Transport emissions in all CAREC countries are growing significantly faster than overall GHG emissions, showing the importance of introducing effective measures to curb these emissions. The report “Exploring the Impact and Opportunities of Carbon Pricing in the Transport Sector in CAREC Countries” published by the Asian Development Bank (ADB) aims to evaluate global and regional trends in carbon pricing in the transport sector and to identify carbon pricing opportunities in the Central Asia Regional Economic Cooperation (CAREC) Program. The report assesses global trends and policies in carbon pricing mechanisms and their application in the transport sector, analyzes the status of CAREC countries in carbon pricing mechanisms, and develops a potential pipeline of projects for the CAREC region.
The report highlights how the main measures identified by CAREC countries to reduce GHG transport emissions relate to electric mobility, low-carbon fuels, expansion and improvement of public transport services, nonmotorized transport, efficiency improvements in the transport sector, and shifting road to rail and road to shipping for both freight and passenger transport. CAREC countries have shown that the transport sector can play a role in carbon markets. The report suggests that significant revenue streams for governments can arise from a carbon tax on fuels. Such revenue streams can form part of the general budget and be used to reduce other taxes; they can be returned to the population or companies, or they can be earmarked for specific purposes, such as road construction or GHG mitigation projects. If carbon tax revenues finance GHG mitigation projects the impact would be twofold: a reduction of fuel consumption due to the carbon tax and related fuel price increase, plus a reduction in GHG emissions due to investments in GHG mitigation projects.
The report proposes the promising transport project types for carbon markets in terms of potential GHG reduction magnitude and the availability of internationally approved methodologies such as electric mobility projects, urban public transport projects, and rail projects. These projects are often more appropriate for other forms of climate finance, e.g., as offered by the Green Climate Fund. The report recommends that countries should build a pipeline of transport projects for national or international carbon markets, especially in the areas of electric mobility, urban public transport, and rail, thereby contributing toward achievement of the conditional and unconditional targets as defined in countries’ NDCs.
Access the report here