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Alan McKinnon – Professor of Logistics

THE 
LOGISTICS BLOG

Current issues in logistics and transport

A global carbon reduction target for freight transport?

The so-called ‘science-based’ approach to setting carbon reduction targets for business is gaining traction. In my opinion, it should really be called the ‘climate science-based’ approach as its origins lie in climate modelling, in particular calculations of the maximum amounts of greenhouse gas (GHG) that we can emit to stay within a 2o C temperature increase by 2100. Other aspects of the target-setting process are more in the realms of social science and require much higher levels of subjective judgement.

The Science Based Targets (SBT) initiative is nevertheless to be welcomed as it aims to bridge the gap between corporate efforts to reduce carbon intensity and the planetary imperative of cutting total emissions. Even quite large reductions in carbon intensity can be wiped out by increases in the level of activity. So companies must accept that absolute reductions will be needed, possibly enforced by regulation at some point. This presents major analytical, commercial, managerial and political challenges.

Arguably these challenges will be greater for freight transport than for many other sectors. The SBT initiative could find ‘no activity information’ for freight in the two main reports, by the IPCC and IEA, on which its sectoral analyses are based. It therefore used monetary surrogates and treated freight as a residual sector whose emissions were calculated by subtracting those of other forms of transport – a somewhat crude method of emission target-setting.

Data limitations also frustrate efforts to conduct a ‘marginal abatement cost’ analysis for freight transport to measure the relative cost of saving a tonne of GHG in this sector. This too is problematic as MAC estimates help to determine how big each sector’s contribution to total GHG should be. Available evidence suggests inter-sectoral variations in decarbonisation costs will be large and freight will be at the upper end.

The close inter-dependence between freight transport and many other sectors further complicates target-setting. For example, geographical patterns of production and trade are likely to change over the next 35 years to reflect spatial variations in the rate at which electricity decarbonizes, the climate changes, water reserves are depleted, population migrates etc. As the servant of other economic and social activities, freight transport will have to adjust to these external forces. It is possible that to help other sectors meet their carbon targets and adapt to climate change, freight volumes will have to rise, even more than predicted.

So setting an absolute carbon reduction target for freight transport in isolation would seem very questionable. Indeed it could be counter-productive if it resulted in quantitative controls being imposed on logistical activity which prevented other sectors from attaining their GHG reduction or climate adaptation goals. It is not yet possible to estimate by how much meeting these wider goals will inflate the rates of freight traffic growth factored into current forecasting models.

Nor is it clear how the business community will react to the setting of an absolute carbon reduction target for the freight sector. If a consensus emerged that it could be achieved entirely by reductions in carbon intensity, an amplification of current decarbonisation efforts might suffice. ‘Roadmapping’ exercises are underway in some countries, such as the UK, Germany and the Netherlands, to see how far phased deployments of a broad range of technological and operational measures might take us along the decarbonisation pathway.

It may not be far enough. The carbon reductions expected of the freight sector by 2050 may be so deep that the growth of freight movement may have to be suppressed. It is then that absolute targets will bite and new mechanisms will need to be found to allocate the available freight carbon credits among sectors, transport modes, carriers, regions etc. This is still a distant prospect, but setting ‘science-based’ targets for absolute reductions in freight-related GHG emissions puts us on a trajectory that will lead in this direction.

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© Professor Alan McKinnon 2017

Kuehne Logistics University
Hamburg
Germany

contactme@alanmckinnon.co.uk

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© Professor Alan McKinnon 2017

 

Kuehne Logistics University
Hamburg
Germany

 

contactme@alanmckinnon.co.uk

 

Contact me

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