Rail is among the most energy efficient modes of transport for freight and passengers, yet is often neglected in public debate, according to a new report by the International Energy Agency prepared in cooperation with the International Union of Railways (UIC).
The Future of Rail is the latest in the IEA series shining a light on “blind spots” in the energy system, which are issues that deserve more attention from policymakers. It was released today in New Delhi by IEA Executive Director, Dr Fatih Birol, at an event opened by India’s Minister of Railways, Shri Piyush Goyal.
The transport sector is responsible for almost one-third of final energy demand, nearly two-thirds of oil demand and nearly one-quarter of global carbon dioxide (CO2) emissions from fuel combustion. Therefore changes in transportation are fundamental to achieving energy transitions globally. While the rail sector carries 8% of the world’s passengers and 7% of global freight transport, it represents only 2% of total transport energy demand, highlighting its efficiency.
“The rail sector can provide substantial benefits for the energy sector as well as for the environment,” said Dr Fatih Birol. “By diversifying energy sources and providing more efficient mobility, rail can lower transport energy use and reduce carbon dioxide and local pollutant emissions.”
The Future of Rail includes a Base Scenario that projects the evolution of the railways sector to 2050 on the basis of announced policies, regulations and projects. It also includes a High Rail Scenario to demonstrate the energy and environmental benefits of a more significant shift of passengers and goods to rail transport. While the High Rail Scenario requires about 60% more investment than in the Base Scenario, global CO2 emissions from transport peak in the late 2030s, air pollution is reduced and oil demand is lowered.
The report includes a specific focus on India. “Rail serves as a vital lifeline of India, playing a unique social and economic role,” said Dr Birol. Rail remains the primary transport mode in the country, providing vital connections within and between cities and regions, and guaranteeing affordable passenger mobility that has long been a government priority. Rail passenger traffic in India has increased by almost 200% since 2000 yet prospects for future growth remain bright. Construction has started on India’s first high-speed rail line, the total length of metro lines is set to more than triple in the next few years, and two dedicated freight corridors are on track to enter operation by 2020.
In all countries, including India, the future of the rail sector will be determined by how it responds to both rising transport demand and rising pressure from competing transport modes.Rising incomes and populations in developing and emerging economies, where cities are growing exponentially, are set to lead to strong demand for more efficient, faster and cleaner transportation, but the need for speed and flexibility tend to favour car ownership and air travel. Rising incomes also drive demand growth in freight, where higher incomes, have sharply increased demand for rapid delivery of higher value and lighter goods.
Green Infrastructure Development Key to Boost Recovery Along the BRI
The Belt and Road Initiative (BRI) presents a significant opportunity to build out low-carbon infrastructure in emerging and developing economies throughout the world. A new insight report from the World Economic Forum, “Advancing the Green Development of the Belt and Road Initiative: Harnessing Finance and Technology to Scale Up Low-Carbon Infrastructure,” illustrates the green potential of this new development paradigm. It also highlights the ‘Vision 2023’ action plan of the Green Investment Principles of the Belt and Road, jointly developed within the World Economic Forum’s Climate Action Platform.
Emerging and developing economies face rising demand for energy and mobility as they grow, industrialise and urbanise. Today’s infrastructure investment decisions will lock in emissions trajectories for decades and could make or break the world’s ability to achieve the Paris Agreement objective of limiting global temperature rise to well below 2°C.
“The Belt and Road Initiative offers a new development paradigm through investment in green infrastructure that avoids the irreversible carbon lock-in effect on global climate change,” said Antonia Gawel, Head of the Climate Action Platform, World Economic Forum. “Collaborative action from public and private stakeholders will be needed to facilitate bankable green infrastructure projects, supported by international standards and forward-looking climate policies. The private sector is especially important for infrastructure construction, bridging the investment gap and scaling up promising green technologies.”
“By accelerating the buildout of low-carbon infrastructure, the Belt and Road Initiative can play a leading role in decoupling economic development from emissions growth for emerging and developing economies,” said Raymund Chao, Asia Pacific Chairman, China Chairman and Chief Executive Officer, PwC. “To capitalise on the increasing global appetite for green assets, the financial sector will play a vital role in channelling investment flows towards green energy and transportation projects.”
The Green Investment Principles (GIP) for the Belt and Road was launched in 2018 to accelerate green BRI investments. Membership has recently expanded to 41 signatories and 12 supporters from 15 countries and regions, holding or managing combined assets in excess of $49 trillion and providing significant funding to BRI projects.
“This insight report uses a number of vivid cases on low-carbon technologies, financial instruments, and policy measures to showcase how the effective combination of such approaches can facilitate the green development of the Belt and Road Initiative. Multilateral cooperation platforms such as Belt and Road Initiative International Green Development Coalition (BRIGC) and the Green Investment Principles for the Belt and Road play an important role in sharing best practices and fostering international cooperation on green development with countries that benefit from the Belt and Road Initiative,” Li Yonghong, Deputy Director General of the Foreign Environmental Cooperation Center, Ministry of Ecology and Environment, People’s Republic of China.
“This insight report offers an important contribution to low-carbon development in diverse countries along the Belt and Road. It signals that financial institutions and enterprises are taking action now to incorporate environment and climate risks into their investment portfolios to avoid transition risks and improve outcomes for sustainable economies and societies. “said Rebecca Ivey, Chief Representative Officer, Greater China, World Economic Forum
“Since the launch of the GIP, our member institutions have invested extensively in green projects in emerging market economies. However, greater efforts are needed to help these economies achieve their climate goals. This report provides a fresh perspective of how green and sustainable finance can facilitate the wide application of low-carbon technologies in emerging markets and developing economies. The GIP will continue to expand its reach and actively support the climate transition activities of the EMDEs,” said Dr. Ma Jun, Chairman of Green Finance Committee of the China Society for Finance and Banking.
The report uses case studies to highlight the financial sector players, financial instruments, low-carbon technologies and conducive local policies and can and need to come together in advancing the green development of the Belt and Road Initiative.
- JinkoSolar expands its South-East Asia solar photovoltaic module supply chain
- Silk Road Fund invests in renewable power assets across Africa and the Middle East
- Huaneng finances and builds Europe’s largest battery storage project
- Santiago’s innovative PPP financing structure to electrify its bus fleet
- Kazakhstan advances its transition from fossil fuels to green energy
- Asian Infrastructure Investment Bank (AIIB) helps investors manage climate and other ESG risks
Above all, this report sets the premise for a global infrastructure development strategy and calls for further action to protect our planet and build a sustainable tomorrow.”
COVID-19 pandemic stalls global economic recovery
The UN’s key report on the global economy, released on Thursday, shows that the rapid spread of the Omicron COVID-19 variant has put the brakes on a rapid recovery, counteracting signs of solid growth at the end of last year.
The 2022 World Economic Situation and Prospects (WESP) report, produced by the UN Department of Economic and Social Affairs (DESA), cites a cocktail of problems that are slowing down the economy, namely new waves of COVID-19 infections, persistent labour market and lingering supply-chain challenges, and rising inflationary pressures.
The slowdown is expected to carry on into next year. After an encouraging expansion of 5.5 per cent in 2021 — driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels — global output is projected to grow by only 4.0 per cent in 2022 and 3.5 per cent in 2023.
‘Close the inequality gap’
Commenting on the launch of the report, António Guterres, the UN Secretary-General, declared that, with WESP calling for better targeted and coordinated policy and financial measures, it is time to close the inequality gaps within and among countries. “If we work in solidarity – as one human family – we can make 2022 a true year of recovery for people and economies alike”, he said.
Liu Zhenmin, Under-Secretary-General of the United Nations Department of Economic and Social Affairs, drew attention to the importance of a coordinated, sustained global approach to containing COVID-19 that includes universal access to vaccines, and warned that, without it, “the pandemic will continue to pose the greatest risk to an inclusive and sustainable recovery of the world economy”.
The report predicts that developing countries will take a greater long-term hit that wealthier nations. Africa and Latin America and the Caribbean are projected to see significantly lower growth, compared to pre-pandemic projections, leading to more poverty and less progress on sustainable development and climate action.
The number of people living in extreme poverty is projected to remain well-above pre-pandemic levels, with poverty projected to increase further in the most vulnerable economies: in Africa, the absolute number of people living in poverty is projected to rise through 2023. In contrast, the economies of richer countries are expected to almost fully recover by next year.
The special financial measures put in place by many governments since the pandemic – such as bailouts, improved social protection and job support – should, says the report, stay in place to ensure a strong recovery.
However, in light of rising inflation, several central banks have begun to unwind their extraordinary monetary response to the crisis.
Many low-income developing countries, are facing unsustainable external debt burdens, amid sharp interest rate rises.
Additional borrowing during the pandemic and increasing debt-servicing costs, have put many of them on the verge of a debt crisis. These countries are in urgent need of further and coordinated international support for debt relief, the report notes.
Jobs, slow to re-appear
Employment levels are projected to remain well-below pre-pandemic levels during the next two years, and possibly beyond. Labour force participation in the United States and Europe remain at historically low levels, as many who lost jobs or left the labour market during the pandemic, have not yet returned.
These shortages in developed economies are adding to other pressures, such as inflation, and supply-chain challenges.
At the same time, employment growth in developing countries remains weak, amid lower vaccination progress and limited stimulus spending. Africa, Latin America and the Caribbean, and Western Asia, are projected to see a slow recovery of jobs. In many countries, the pace of job creation is not enough to offset the earlier employment losses.
The WESP was released two days after the latest World Bank’s Global Economic Prospects report, which drew similar conclusions, predicting that, given the rapid spread of the Omicron variant, the COVID-19 pandemic will continue to disrupt economic activity in the near term.
Moroccan Economic Growth Could Accelerate with the Full Implementation of Reforms
In order to achieve broad-based growth and job creation, the sustained implementation of a multifaceted and ambitious reform agenda will be essential, according to the World Bank’s Morocco Economic Monitor, January 2022: From Recovery to Acceleration.
The report analyzes the growth performance of the Moroccan economy over past decades. Thus far, fixed capital accumulation has been the main driver of growth, with limited productivity gains and an insufficient contribution of labor despite a favorable demographic situation.
The report presents simulations on the impact of various policy options on economic growth in Morocco. According to these simulations, the sustained implementation of a broad-based reform agenda, which raises human capital, economic participation and the productivity of firms, will be crucial to meet the ambitious growth objectives set by the New Development Model. Such an agenda will foster the unlocking of Morocco´s productivity potential, enable the youth and women to access the labor market and improve the educational profile of workers.
“Going forward, the Moroccan economy will need to diversify its sources of growth to continue creating jobs and reducing poverty,” said Jesko Hentschel, World Bank Maghreb Country Director. “As envisaged by the New Development Model, this may require the implementation of broad-based reforms effort to stimulate private investment, boost innovation, include women in the labor force and increase human capital.”
The report also analyzes the performance of the Moroccan economy in 2021 which showed a projected growth rate of 5.3%. An unusually strong performance of Morocco’s agricultural sector, a temporary slowdown in the pandemic, the revival of external demand for industrial and agricultural exports, and supportive macroeconomic policies are the main drivers of a marked but uneven recovery from the COVID-19 crisis.
The ongoing recovery is beginning to revert the social impact of the pandemic. This year’s rebound in agricultural production led to a rapid fall in unemployment in rural areas, but in urban areas, labor market indicators only began to improve in the third quarter of 2021. After peaking at an estimated 6.4 percent in 2020, poverty rates may not return to 2019 levels until 2023 despite the effects of the government’s cash transfer programs initiated during lockdown.
A robust recovery in public revenues is enabling the government to reduce its budget deficit, and the authorities have relied mostly on domestic markets to cover their financing needs. However, rising energy prices and collapsing tourism revenues have exceeded the additional inflows generated by the strong performance of manufacturing exports and workers’ remittances, leading to an increase in the country’s current account deficit.
An expansionary monetary policy and liquidity support provided by the Central Bank have helped Morocco’s financial sector to weather the storm, but the rate of non-performing loans remains high and could still increase. The management of macro-financial vulnerabilities will be essential for a sustainable recovery, the report said.
Looking forward, and following bumper harvests in 2021, agricultural production is expected to taper off, contributing to a slowing of GDP growth to 3.2% in 2022, after which a gradual acceleration is expected.
Decade of Sahel conflict leaves 2.5 million people displaced
The UN Refugee Agency (UNHCR) called on Friday for concerted international action to end armed conflict in Africa’s central Sahel...
Omicron and Vaccine Nationalism: How Rich Countries Have Contributed to Pandemic’s Longevity
In a global pandemic, “Nobody is safe until everyone is safe”, – it is more of true with respect to...
Canada’s bold policies can underpin a successful energy transition
Canada has embarked on an ambitious transformation of its energy system, and clear policy signals will be important to expand...
SADC extends its joint military mission in Mozambique
The Southern African Development Community (SADC) has collectively decided to extend its force mission mandate in Mozambique for three months...
Green Infrastructure Development Key to Boost Recovery Along the BRI
The Belt and Road Initiative (BRI) presents a significant opportunity to build out low-carbon infrastructure in emerging and developing economies...
The Crypto Regulation: Obscure Classification Flusters Regulators as Crypto Expands into Derivatives Markets
Crypto regulation has long been a topic of debate in policymaking circles. As the white-hot market continues to soar in...
China-US and the Iran nuclear deal
Iranian Foreign Minister Hossein Amir Abdollahian met with Chinese Foreign Minister, Wang Yi on Friday, January 14, 2022 in the...
Tech News4 days ago
C-Suite Toolkit Helps Executives Navigate the Artificial Intelligence Landscape
South Asia4 days ago
Major Challenges for Pakistan in 2022
Middle East3 days ago
Kurdish Education in Turkey: A Joint Responsibility
Finance3 days ago
Why cash is a critical resource with no substitute in cashless societies
Crypto Insights3 days ago
Investing in the Crypto Sphere: A Guide for Beginners in 2022
Central Asia4 days ago
A Reflection on President Xi’s message to Kazakh President Tokayev
East Asia3 days ago
Japan’s Rohingya Policy: Deviation From Long-held Distinction
Russia3 days ago
Russia’s Potential Invasion of Ukraine: Bringing In Past Evidence