on biofuels I remain of the view that provided they are sustainable they can make an important contribution to reducing vehicle emissions.

It's clear that there are good biofuels and bad biofuels and we should look to prevent their production adding to food shortages.

But it's right that we should move forward on the basis of evidence, not anecdote.

So I look forward to the finding of Ed Gallagher's forthcoming review. And I remain committed to ensuring that in the UK we have in place a framework that gives companies the confidence and certainty to invest in sustainable biofuel technologies.

While internationally, we must reinvigorate efforts to make sure that biofuels are seen in the context of their potential contribution to greenhouse gas savings - and not as yet another agricultural support mechanism.

Stimulating choice and access, and smarter choices

When we discuss the changes we need to make in transport, we have to remember that the majority of journeys taken in this country are local in nature.

So cutting carbon emissions also requires strong leadership from our towns and cities as we seek to put local transport on a more sustainable footing.

Indeed, there needs to be a complete step change in the way that local areas think about and plan their communities.

It will be necessary to think in a new way about where people live and work, to ensure that people can access jobs easily - and have real alternatives to the car for moving around the area.

And that's something that I know that many local authorities are already doing.

The Government has provided funding through the Transport Innovation Fund to support areas considering how to deliver big improvements to public transport combined with local congestion charging.

Manchester and Cambridge have already submitted bids and we are in dialogue with a number of other towns and cities.

Congestion hits the local economy, reducing access to jobs and making places less attractive to potential employers seeking to locate their businesses. It contributes to local air pollution and higher carbon emissions. And it's increasingly clear that doing nothing about congestion is not an option.

So it is essential that local authorities use all the tools at their disposal to provide people with real alternatives about how they travel.

Central to this will be improving local bus services. In recent years we’ve succeeded nationally in reversing the decades-old slump in bus passengers – but in too many areas numbers are still declining.

Measures in the Local Transport Bill give local authorities important new powers to manage buses more effectively. The Bill makes it much easier for local authorities to introduce Quality Contracts, affording them significant control over services in their area.

Clearly it is for councils to decide what option will work best for them. But I urge them to be ambitious and think hard about what will bring about a step change in the quality of service and give local people a real choice about how they travel.

Individual also have a role

Local authorities also have a key role to play in helping people understand the transport choices open to them.

Our Sustainable Travel Towns - Darlington, Peterborough and Worcester - have shown that people are prepared to change their travel habits if they're provided with the right options, information and advice.

Each town has seen significant increases in walking, cycling and use of public transport - and double-digit reductions in car journeys. And we've seen striking increases in numbers of cyclists in our Cycling Demonstration Towns - soon to be extended to another 10 towns.

Conclusion

From the international level right down to individual travel choices, we all have a role to play in changing the way we travel to meet environmental concerns.

We need leadership from central and local Government. And we all need to think about the choices that we make over every journey we take if we're to realise a transport system in 2050 that reflects our economic priorities, our environmental commitments, and our need for mobility.

We need to take urgent action to tackle climate change. And the longer we leave it, the more expensive it will become.

So we will step up efforts to achieve the green transport vision I've set out for you today.

This is our shared challenge, and by working together in partnership, I passionately believe it can be our shared achievement.

Delivered: 05 June 2008

(This speech represented existing departmental policy but the words may not have been the same as those used by the Minister.)