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ESG fund insights

29 May 2024

The Rise of Sustainable Transport: Considerations for the Environment and Society

By ESGCheck

The Rise of Sustainable Transport: Positive and Negative Considerations for the Environment and Society

Sustainable transport has emerged as a critical focus in the quest to address climate change and urban congestion. The rise of electric vehicles (EVs), public transportation enhancements, and cycling infrastructure represent the forefront of this transformation. While the environmental and societal benefits of sustainable transport are significant, there are also challenges and considerations that need to be addressed. This article explores both the positive and negative aspects of this paradigm shift.

Positive Considerations

1. Reduction in Greenhouse Gas Emissions

The transportation sector is a major contributor to global greenhouse gas emissions. The adoption of EVs is pivotal in reducing carbon dioxide (CO2) emissions. EVs produce zero tailpipe emissions, significantly lowering the carbon footprint compared to conventional petrol and diesel vehicles. According to the International Energy Agency (IEA), electric cars emitted approximately half the amount of CO2 compared to average petrol cars in 2020, even when accounting for the electricity used for charging.

2. Improvement in Air Quality

Urban areas suffer from poor air quality due to vehicle emissions, leading to health problems such as asthma, cardiovascular diseases, and premature deaths. The shift to electric and hybrid vehicles, along with improved public transport systems, can drastically improve air quality. For instance, a study by the European Environment Agency found that EVs significantly reduce pollutants like nitrogen oxides (NOx) and particulate matter (PM).

3. Economic Benefits

Sustainable transport systems can lead to economic benefits through reduced fuel costs, decreased healthcare expenses due to better air quality, and the creation of new jobs in the green economy. The Global Commission on the Economy and Climate estimates that transitioning to low-carbon transport could save the global economy trillions of dollars by 2030.

4. Enhanced Urban Mobility

Investing in public transportation and cycling infrastructure can reduce traffic congestion, making cities more liveable. Efficient public transport systems, such as bus rapid transit (BRT) and light rail, can provide reliable and affordable alternatives to private car ownership. This shift not only reduces emissions but also alleviates traffic jams, thus saving time and increasing productivity.

Negative Considerations

1. Resource Intensity of EV Production

The production of electric vehicles, particularly the batteries, is resource-intensive. Lithium, cobalt, and nickel, essential for EV batteries, have significant environmental and social impacts. Mining these materials can lead to deforestation, water pollution, and human rights abuses in countries where these minerals are extracted. The World Economic Forum highlights the need for sustainable sourcing and recycling to mitigate these impacts.

2. Energy Source for Electricity

The environmental benefits of EVs are highly dependent on the source of electricity used for charging. In regions where coal is the dominant energy source, the overall carbon savings from EVs can be diminished. Therefore, the transition to renewable energy sources such as wind, solar, and hydroelectric power is crucial for maximising the environmental benefits of electric vehicles.

3. Infrastructure Challenges

Developing the necessary infrastructure for sustainable transport can be challenging and expensive. This includes charging stations for EVs, dedicated lanes for buses and bicycles, and upgrading public transport systems. These projects require substantial investment and long-term planning. The lack of infrastructure can hinder the adoption of sustainable transport modes, especially in less developed regions.

4. Economic Displacement

The shift towards sustainable transport can lead to economic displacement for workers in traditional automotive and fossil fuel industries. This transition requires comprehensive policies to retrain and support workers affected by these changes. Ensuring a just transition is vital to prevent social and economic inequalities.

Conclusion

The rise of sustainable transport offers substantial benefits for the environment and society, from reducing emissions and improving air quality to enhancing urban mobility and generating economic gains. However, it also presents challenges, including resource-intensive production, infrastructure demands, and potential economic displacement. Balancing these positive and negative considerations is crucial for the successful and equitable implementation of sustainable transport systems. Collaborative efforts from governments, businesses, and communities are essential to navigate these complexities and build a sustainable future.

References

  1. International Energy Agency (IEA). (2020). Electric vehicles
  2. European Environment Agency (EEA). (2019). Electric vehicles and air quality
  3. Global Commission on the Economy and Climate. (2018). The economic benefits of sustainable transport
  4. World Bank. (2020). Urban mobility and public transport
  5. World Economic Forum. (2021). Sustainable sourcing of EV battery materials
  6. Union of Concerned Scientists. (2018). Electric vehicles and renewable energy
  7. International Transport Forum. (2021). Infrastructure for sustainable transport
  8. International Labour Organization (ILO). (2022). Greening with Jobs and a Just transition

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Magellan Core ESG Fund

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TobaccoAlcoholWeaponsFossil fuel exploration, mining and productionGamblingAdult entertainment/pornography

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Strategy Equity Long Geography Global
Inception Dec 2020 Investors Retail

Emit Capital Climate Finance Equity Fund

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TobaccoAlcoholWeaponsFossil fuel exploration, mining and productionHuman rights abusesLabour rights violationsEnvironmental damageCompanies that engage in tax avoidance strategiesGamblingAdult entertainment/pornography

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Renewable energy & energy efficiencyClimate action & towards net zeroSustainable water managementCircular economy, reuse & recyclingGreen propertyBiodiversity preservation & conservationHealthy rivers & ocean ecosystemsDiversity & women's empowermentIndigenous business or cultural protectionSocial & community infrastructureSustainable transport
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