World Conference on Transport Research (wctr) Policy Options in a World of Transport Challenges in China May 1, 2007

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World Conference on Transport Research (WCTR)
Policy Options in a World of Transport Challenges in China

May 1, 2007

Wei-Shiuen Ng (corresponding author)

Research Associate


World Resources Institute

10 G Street, NE (Suite 800)

Washington D.C. 20002

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Lee Schipper

Director of Research


World Resources Institute

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Washington D.C. 20002

1 202 729 7735 (Phone)

1 202 729-7775 (Fax)

Word Count: 5,991

This paper examines motorization trends in China, which has led to increasing energy consumption and air pollution. Three transport energy scenarios, “Road Ahead,” “Oil Saved,” and “Integrated Transport” were used to illustrate potential future motorization trends given different policy, vehicle technology, alternative fuel, and driving behavior assumptions.  In the “Integrated Transport” scenario, transport oil consumption is 12 percent of the total value in “Road Ahead” by 2020, while carbon emission is 79 percent lower.  Policies such as vehicle technology requirements, fiscal policies, and the prioritization of public and non-motorized transport are some of the suggested measures if China wants to reduce the rate of which its transport energy consumption and greenhouse gas emissions are growing. 



As the fastest growing economy in the world, China is experiencing a rapid increase in motor vehicle ownership, in the process gaining immense economic and personal mobility benefits. However, this unsustainable explosion in car ownership has led to rising congestion, increased air pollution from motor vehicles, increased oil consumption, and high traffic fatalities. A sustainable transportation system would meet the increasing demand for private motorization without compromising the economic and welfare gains from greater mobility. Although the current daily trips made by private vehicles is only 10 percent of the total in most Chinese cities, the rapid growth of private vehicles, which will no doubt increase in ownership and use, threatens the sustainability of existing transport systems.
Scenarios are used in this study to illustrate how different assumptions can lead to various outcomes. The scenarios show how effective mobility management, with the aid of fuel and vehicle technologies, could reduce oil consumption and many of the negative impacts of rapid private motorization. In addition, advanced fuel and vehicle technologies and approaches could prevent China’s conflicting economic development and environmental sustainability goals, by providing relatively smaller, safer, and cleaner vehicles to meet the growing demand. The high forecasts of private motor vehicle ownership and the subsequent oil demand imply enormous strains on urban infrastructure and energy imports. These strains would be much easier to avoid with sustainable transport policies enacted now rather than one or two decades later.

This study explores existing and potential Chinese transport and energy policy options related to private individual motor vehicles that are developed in response to energy security, air pollution, and other motorization challenges. Three different personal mobility scenarios that project different oil and energy demand outcomes in 2010 and 2020 are presented, each revealing oil demand levels and potential oil imports. Different policy options are linked to the scenarios, suggesting how they could affect vehicle use and how advanced and alternative fuel vehicle technologies could reduce improve energy efficiency.

The Rise of the Transport Sector
Today, passenger transportation in China is dominated by public transport, which carries approximately 50 percent of all urban trips in China, with cycling and walking carrying another 40 percent (Schipper and Ng, 2005). The average Chinese person travels about 1000 km/year, compared with averages of 15,000km/year for Europeans and over 24,000km/year for Americans. Although mobility in China, measured in annual personal travel still has a long way to grow, increases in travel distance do not always imply social benefits, as the benefits of private motorization could be easily exceeded by its incurred high costs often known as externalities (The National Academies, 2003).
In 2004, there were 27 million privately owned motor vehicles in China (Brown, 2004), mostly concentrated in large Chinese cities. The total number of cars, which includes private and state owned automobiles such as sport utility vehicles (SUV), was approximately 12 million, or 9 cars per 1000 people, far below the global average (He, 2005). These numbers are still considered very low globally, as by comparison, there are over 700 cars (including personal vans, light trucks and SUVs) per 1000 population in the United States, 400 in Japan, 350-500 in Europe, and 150-200 in middle income countries. However, the motorization trend in China is set to change significantly as private car ownership takes off over the next two decades.
The growth of the transport sector in China accelerated markedly after 1978, when the country underwent massive policy reforms leading to significant economic development, industrialization, and urbanization. These changes have resulted in rapid increases in motorization and urban mobility. With an increasing number of middle-class families, car ownership is no longer restricted to a selective group of governmental officials and high income families, leading to a growing demand of private cars. The national passenger car sales have increased by 77 percent from 2002 to 2003, and during the same time passenger car production has increased by 86 percent (CATARC, 2004).
Figure 1 portrays motorization in relation to income, measured in US Dollars using purchasing power parity. On a per capita basis, China’s motorization in 2003 is about what the US had in 1913, though China’s per capita GDP in 2003 was only half of US levels in 1913. The last dozen points for China in Figure 1 (bottom left) are very close to the first dozen points for Korea (from the 1970s), which fall somewhere between those of West Germany and Japan.
Rapid growth in motorization is bringing both costs and benefits to Chinese societies (Schipper and Ng, 2005). Benefits include economic growth, due to better accessibility for commercial, public and private transportation, and improved social welfare as a result of increased flexibility and mobility. On the other hand, the costs relate to energy consumption and security, environmental and health impacts, congestion, and traffic fatalities.
Energy Consumption and Security
Energy consumption and oil imports, which are increasingly driven by the transport sector, have raised concerns over energy security. In 2003, China consumed approximately 275 million tonnes of oil, of which 30 percent was imported (BP, 2004). The increase in energy consumption has resulted in China’s transformation from an oil exporter to a large net oil importer (Figure 2). Absent specific measures, the demand for crude oil is expected to increase by 12 percent annually until 2020 (He, 2005).
The Chinese transport sector is becoming a leading driver of overall oil consumption increases, contributing more than one third of China’s total oil consumption in 2002, compared to about 16 percent in 1980 (IEA, 2004a). From 1990 to 2002, gasoline and diesel consumption in the transport sector increased 157 percent (IEA, 2004b), yet private car use constitutes a relatively small share of oil consumption (Figure 3). However, the number of cars in China has increased by 75 percent since 2001 and will quickly dominate the share of oil consumption.
Environmental Pollution
A major environmental impact related to motorization comes from pollutants produced during the combustion of gasoline or diesel fuel in vehicle engines. Such pollutants include carbon monoxide (CO), ozone (O3), through its atmospheric precursors volatile organic compounds (VOCs), nitrogen oxides (NOx), and fine particulate matter (Walsh, 2003a). Respiratory diseases such as infections, asthma and decreased lung efficiency are common in polluted urban cities (Stares and Liu, 1996), in addition to reduction in pulmonary function. These public health impacts will not only lead to losses in individual welfare, they could also inflict substantial economic costs upon the society.
Vehicular emissions comprise a high and rising proportion of total urban air pollution, and this phenomenon is increasingly being observed in many Chinese cities, as air pollution from industry and households are gradually declining. Studies have shown that 45-60 percent of NOx emissions and 85 percent of CO emissions are from mobile sources in most Chinese cities (Walsh, 2000). It is estimated that by 2010 in Shanghai, vehicular emissions will produce 75 percent of total NOx emissions, 94 percent of total CO emissions, and 98 percent of total HC emissions (Wang and Wu, 2004). Even with improved emissions controls and cleaner fuels, mobile-source pollution is likely to continue rising due to increased use of individual vehicles and total distance traveled.
The Government of China has enacted various policies and regulations targeted at improving ambient air quality in urban cities, reducing congestion, and improving transport energy efficiency. At the same time, the development of the domestic automobile industry has been encouraged and supported. The challenge for China is to resolve the tensions between competing national priorities, to implement and enforce policies at a local level.
Developing the Automobile Industry
The Chinese automobile industry has been one of the most rapidly growing in the world. Over the 1999 to 2004 period, Chinese production of motor vehicles has increased by 177 percent, from about 1.8 to 5.7 million vehicles per year (OICA, 2005). China’s share of global production in terms of quantity has risen from 3.3 percent to almost 8 percent in five years. The development of the Chinese automobile industry has resulted in significant economic benefits. This is a sector that has employed 1.8 million people and has a total asset of US$61.3 billion (The National Academies, 2003), as well as receiving significant levels of foreign direct investment (Gallagher, 2003). Total investment in new automobile manufacturing capacity is projected to reach US$25.5 billion by 2007 in China (Xinhuanet, 2004a).
The rapid growth and development of the Chinese automobile industry has resulted in a new auto industry policy, launched by the National Development and Reform Commission (NDRC) in June 2004 (Xinhuanet, 2004b). This policy is aimed at slowing investment, and consolidating the auto industry, which has been one of the most over invested industrial sectors in China mainly because of massive investment from foreign automakers and domestic State and private enterprises. Other goals are to further develop an automobile market largely dominated by private consumption, rather than state owned vehicles and supporting alternative fuel and advanced vehicle technologies.
Reducing Air Pollution
Through a series of legislative acts, regulations, and standards, the Chinese government has responded to the growing air pollution and public health risks. These include national ambient air quality standards for different air pollutants, emission standards, and fuel quality standards. Generally, the established legislation states that the national government takes measures to control air pollutants, with local governments having the responsibility of implementation and enforcement (Wang and Wu, 2004). The 2000 Chinese Clean Air Act requires motor vehicles to meet emission standards and prohibits the manufacture, sales, or imports of motor vehicles that have levels higher than the standards set by SEPA, and encourages the development and sale of clean fuels for motor vehicles.
A key regulation to improve air quality and energy security is the fuel economy standards announced in October 2004. These standards require the auto industry to produce more fuel-efficient vehicles. The first phase of the standards will be implemented for newly introduced vehicles sold from July 1, 2005. For continued vehicle models, vehicles sold must meet the same standards by January 1, 2006. A stricter second phase for new car models entering the Chinese market will be in effect in January 1, 2008 (An and Sauer, 2004).
These standards establish maximum fuel intensities (fuel/km) for new vehicles, which are a function of weight and transmission type. Future uncertainties regarding consumer preferences and vehicle weights make it difficult to evaluate the overall likely impact of the fuel economy standards. A shift toward lighter cars could lead to lower average fuel intensity than those required by the standards alone. The 2003 average new vehicle weight in China was about 1,500kg (Sauer and An, 2004), which is considered heavy by international standards. As seen in many other countries, the weight and engine size of new vehicles tends to increase as income rises, and because China’s fuel economy standards are weight-based, they would not inhibit such a trend.
Air pollutants from mobile sources are also highly dependent upon the quality of fuel used. In order to improve air quality, the government of China has implemented the “Emission Standard for Exhaust Pollutants from Light-Duty Vehicles” in 1999 by SEPA. This law set emissions standards equivalent to Euro I standards (He and Cheng, 1999). Increasingly, China is following emission standards regulations from the United States, Europe, and Japan, even though the level of control and enforcement is still less stringent in China. The government nevertheless recognizes the need to improve its air quality and has implemented Euro II equivalent fuel quality standards in Beijing and Shanghai in 2003. SEPA in Beijing has also charted emission standards that are equivalent to Euro III standards and expects the entire country to adopt Euro III level by 2008 (Li, 2005).
Public Transportation
According to the 2004 National Energy Policy, public transport, buses and taxis, should be the main access mode in big cities, with rail transport supporting the transport network, while using personal cars and bicycles as supplements. In medium and small cities, public transportation will be developed as well as the use of personal cars.
Public transport systems are in high demand in mega and middle-sized cities, where urban public transport is being actively developed and encouraged. For instance, municipal authorities in Shanghai are now putting a high priority on buses and seeking to increase public transport travel volume (People’s Government of Shanghai Municipality, 2002). Overall, the Government of China is publicly encouraging the construction of bus rapid transit (BRT) and other public transit modes. Beijing is projected to have an increase of 100 km in BRT bus routes, leading to a total length of 360 km for the entire network by 2008. BRT systems have also been integrated to existing transport networks in cities such as Kunming and Hangzhou.
In order to better understand the future of the transport sector, this study develops three scenarios with different transport assumptions in areas of the number of cars and distance driven (Schipper et al., 2002), vehicle size/characteristics, and vehicle technology. The scenarios are constructed in a bottom-up fashion, in part using parameters and extrapolations based on experiences in two countries, Japan and the Republic of Korea. Each scenario is accompanied by policies that could plausibly lead to the outcomes described. It is important to note that the scenarios are not predictions, but illustrations of future energy consumption and emissions if certain policies or actions were in place to shift travel behavior and motorization trends. While we use vehicles fees and taxes and other policy instruments to differentiate the scenarios we illustrate, there is no certain way of showing that a given instrument in a scenario causes the degree of differentiation from other scenarios. The disaggregation into vehicles, fuel economy, distance traveled and total fuel consumed is necessary because presently only data on the present number of automobiles registered exist. Indeed there are no data on gasoline consumption exclusively for passenger automobiles in China. Without reasonable assumptions about the other components, the total amount of gasoline in the base year is unknown. By building these assumptions in part through observations of what the same components are for nearby or similar countries, or out of partial information obtained, total fuel use is synthesized from its components. Knowing how the components tend to respond to driving forces elsewhere we can make a reasonable case for the components in 2020.
The quantitative assumptions for the scenarios, as well as the qualitative assumptions for the driving forces, are shown in Table 1. However, fuel taxes, vehicle use fees, and other policies are not quantitative and are simply used as qualitative measures to trigger the other input assumptions in the scenarios. These outcomes are not predictions, but by setting up three possible futures, they can provide a picture of the potential impact of various technologies and other options that could significantly affect personal automobiles and their use.
Road Ahead
The “Road Ahead” (baseline) scenario assumes the current growth rate of motorization continues. Conventional gasoline vehicles are the dominant vehicle technology, car use is not restricted and no significant fuel taxes are implemented through 2020. No other vehicle or fuel policies other than fuel economy standards are assumed to be implemented and enforced. In this scenario, the market penetration of HEVs is 5 percent, CNG 2 percent, and small electric cars 0.5 percent by 2020. China reaches the same number of cars per unit GDP in 2020 as Korea did in 1993. The best estimate of China’s on-road fuel economy today is 9.5 liters/100 km (An and Sauer, 2004; Sauer and An, 2004). In “Road Ahead,” this figure improves simply because of improved technology and the likely rise in the demand of smaller cars (i.e., under 1,500kg).
Oil Saved
“Oil Saved” is driven by a clear move to save oil, backed by phasing-in of fuel taxes until they reach the level of those in Japan in early 2005, at approximately $2.70/gallon (Oil Market Report, 2005). Apart from conventional gasoline vehicles, CNG fuels 20 percent of cars by 2020, obtaining 5 percent better fuel economy (US DOE, 1999) and small electric vehicles power 10 percent, using less primary energy than gasoline or even CNG vehicles. In this scenario, there are 10 percent fewer cars than in the “Road Ahead,” consistent with the small effect of higher fuel prices on car ownership observed by Johansson and Schipper (Johansson-Stenman and Schipper, 1997). Spurred by higher fuel prices, fuel economy improves much faster than in “Road Ahead.” This encourages a market share of 15 percent HEV by 2010 and a more significant 50 percent by 2020. The hybrid vehicles use only 80 percent of the fuel per km of conventional gasoline cars, a figure that falls to 75 percent by 2020 as technology improves.
Integrated Transport Approach
This scenario is a result of thoughtful policies and successful prevention of serious traffic congestion. The outcome is bolstered by the popularity of small gasoline and electric cars that require significantly less road and parking space than conventional cars. In this scenario, small and efficient vehicles will play a considerable role in reducing fuel consumption. Hybrids, together with small gasoline, electric and CNG vehicles dominate the market, with conventional gasoline vehicles constituting only 30 percent of the total market by 2020.
Congestion, parking and access difficulties, as well as the implementation of European level fuel taxes and different transport policies suppress the total number of cars to approximately 50 percent of what is estimated in “Road Ahead” in 2020. Similarly, distance traveled per car plummets to 8,775 km per year by 2020 (Table 1) because of the high costs of driving, and the options of good public transport systems.

Energy Consumption
The “Road Ahead” scenario demonstrates that if car ownership and use is unconstrained, oil consumption will continue to increase rapidly together with the number of automobiles. The two other scenarios offer significantly contrasting results and present important alternative outcomes led by policy options that are worth considering (Figure 4).

Energy use in each scenario is broken down by vehicle and fuel type in Figure 5. Compared to “Road Ahead,” energy use is 38 percent lower by 2010 and 78 percent lower by 2020 in the “Integrated Transport” scenario. Total 2020 oil use in “Oil Saved” is approximately 55 percent less than in “Road Ahead,” but it is still more than two times higher than oil use in “Integrated Transport.” Additionally, the total oil consumed in 2020 in the “Integrated Transport” scenario is only marginally higher than in 2003. This distinction shows how transport policies can indirectly lead to huge oil savings and energy security consequently. In “Integrated Transport,” oil use is a mere 300 kbpd by 2020, 12 percent of its value in “Road Ahead.”

Carbon Emissions
Using our input assumptions, we estimated 2003 carbon emissions from cars in China at around 8.84 million tonnes of carbon (MtC) (Table 2). Emissions will grow to 20 MtC in 2010 and 102 MtC in 2020 in “Road Ahead,” with the assumptions that no additional policies other than existing fuel economy regulations will be implemented (Figure 6). For comparison, IEA (IEAb, 2004) foresees China’s transport-related CO2 emissions at 162 MtC by 2020, up from 67 MtC in 2002.
In the second scenario, “Oil Saved,” improved fuel economy, largely because of a high penetration of hybrids and restraints in the size and power of cars could reduce carbon emissions in 2020 by 50 percent, when compared to the “Road Ahead” scenario in the same year (Figure 6). When compared to the base year, 2003, the increase in carbon emissions is 480 percent in 2020 (Table 2). One of the driving forces for this decrease in carbon emissions is a shift from present fuel pricing to the Japanese or European level of fuel taxation.
In “Integrated Transport,” various transport policies are assumed to have a profound impact on energy use, leading to 40 percent lower carbon emissions in 2010 and 79 percent in 2020 (Figure 6 and Table 2) compared to the “Road Ahead.” Although carbon emissions will still increase by 146 percent from 2003 to 2020, this amount is still significantly lower than the 1051 percent increase illustrated in the “Road Ahead” scenario (Table 2). Primary energy use increases by only a factor of 2.5, which is 22 percent of the level in the unconstrained “Road Ahead” scenario in 2020.
China already has a strong set of policy measures that can assist in achieving its energy security, air quality, and other goals. This study proposes additional options that will have an impact on vehicle ownership, vehicle use, infrastructure use, infrastructure access, road space use, and fuel demand, leading to increased energy efficiency, increased mobility, and reduced transport emissions. Most of these policies are implied in the assumptions underlying the developed scenarios, where their impacts are reflected in the scenario results.
Alternative Fuel Requirements
Fuels other than gasoline and diesel have already been used in the Chinese transport sector. The two alternative transport energy sources discussed in this study are CNG and electricity. It is likely that the use of natural gas for transportation will continue to increase in order to meet the growing need for clean transport fuel. Natural gas is now used in approximately 110,000 vehicles (mostly buses and taxis) in 12 Chinese cities (Walsh, 2003b). This fuel is however, constrained by the supply of natural gas, and the fact that it is harder to transport than oil. Therefore, despite it being a relatively clean fuel, CNG operated vehicles might be limited to a smaller role in the transport sector but should be used in public vehicles, in polluted urban areas.
Electricity is another clean transport energy source with minimal emissions impact. It is important to note that although emissions may be produced during the production of electricity, depending on the type of electric power generation, electric vehicles are still effective when used for short travel distances especially small electric cars used in urban cities. Since the main barrier to using electricity in motor vehicles is the s ss torage of electricity (Walsh, 2003b), further vehicle technology development is required for greater battery storage systems.
Motor Vehicle Taxation
When integrated into transport policies, taxation could efficiently manage transport demand, as it encourages mode shifts and be a good source of revenue. Current taxes applicable to motor vehicles in China include VAT, excise tax, vehicle acquisition tax, and vehicle usage tax (Huang, 2005). Vehicle usage tax in China is collected on an annual basis and the amount of tax paid depends on the type of vehicle. An annual tax offers more flexibility than sales tax, as tax rates can be altered over time and the burden is distributed over a longer time period for vehicle owners (Schwaab and Thielmann, 2002).
Different features might be incorporated into vehicle taxation according to different transport strategies. For instance, taxation could be implemented by vehicle type, vehicle price, vehicle size, test emission and noise levels. A differentiated system, as applied in Sweden and Germany, offers incentives for vehicle owners to switch to low emission vehicles (Breithaupt, 2002). This is often true when vehicle taxation is differentiated according to specific emission standards, where taxes are higher on more polluting vehicles. Vehicle manufacturers may also be encouraged to develop less polluting vehicles that could be preferred by consumers due to lower taxation differentiation (Schwaab and Thielmann, 2002). However, it is important to note that vehicle taxation, unlike other taxation options, does not contribute to variable costs of transportation and therefore is unlikely to influence vehicle miles traveled or other driving habits. Vehicle taxation would be the highest in the “Integrated Transport” scenario, as authorities reduce congestion and private motorization demand by increasing vehicle costs.
Fuel Taxation
Using fuel taxation as a policy instrument can recover the variable costs of driving by charging vehicle users for transport infrastructure indirectly through individual use. Since fuel is one of the highest and most visible variable costs of vehicle use, fuel taxes encourage drivers to make more efficient use of their vehicles, reduce trip frequencies, and even switch to less fuel-intensive vehicles.
The level of fuel taxes imposed should be enough to abate vehicle emissions and serve as revenue for transport infrastructure and maintenance purposes. The revenues collected from transport fuel are usually allocated for transport purposes, as seen in many other developed, transition and developing countries (Carruthers, 2002). Fuel prices should include taxes to reflect the perceived externalities and risks of foreign oil imports, and fees to reflect the environmental damages related to the fuel quality.
If fuel prices continue to remain low in China, energy consumption and emissions from the transport sector could follow the projections in the “Road Ahead” scenario. If China wants to reduce its energy consumption to levels projected in the “Oil Saved” and “Integrated Transport” scenarios, a Japanese-equivalent rate of fuel taxes should be implemented in order to encourage less oil consumption by individual consumers. An increase in fuel taxes will lead to a stronger interest for advanced vehicles and alternative fuel vehicle technologies.

Road Pricing
Road pricing is another demand management strategy through which drivers pay directly for utilizing public services. Some examples are toll roads, toll bridges, and congestion pricing systems, whereby drivers are charged when entering specific zones during certain time periods. Revenue collected can be used to cover investments costs of transport infrastructure and maintenance, including alternatives to cars. These approaches can reduce overall vehicle use and shift some travel pattern to less congested times. Since car fuel use/km rises with congestion, congestion measures tend to slightly improve fuel economy.
Charging for scarce road space is an important strategy for Chinese cities, where central areas have as little as one fifth of the space per capita compared with even more traffic congested cities such as London, Paris or New York. The Shanghai Metropolitan Transport White Paper (People’s Government of Shanghai Municipality, 2002) discusses electronic road pricing (ERP), which is a model that Singapore has followed in its general transport strategy for the past two decades (Menon, 2000). This pricing scheme is sophisticated, as vehicles are charged on a per entry basis and could vary depending on the day, time of the day, the type and size of vehicle, congestion level, and the road and place of entry (Breithaupt, 2002).
Road pricing policies are extremely important in the “Integrated Transport” scenario, where congestion is largely avoided as a significant problem because of road pricing and other complementary measures to regulate car use. If this scenario is to be realized, it is important to announce and implement road pricing policies early, before too much investment in private automobiles and on infrastructure that is dependent on private vehicle use is made in the most congested zones.
Public Transportation and Non-Motorized Transport
An ideal and efficient public transport system has to provide speed, and must be convenient, comfortable, and affordable in order to be attractive as a good alternative transport mode. If mass transit system such as conventional buses, fast buses in dedicated corridors (i.e., BRT), metros, and other rail-bound systems are to compete with private cars or even motorbikes, they must improve with respect to speed and cost, as an increasing number of Chinese families can afford private motor vehicles.
Non-motorized transport (NMT) users, such as pedestrians and cyclists are also more efficient users of scarce road space than private motor vehicles, along with being the most efficient and environmentally sustainable when making relatively short trips (Hook, 2002). In virtually every other country, however, NMT has yielded to motorized public transport and then individual vehicles. The most notable countries where NMT retains 20 percent or more share of all trips in urban areas are Denmark and the Netherlands. High fuel taxes, careful urban planning, an integrated network of dedicated bike lanes, and a strong component of local commercial activities keep these alternatives to cars important.
The Government of China could continue to encourage public transport investments to enhance its quality and promote cycling and walking within urban cities. Good alternative transport modes provide options to private car ownership and use, and will limit congestion and transport pollution. This phenomenon is projected in the “Integrated Transport” scenario, where severe traffic congestion starts to restrict total car utilization and significant charges are added to increase the total cost of driving at the same time. In the “Oil Saved” scenario, the use of public transportation will also increase as higher oil prices and taxes will discourage private vehicle use. The challenge for China is to increase the speed, reliability and convenience of its public transportation systems before too many individuals are choose to use private transport modes.
The trends and scenarios examined in this study illustrate important choices Chinese policy makers must confront. Given the rapidity of motorization growth in China, authorities have to act fast in order to avoid traffic safety, urban congestion, pollution, and energy problems that will increase together with continued rapid motorization. Cleaner, safer, rapid transportation systems that increase access to more people have to be developed, rather than following the narrower path of rapid individual motorization, as scenes from congested Beijing and other major Chinese cities already suggest.
A key issue so far overlooked by Chinese authorities is that many motorization impacts depend not only on the emissions per km of vehicles, but the total distance driven, as well an interaction term. If the present trends in car use continue, the huge increase in distance traveled will increase carbon emissions, local air pollution and energy consumption significantly, hence offsetting much of the reduced emissions through current regulations. The interaction term arises because cold starts (i.e., many short trips), idling at traffic lights, or rapid accelerations all increase average emissions per km. The latter two effects may be worsened by poor traffic conditions.
The use of advanced and alternative fuel vehicle technologies could reduce the transport externalities while meeting the demands for private car use. With the appropriate policy actions, it is possible to have widespread use of clean, small, and efficient cars, especially if car use is regulated by both restraint policies and strategic provision of alternative transport means.
The “Integrated Transport” scenario is driven by an assumption that as road area density decreases, there will not have enough physical space to accommodate the motor vehicles growth as illustrated in “Road Ahead”. Therefore, a vision of a potential future Chinese city with minimal congestion delay and improved air quality is shown in this third scenario. A strong-willed group of stakeholders is required to develop efficient public transport systems, maintain safe avenues for walking and cycling, and to regulate the use of private automobiles in crowded and polluted cities. We acknowledge that apart from the few cities where congestion pricing or related measures have been introduced, few authorities have been able to both restrain private vehicle use and bolster public transport so that the latter becomes truly competitive with the former, and provides faster, cleaner and more affordable mobility.
Fuel taxation and road pricing play a major role in reducing vehicle use, energy consumption and carbon emissions in “Integrated Transport.” Private car users will bear the burden of increased taxes and charges, but the potential results of less driving and congestion will benefit the huge majority of pedestrians, cyclists, and bus riders. Finally, the more revenue is channeled into infrastructure projects, congestion alleviating projects, and alternative transport development, the more the public will accept the imposition of relevant charges.
Advanced vehicle, alternative vehicle and alternative vehicle fuel technologies already exist and could be affordable if China creates a market for these technologies. However, it is important to note that even if the entire Chinese fleet of motor vehicles is transformed to advanced or alternative fuel vehicles, the basic problems of motorization, such as heavy congestion and road traffic accidents will still persist. Additionally, cleaner vehicles and fuels alone may not eliminate air pollution if the distance traveled per vehicle is not also reduced. Therefore, vehicle demand has to be optimally managed and regulated in order to reduce the adverse impacts of transportation. Advanced and alternative fuel vehicle technologies are part of the solution to reduce such adverse motorization impacts, but appropriate policy measures that could change travel patterns have to be implemented and enforced as complementary tools.

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  1. Walsh, M. P. (2000) Transportation and the Environment in China. China Environment Series (3). Woodrow Wilson Center Environmental Change and Security Project. The Woodrow Wilson Center.

  1. Walsh, M. P. (2003a) The Need for and Potential Benefits of Advanced Technology Vehicles in China. Hybrid Vehicle Technology Workshop. The China Sustainable Program, the Energy Foundation.

  1. Walsh, M. P. (2003b) Motor vehicle pollution and fuel consumption in China: the long-term challenges. Energy for Sustainable Development. VII (4).

  1. Wang, H. and Wu, C. (2004) Environmental Institutions in China. Urbanization, Energy, and Air Pollution in China: The Challenges Ahead, Proceedings of a Symposium. The National Academies Press.

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  1. Xinhuanet. (2004b) China Issues New Auto Rules. In: APECC News Briefing, 1(1) July. Auto Project on Energy and Climate Change (APECC), China Program.

TABLE 1 Transport and Technology Scenarios Assumptions



Road Ahead


Oil Saved

Integrated Transport

GDP and Population

GDP projected to increase at 6 percent annually.

GDP projected to increase at 6 percent annually.

GDP projected to increase at 6 percent annually.

Motorization Rate of Increase

China reaches the car/GDP ratio that Korea had in the mid 1990s by 2020.

With higher oil

prices and taxes, the number of cars in 2020 is 10 percent lower than it is in “Road Ahead.”

With space being a severe constraint in Chinese cities and the implementation of parking charges, fees and taxes, the number of cars in 2020 is 50 percent less than in “Road Ahead.”

Total Number of Cars (Thousand)

2010: 22,806

2020: 145,733

2010: 20,526

2020: 131,159

2010: 18,245

2020: 72,866

Car Characteristics (Weight)

Average weight falls to 1200kg.

Average weight falls to 1,200kg and power is lower than in “Road Ahead.”

Average weight

falls to less than 1,000kg as mini-cars become popular.

Car Utilization - Distance Traveled (km/vehicle/year)

2010: 14,496

2020: 12,484

2010: 13,466

2020: 10,238

2010: 12,948

2020: 8,775

Fuel Choices

Almost all cars run on oil, with 1 percent of total motor vehicle fleet based on CNG in 2015 and 2 percent in 2020.

20 percent of motor vehicles use conventional gasoline. 15 percent of vehicle share are HEVs in 2010 and 50 percent in 2020. 10 percent of vehicles are CNG in 2010, 20 percent in 2020, and 10 percent are electric in 2020.

In 2020, 30 percent of total motor vehicles are gasoline vehicles, of which 15 percent are small vehicles. Market penetration of HEVs is 25 percent, small electric cars 25 percent, and CNG cars 20 percent.

Assumptions made but not quantified in the scenarios

Fuel Taxes

(Crude oil price in 2005 assumed to be approximately US$50 (2005) per barrel)

US level of taxation, i.e. approximately US$0.20 (2005) per liter.

Japanese/European level of taxation, i.e. approximately US$0.70 (2005) per liter.

Japanese/European level of taxation, i.e. approximately US$0.70 (2005) per liter.

Vehicle Use fees



Significant charges on vehicle use in cities such as road pricing and parking charges.

Other Policies


Encouragement of alternatives to traditional gasoline cars, i.e., hybrids, CNG, mini cars.

Urban transport policies actively promoting the use of public transportation systems.

TABLE 2 Carbon Emissions from the Three Scenarios


Carbon Emissions (Million Tonnes, MtC)




Road Ahead

Oil Saved

Integrated Transport














Percentage Increase from 2003 (%)









FIGURE 1 Comparison of car/light truck ownership in U.S., China, Korea, Japan, and West Germany.

Notes: The horizontal axis shows per capita GDP converted to $US at purchasing power parity (PPP). The range of years for each country covered by this GDP range is shown in the legend. Sources: US Federal Highway Administration (various years), National Statistical Abstracts and Transportation year books (vehicles), International Energy Agency Energy Indicators Data base (vehicles for w. Germany and Japan) and OECD (for PPP conversions, GDP and population data).

FIGURE 2 Oil production, consumption and exports in China.

Data obtained from IEA(b) (2004) and BP (2004). Negative values indicate imports.

FIGURE 3 Oil consumption share in 2001 road transportation in China.

Adapted from An (2003).

FIGURE 4 Energy consumption levels in the three scenarios.

FIGURE 5 Energy use for cars, by fuel and propulsion.

Primary energy required for electricity generation and transmission is included, but no primary adjustments were made for production, transmissions, or distribution of gasoline or CNG.

FFIGURE 6 Carbon emissions from motor vehicles of different technologies by fuel.

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