Fuel economy measures could cut Commonwealth countries’ cumulative oil bill by US$3.2T through 2050
22 November 2012
Commonwealth countries can cut their cumulative oil bill by £2 trillion (US$3.2 trillion) through to 2050 and can help cut the world’s road transport energy use and CO2 emissions by nearly half in that same time, by improving vehicle fuel economy, according to an opinion paper recently published by the Commonwealth Advisory Bureau (CAB) and sponsored by the Global Fuel Economy Initiative (GFEI).
The Commonwealth is a voluntary association of 54 countries that support each other and work together towards shared goals in democracy and development. The Commonwealth is home to two billion people. Member countries come from six regions: Africa (19); Asia (8); the Americas (3); the Caribbean (10); Europe (3); and the South Pacific (11).
The association has roots as far back as the 1870s. It was reconstituted in 1949 when Commonwealth Prime Ministers met and adopted the ‘London Declaration’ where it was agreed all member countries would be “freely and equally associated.”
In an Opinion Piece for the CAB, Dr. Lew Fulton from the University of California Davis, a GFEI partner, warns that the oil importing countries, which make up the vast majority of the Commonwealth, could face high economic costs given the explosion in the number of vehicles on their roads over the next few decades.
The number of road vehicles, and road fuel use, in Commonwealth countries could double by 2030 and increase four-fold by 2050. Given that about half the Commonwealth’s and world’s oil is used in transport and oil accounts for about 95% of transport fuel use, this could spell economic disaster for the oil importing countries which make up the vast majority of the Commonwealth.—Dr. Fulton
Focusing on Kenya, Dr. Fulton warned that with rapidly increasing motorisation, that country’s total fuel bill could reach $75 billion by 2030 with devastating consequences for the country’s economy.
However, with support from the GFEI, Kenya has begun to explore steps towards cutting this cost increase by at least a quarter by 2030 and by half by 2050. These savings could be even greater if they were combined with other transport policies, such as shifting vehicles to new fuels, and curbing car travel growth through sensible transport policies.
To avoid a fuel induced economic disaster, Dr. Fulton urged Commonwealth countries to address the following key areas:
Measure vehicles and give consumers the information they need. Countries should implement a fuel economy labeling system, based on the tested score of each model available in the market;
Send price signals. The most important price signal that will spur consumers to save fuel is a tax on that fuel;
Set fuel economy standards. The most reliable method to improve the fuel economy of new cars is to require that it happens. Apart from India and countries in the EU, no Commonwealth countries have as yet adopted fuel economy, or CO2 emission, standards;
Regulate vehicle imports. Import regulations could involve minimum efficiency standards for all imported cars and trucks, either overall or separately for each vehicle class.
The paper has been sent to the High Commissioners of Commonwealth member countries based in London. Dr. Fulton and GFEI Executive Secretary Sheila Watson also briefed the High Commissioner for the Republic of Trinidad and Tobago His Excellency Garvin Nicholas in detail on the paper. Trinidad and Tobago is interested in starting discussions on fuel economy with the GFEI.
Dr. Fulton is Co-Director, NextSTEPS Program, Institute of Transportation Studies, University of California Davis, and formerly of the International Energy Agency (IEA).
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