From Sochi to São Paulo, we’re currently seeing some major new transport infrastructure schemes springing up across the world; but who is picking up the tab for such projects? A new report from the World Resources Institute’s (WRI) EMBARQ and Climate programmes is the first comprehensive attempt of its kind to quantify who is funding new transport infrastructure initiatives around the globe. It also looks at the type of transport systems the money is being spent on.
The study, entitled ‘The Trillion Dollar Question’ draws its findings from data supplied by, among others, the Organisation for Economic Cooperation and Development, the International Monetary Fund, and the World Bank.
In summary, the figures show that total global transport investment lies in the region of US$1.4 and US$2.1 trillion each year. Of that figure, slightly over half is derived from private sources, with the remainder – US$569 billion to US$905 billion – coming from government or state sources.
The report goes on to explain, “Investment – both public and private – is concentrated in a few countries, led by the United States and Japan.” Although the lion’s share of private investment takes place in wealthy economies such as these because they’re deemed less risky, the report continues, “Private investment in low and middle-income countries is limited but growing, especially in rapidly urbanizing and motorizing countries.”
Embroiled in oil?
Indeed, it would seem the combustion engine is winning the battle for funds, both private and public. Of estimated total global public investment in transport, The Trillion Dollar Question found that some 98% or so came from domestic sources, with only about 2% coming from international public funds.
A large part of that 2% is provided through bilateral and multilateral Official Development Assistance (ODA). The report states, “ODA investment in transport is distributed largely through concessional loans and reached about US$14 billion in 2010. ODA flows in transport are generally directed towards roads and highways.
“In 2010, these two subsectors comprised 70% of transport investments at the World Bank and 78% at the Asian Development Bank.”
As for transport initiatives with a lighter carbon footprint, a tiny 10% of the 2% made available through international public investment comes from environmental funds such as the Global Environment Facility and the Clean Technology Fund. Contributions come from developed countries for the exclusive purpose of climate change adaptation and mitigation, and are largely intended to leverage additional investment.
In its conclusions, the WRI’s report states, “The call to increase private participation in transport reflects a general need to bridge a funding gap to support a shift toward low-carbon transport.”
Time for a rethink
Adding to the call for just such a change in focus is the Sustainable Cities Collective – an editorially independent, moderated community for leaders of major metropolitan areas, urban planning and sustainability professionals. In response to the Trillion Dollar Question analysis, it reported that, “…if present infrastructure and economic growth rates continue, China alone will boast more cars in 2050 than there are in the entire world today.
“This car explosion would generate more air pollution, fuel climate change, and pose safety concerns for both drivers and pedestrians. To reverse this car-centric trend, we need to change the kinds of transport assets we finance. The first step toward influencing global transport development is to follow the money and identify how to get finance flowing in the right directions.”
The Sustainable Cities Collective welcomed the efforts made by the WRI to create a springboard for future change, but said, “While identifying the amount invested in transport overall is an important starting point, quantifying the volume of investment in sustainable transport – such as public transit, bicycle lanes, and pedestrian walkways – is a crucial next step.” Something with which the WRI itself agrees.
Going for gold with a winning formula
As further analysis becomes available over the coming years, it should make interesting and important reading. In the meantime, we already know that sound investment in sustainable transport isn’t just capable of easing strains on the planet. It has been demonstrated time and time again how intelligently thought-through mass public transit systems can bring huge economic and social benefits with them.
On a topical note, over in Sochi, Russia’s President, Vladimir Putin, is hoping that the massive infrastructure investment he has put in place in and around the Black Sea resort for the 2014 Winter Olympics will help transform the region. So far little developed and barely known outside Russia as a winter sports destination, the aim is to transform the area into an international hot-spot post-Games.
To help facilitate this, the state-owned Russian Railways has created a 30-mile stretch of combined rail and road linking Adler and the Alpica-Service resort from which the other Olympic facilities can be reached. Another new railway line will connect the centre of Sochi and the local airport in an estimated journey time of about one hour.
Off the slopes and back over the English Channel, the UK’s new £14.8 billion high capacity Crossrail scheme for London and its environs is another prime case study of how good planning and investment can be a catalyst for positive development.
Crossrail has just been granted planning permission for a major over-site development at Paddington Station totalling 320,000 sq ft of office and retail space. In total, it has plans in place to develop over 3 million square feet (gross) of mixed-use space above its stations and construction sites, demonstrating that infrastructure is facilitating development.
Currently working on the project are 10,000 people, including over 280 apprentices. It is estimated that Crossrail will generate at least 75,000 business opportunities, support the equivalent of 55,000 full time jobs around the UK, and allow millions of travellers a year to leave the car at home.