Financing Smart and Sustainable Mobility Solutions

by | Aug 7, 2012

Urbanization can be defined as one of the mega-trends of our time: the urban population grows by 2 people every second of the day, and it will almost double in the next four decades.

One of the main challenges that cities face today is how to provide efficient and sustainable mobility: experts anticipate that, in terms of the annual number of passenger-kilometers traveled, mobility in cities will virtually treble between 2010 and 2050 and make up 64 percent of the total volume of mobility. Moreover, transportation is the second main source of energy consumption and cause of CO2 emissions in a city, ranked only behind buildings. An inefficient transport system not only damages the environment, but also costs cities and countries a significant amount of money. In the EU, for instance, congestion that frequently occurs in and around urban areas costs nearly EUR 100 billion, or 1 percent of the region’s GDP, annually.

Around the world, city planners are therefore looking at smart and sustainable mobility solutions that meet rising mobility needs in cities while simultaneously reducing energy consumption and emissions. There are a few ways to reach the goal, including by lowering mobility needs, introducing soft modes of transport (such as cycling or walking) and integrating electric vehicles into the urban environment. A shift from individual to collective transport would also significantly help reduce energy consumption and emissions. Yet, there is still a long way to go: within the EU, 73 percent of the annual passenger kilometers result from individual road transportation, i.e., individual vehicles, while 8 percent and 6 percent, respectively, are from collective road and rail transport and only 1 percent is attributed to metro and tram passengers, according to the Smart Cities Initiative.

Consequently, making public transport more efficient and more attractive to city dwellers is the need of the hour. One option more and more cities are choosing is bus rapid transit systems. As part of a multimodal mix, they are a cost-efficient and effective solution for moving people through dense urban areas. More than 40 such systems are now operating in South America, Europe, Asia, Australia and North America. For example, Seoul has introduced bus rapid transit systems to reduce congestion by making public transport more effective and attractive. The system includes dedicated bus median lanes, high-quality bus stops, real-time information for passengers and system operators and state-of-the-art buses. In Seoul, this has resulted in a fivefold reduction in travel times and a 27 percent cut in the number of accidents — within a year, according to McKinsey Global Institute and McKinsey Sustainability & Resource Productivity. Africa joined the list when Johannesburg, South Africa, opened the first phase of a USD 2.2 billion system to transport fans to World Cup matches in 2010, according to Urban Land Institute and Ernst & Young. Other cities, including Lagos, Nigeria, and Dar es Salaam, Tanzania, are also building or considering rapid bus lines to serve growing populations and promote economic growth.

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