Global CO2 emissions peaked in 2019. Latin America can help reverse this trend by implementing efficiency standards to decarbonize the transport sector. A new report addresses policies that Latin America and the Caribbean can implement to improve the vehicle efficiency of their new light-duty car parks.
Most countries in the world are currently meeting in Madrid for COP25, discussing how to increase their ambitions to limit the climate crisis, and prevent the global temperature from rising above 1.5 ° C. While the news has not been encouraging so far as global CO2 emissions reach high records in 2019, there are excellent options for Latin America to meet the objectives set out in the Paris Agreement through its NDCs and decarbonize its transport sector. In particular, vehicle efficiency policies are one of the most effective tools to achieve this goal.
Why the transport sector?
The transport sector in Latin America and the Caribbean is responsible for 35% of the total greenhouse gas (GHG) emissions from burning fossil fuels. If we compare this with the rest of the world whose average emissions of the sector is 23%, we realize that reducing emissions in this sector is key to avoid a climate crisis, and a key task for the countries of the region meet their climate commitments. The total amount of GHG and other climate pollutants from the sector has steadily increased in the region since the 1970s. The time to take measures that reduce the impact of this sector on the climate crisis is now!
On the other hand, the motorization rate in the region is still very low compared to that of countries in Europe and North America, but it is growing rapidly. It is important to take measures to improve the efficiency of new vehicles that will reach our countries, and thus reduce the emissions that these will generate. In this sense, public policies that improve the efficiency of new vehicles that are going to enter our countries are effective instruments that not only reduce emissions, but also reduce fuel consumption and save consumers money by generating positive impacts on the economy.
Despite its proven effectiveness in many countries of the world, only Chile, Mexico and Brazil have implemented vehicle efficiency policies in the region, so it is important that other governments have tools to promote these measures that help them comply with its emission reduction objectives.
What are vehicle efficiency policies?
There are several public policy instruments that can increase the efficiency of vehicles, and are grouped into three categories: informational, economic and regulatory. This document analyzes two of these instruments, labels (informative) and efficiency standards (normative), because of their mitigation potential and because compared with economic instruments, they present lower political barriers to their instrumentation.
Vehicle efficiency labels are an informative instrument designed to help consumers make decisions. They are analogous to the labels of energy consumption that can be found in household appliances when, for example, consumers can compare the energy efficiency of a refrigerator with respect to the other refrigerators in the market. It is currently used in 13 countries around the world. Generally, the labels present fuel consumption data in urban areas, roads and, in certain cases, information on CO2 emissions. They seek to help consumers make more conscious and informed purchasing decisions, and therefore encourage changes in their consumption patterns.
On the other hand, vehicle efficiency standards are regulatory instruments that encourage more efficient (or less polluting) vehicles to enter the markets. In the same way that governments can prevent vehicles that do not have minimum safety measures such as airbags and belts from being sold in our countries, efficiency standards can prevent vehicles that pollute the planet from entering our borders. This is very important since, although there are many technologies that improve the efficiency of vehicles in regions such as Europe and the United States, due to low regulation in our countries, these rarely reach the region. The objective of a standard is that for every kilometer a vehicle travels, fuel consumption, and therefore CO2 emissions is lower, and this is achieved through technological improvements that manufacturers implement.
The use of labeling or efficiency standards translates into benefits such as fuel savings, increased energy security to fuel importing countries, savings in resources allocated to fuel subsidies (in countries that grant them), and reduction in GHG emissions. In some cases, they can also help reduce air pollutants depending on the technologies implemented by the manufacturers. Additionally, energy efficiency standards also provide regulatory certainty to manufacturers, allowing them to generate investment and employment.
While there are multiple benefits of these measures, there are also some risks and barriers to a successful implementation. In particular the additional costs that are generated in the industry for compliance, the “rebound effect” that could lead to an increase in the use of vehicles, the possible unfavorable impacts on air quality due to a change in fleet composition (when for example the use of diesel vehicles is increased), and finally the difficulty of presenting information that reflects the reality of driving cycles in real conditions. However, if the instruments are carefully designed and implemented, the risks and barriers can be mitigated.
How can Latin America implement vehicle efficiency instruments for vehicules?
With this new publication we seek that national decision makers find sufficient information for the implementation of these types of measures that will be crucial to reduce CO2 emissions. With the support of WRI and the IDB, Colombia, for example, is already considering the implementation of a vehicle efficiency standard and included this measure in its development plan. In analyzes made by WRI, we estimate that Colombia could reduce about 16.6 Megatons of total CO2eq between 2020 and 2026, which would be equivalent to taking 3.5 million private cars out of circulation. This, in addition, is equivalent to half of the transport sector’s commitment to the Colombian NDC. We hope that other countries will follow this example and that this report will be useful.
To learn more, see our publication.
Photo Copyright: WRI Brasil