Belt and Road Initiative & Sustainable Transport

Belt and Road Initiative & Sustainable Transport

Christoph Nedopil WangMarch 2020

The content of this publication is the sole responsibility of the EC-Link Project team and can in no way be taken to reflect the views of the European Union.

Author:

ChristophNedopilWang,DirectorofGreenBeltandRoadInitiativeCenter

InternationalInstituteofGreenFinance/CentralUniversityofFinanceandEconomics:

Address:ShoutiSouthRoad9,InterwestBusinessBuilding7,Room1201HaidianDistrict,Beijing.

Website:http://www.eclink.org/

EC-LinkWechat EC-LinkPlatform

Email:[email protected]:www.green-bri.org

Preface

Announcedin2013,theBeltandRoadInitiativeaimstostrengthenChina’sconnectivitywiththeworld.Itcombinesnewandoldprojects,coversanexpansivegeographicscope,andincludeseffortstostrengthenhardinfrastructure,softinfrastructure,andculturalties.InFebruary2020,thePlantouched138countrieswithacombinedGrossDomesticProductofalmost$30trillionandaround4.5billionpeople.

SupportingadiversearrayofinitiativesthatenhanceconnectivitythroughoutEurasiaandbeyondcouldservetostrengthenChina’seconomicandsecurityinterestswhilebolsteringoverseasdevelopment.AtthefirstBeltandRoadForuminBeijinginMay2017,PresidentXiJinpingnotedthat,“InpursuingtheBeltandRoadInitiative,weshouldfocusonthefundamentalissueofdevelopment,releasethegrowthpotentialofvariouscountriesandachieveeconomicintegrationandinterconnecteddevelopmentanddeliverbenefitstoall.”*

TheessenceofagreenandsustainableBeltandRoadistointegrategreendevelopment,ecologicalandenvironmentalprotectionintoeveryaspectofthedevelopmentoftheBeltandRoadwiththeprincipleofenergyconservationandenvironmentalprotectionundertheguidanceofgreendevelopmentconceptsandofsustainabledevelopmentgoalssettledbyUnitedNations.

ThecommitmenttomonitorandimplementBRIinitiatives,bothbyChinaandbypartnercountries,isakeyprerequisitetoreducingtheenvironmentimpactsofBRIprojects.SettingtargetsthataimtoachieveanambitiousproportionofprojectsthatcombatclimatechangewouldhelporientBRIfundingtowardgreatersustainability.

Atfirstsight,China’sandtheEU’sdifferentapproachesseemtoleadtocompetition.Yet,China’sBRIandtheEU’snewconnectivitystrategyalsoentailcomplementaryaspectsthatmightencouragegreatercooperation.Withinthecurrentrisingtrendofprotectionismandtheraisingofindividualism,ChinaandtheEUprovidesalinkbetweentheworld�ssecondandthirdlargesteconomies,aswellaswiththewiderareaofEastAsia,indeedthemostdynamicregionintheworld.ChinaandtheEUcanalsousetheBRIas

aplatformtocontributetosolvingpresentregionalissuesandsecuritychallenges,thusfillingthegapofleadershipandofferingsolutionsinglobalgovernance.

Towardthisend,theEUhasdevelopeditsownstrategyforconnectivityinAsiatopromotethesustainableurbanization,constructionoftransport,digital,andenergyinfrastructurebetweenEuropeandAsia.ThestrategyaimstoprovideaframeworkofEuropeanstandardsforconnectivityprojectsandseekstoprovidehigh-qualityalternatives.TheEUisseekingtoprovidecrediblealternatives;giventhegrowingpushbackagainsttheBRIinsomerecipientcountries,theEUcertainlyhasanopportunitytopresentitselfasamoreattractivepartnerbyofferingconnectivityprojectsbasedonsustainablefinancing,avoidingdebttraps,andtakingintoaccountenvironmentalimpact.

EC-LinkProjecthasbeendevelopingaseriesofresearchpapersmeanttotriggerChineseandEUexperts’cooperationtodrivetheplanningofresilientcitiesandmoresustainableprojectsamongBRI:

• BeltandRoadInitiative&SustainableUrbanization• BeltandRoad&InitiativeSustainableTransport• BeltandRoadInitiative&Industry4.0• BeltandRoadInitiative&GreenFinance

Suchtopics,wherechosenbyEC-LinkTeambecauseseenasmostlyrelevantandpertinentinviewofthefuturedevelopmentoftheBeltandRoadInitiative;takingintoaccountseverallevelsonanalysis:national,regionalandinternational,wetrytoofferrecommendationsfortheimprovementofon-goingdynamicsinviewofabetterandmoresustainablerelationsinEurasiamarket.Witheachresearchpaper,EC-LinkProjectwantstocontributenotonlyinprovidingadditionalusefulinformationforabetterunderstandingofBRIbutalsotosupportanopendialogueonsuchrelevantsubjectprovidingafruitfulbaselineforfurtherdiscussion.

* English Translation of http://cpc.people.com.cn/n1/2019/0320/c64094-30984416.html

1. Executive Summary 1

2. Introduction 2

3. Background: Green Urban Transport and the Belt and Road Initiative (BRI) 33.1. Understandinggreenurbantransportanditschallenges 33.2. InvestmenttrendsfortransportintheBeltandRoadInitiative 53.3. CitiesandurbantransportdevelopmentintheBeltandRoadInitiative 63.4. IPoliciesandregulationsaffectingurbantransportinBRIcities 83.5. KeycommercialstakeholdersforurbantransportintheBRI 103.6 SummaryofBackgroundandChallenges 14

4. The next phase of Green Urban Transport in China and BRI countries – green urban mobility innovation 154.1. Connectedmobility 154.2. Autonomousmobility 164.3. Sharedmobility 174.4. Electricmobility 184.5. Summary-thefutureofurbanmobilityfromChinaandEuropetotheBRI 22

5. Scenarios of urban transport development in the BRI in the year 2033 245.1. Scenario1:EcologicalUrbanCivilization 245.2. Scenario2:DevelopmentatDifferentSpeeds 305.3 Scenario3:Globalslowdown 335.4 Summaryandanalysisofscenarios 36

6. Policy recommendations for China and Europe 396.1 Politicalandcapacitybuildingcooperation 396.2 Standardsandtechnicalcooperation 406.3. Financialcooperation 41

7. Summary and Outlook 42

8. Bibliography 43

Table of Contents

Terms and Abbreviations

ADB AsianDevelopmentBank

AIIB AsianInfrastructureandInvestmentBank

BRF BeltandRoadForum

BRI BeltandRoadInitiative

BRT Busrapidtransportsystem

CDB ChinaDevelopmentBank

CRCC ChinaRailwayConstructionCompany

CREC ChinaRailwayGroupLtd.

CRRC Chinesepubliclytradedrollingstockmanufacturer

EBRD EuropeanBankforReconstructionandDevelopment

EIB EuropeanInvestmentBank

EPC Engineering,ProcurementandConstruction

EU EuropeanUnion

EV Electricvehicleil

GDP Grossdomesticproduct

GHG emissions Greenhousegasemissions

GIP GreenInvestmentPrinciples

GIZ GesellschaftfuerInternationaleZusammenarbeitgizGmbH

ICBC IndustrialandCommercialBankofChina

ICV Internalcombustionengine

KfW Germanstate-ownedbankengagedininternationaldevelopmentfinancialassistanceandinvestment

MEE ChineseMinistryofEcologyandEnvironment

MIIT ChineseMinistryofIndustryandInformationTechnology

MoHURD ChineseMinistryofHousingandUrban-RuralDevelopment

MoT ChineseMinistryofTransport

NDRC ChineseNationalDevelopmentandReformCommission(inchargeofeconomicplanninginChina)

NEV Newenergyvehicle

SDG SustainableDevelopmentGoal

UN UnitedNations

VPN VirtualPrivateNetwork

WRI WorldResourcesInstitute

1

1 Executive Summary

TheChinesedrivenBeltandRoadInitiative(BRI)hasthepotentialtostronglyaltertransportationincitiesalongtheBRIcorridors.ByinvestingbillionsofdollarsinBRIcountriesChinahopestoacceleratephysicalanddigitalconnectivitybetweenChinaandtheBRIcountriesforimprovedeconomicactivity.Asaconsequence,manyBRIcities,asthenexusofeconomicactivity,willexperiencenewdevelopmentsinurbantransportation,causedbymoredemandforurbantransportationandmoreinvestmentinurbantransportation.

Withemissionsfromtransportationcontributingtoupto40%oftotalemissionsin2018,BRI-relatedinvestments,however,risktofurtherincreasebothfreightandpassengertransportrelatedemissions.ToavoidthisdevelopmentpathandachievetheParisClimateAccord,strategicandtacticalcooperationondevelopinggreenurbantransportsystemsinBRIcitiesisparamount.

EuropeanandChinesecooperationplaysaparticularlysignificantroleinthisregard:firstly,BRIcitieslieattheheartofbothChineseandEuropeaninterestsasmostBRIcorridorsconnectAsiaandEurope.Secondly,transporttechnologiesandtransport-relatedindustriesarehighlyrelevantforChineseandEuropeaneconomies.Astransporttechnologiesarecurrentlyundergoingatremendouschange,e.g.throughelectrification,automation,digitalization,andnewformsofsharing(enabledbydigitalization),cooperationonresearch,standardsandfairmarketaccessbetweenEuropeanandChinesestakeholdersiscrucial.Thirdly,fightingclimatechangethroughimprovedandgreenertransportisinthecoreinterestoftheEuropeanandChinesestakeholders.AchievingthetransitiontoagreentransportsysteminBRIcitiesrequiresmassiveinvestmentof0,4%to0,6%oftheinvolvednation’sGDPinbothhardinfrastructureandcapacitybuilding.Efficientinvestmentandcapacitybuildingcanonlybeachievedincoordinationwiththeinvolvedpartners.

ToachieveagreenurbantransportdevelopmentinBRIcities,EuropeanandChinesestakeholdersatdifferentlevelsshouldstrengthentheircooperationandmutuallearninginthreeareas:

1. politicalcapacitybuilding,particularlyintermsof

sustainableurbantransportplanning,enforcementofrules,incentivecreation

2. technicalcooperation,particularlyintermsofstandardsettingtoavoidabi-furcationoftransportstandardsthatmakeinterconnectivitycostlyandthuslesssustainable

3. financialcooperation,particularlyintermsofcoordinatinginvestmentstoachievebetterandcomprehensiveresults

Thechallengeinrealizingtheserelativelyobviouscooperationpathwaysarethecomplexdynamicsinthedevelopmentofurbantransport.

Forone,Chinaisarelativenewcomerontheinternationaldevelopmentandcooperationspaceandhaswidenedanddeepeneditsinternationalfootprintquickly.Sinceitsinceptiononlyin2013,theBRIhasnotonlyseeneffectiveandless-effectiveactivism,butalsosignificantChinesetransport-relatedinvestmentof164billionUSD.ThismakesChinaaneverincreasinglyimportantpartnerformanyBRIcountriesandcities,whiletraditionaldevelopmentpartners,suchasEuropeanstakeholders,needtoadapttoanewandpossiblydiminishedrole.

Secondly,transporttechnologiesaredevelopingrapidlyandhavethepotentialtochangemobilitybehaviorsasfastasduringtheintroductionofmotorizedtransportationatthebeginningofthe20thcentury.Theconsequencesonpeople,freightandtransportplanningofautomation,sharedmobilityandthedigitalrevolutionarenotyetunderstood,whilethespeedofdevelopmentisequallyoverstatedandunderestimated.

Thirdly,globalpoliticalandeconomicdevelopmentsareallbutpredictable.Witholdformsofglobalgovernancepossiblydiminishinginimportance,whilenewformsofgovernancearewelcomedbyChinaandothercountries,uncertaintyoflong-termprospectsisincreasing.

Withinthisdynamicsetting,decision-makersaimingtosupportgreenurbantransportdevelopmentneedtounderstandpossiblescenariosofdevelopmentto

BELT AND ROAD INITIATIVE & SUSTAINABLE TRANSPORT

2 3

2 Introduction 3 Background: Green Urban Transport and the Belt and Road Initiative (BRI)

prepareandadoptpolicymaking.Thispaperdevelopedthreescenariosthatextrapolatepossibledevelopmentswithoutgivingpredictions:

1. EcologicalUrbanCivilization‒whereinternationalcooperation,technologicaldevelopmentandthegoaltocreateagreenenvironmentarealignedtocreateBRIcitiesthatarefocusingpassengermobilityonpublictransportandfreighttransportonelectric,sharedandautonomousmobility

2. DevelopmentatDifferentSpeeds‒whereBRIcitiescanchoosetheirowndevelopmentpathaccordingtotheirpreferences.Thisallowsalltypesofbrownandgreentechnologiestothrive,whilecoordinationonfinance,capacitybuildingandtechnologyhappensinselecteddomainsonly.

3. Globalslowdown‒whereinvestmentsonlyhappeninstrategicallyimportantBRIcitieswithnationalinterestsofbothhostandinvestorcountriesinmind.

Theemissionmitigationpotentialsforurbantransportinallthreescenariosvarysignificantly:theEcologicalCivilizationscenariohasthepotentialtoreduce25%moreemissionsthantheDevelopmentatDifferentSpeedsscenario,whileatthesametimeinvestmentsinthefirstscenarioareabout25%lowercomparedtotheDevelopmentatDifferentSpeeds.

TheBeltandRoadInitiativeaimstoincreaseeconomicactivitybyimprovingconnectivityofeconomicareasthroughinfrastructureinvestment.Asaconsequence,citiesalongtheBRI,bothwithinChinaandoutsideChinaareevolvingandevennewcities,suchasKhorgosinKazakhstan1,aredevelopingasnewcentersfortrade.Withinthecities,urbanmobilitywilldevelopaccordinglye.g.withhighereconomicactivity,moredisposableincomes,growingpopulations.Withtherightchoices,thistransformationofurbanmobilityinBRIcitiescanmakecitiesgreenerandmorelivable.

Thiswhitepaperprovidesscenario-basedoutlooksofurbanmobilitydevelopmentalongtheBRIforpolicymakersandinvestors.TheoutlookisgroundedonananalysisofthecurrenturbantransportlandscapeinChina‒asthedominantdriveroftheBRI-includingitspolicies,stakeholdersandchallengesinurbantransport,illustratetrendsofurbantransportandBRIdevelopments.

AtthispointitisalsoimportanttonotethattheBRIisaChineseledinitiative.Therefore,whileinternationalcooperationinBRIissoughtbymanycountriesincludingChina,themainpurposeofthispaperistotrytoprovideabetterunderstandingofChinesedrivendevelopmentsinurbantransportinBRIcountries.

1 Ben Mauk, “Can China Turn the Middle of Nowhere Into the Center of the World Economy?,” The New York Times, January 29, 2019, sec. Magazine, https://www.nytimes.com/interactive/2019/01/29/maga-zine/china-globalization-kazakhstan.html, https://www.nytimes.com/interactive/2019/01/29/magazine/china-globalization-kazakhstan.html.

WithitsBeltandRoadInitiative(BRI),ChinahasalreadyandcontinuestoinvestbillionsofdollarsinbuildingtransportinfrastructureinChinaandabroad.CitiesalongtheBRI,asthenodesofeconomicactivity,areexpectedtobenefitfromtheseinvestments.Inregardstotransport,citiesshouldbeaskingseveralquestions,amongthem:

- howcanurbantransportbenefitfromtheBRIinvestmentsintheshort-andlongertermineconomicterms?

- Howcansustainabletransportbeemphasized?

Inanidealworld,therewouldbeonlyoneanswertobothquestions:sustainabletransportinvestments.However,thepictureismorecomplexwithdifferentpolitical,businessandstakeholderinterestsinvolved,whiletechnology,particularlyinthemobilitysector,isdevelopingrapidlyofferingnewopportunitiesforsustainablemobility.

3.1 Understanding green urban transport and its challenges

Urbantransportisanessentialservicetoprovidemobilitywithinthecityforbothpeopleandfreight.Urbantransportispoisedtoincrease,particularlyinemergingeconomies,dueto

- increaseinurbanpopulationby2.5billionpeo-pleuntil2050,particularlyinAsiaandAfrica2,

- increaseinspendingpowerduetoeconomicgrowth,leadingtohigherneedsforindividualmobilityandmoreconsumption,

- higherphysicalconnectivityofcities(e.g.throughinter-cityroads,railandair-traffic),allowingformoremobility.

2　 Department of Economic and Social Affairs United Nations, “68% of the World Population Projected to Live in Urban Areas by 2050, Says UN,” UN DESA | United Nations Department of Economic and Social Affairs, May 16, 2018, https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html.

Overthepastyears,Chinesecitieshavealreadyexperiencedthisaccelerationofurbanmobility.Withagrowthofannuallyvehicleregistrationfrom3.37millionin2001to28millionin2017,China’sprivatelyheldvehiclestockincreasedfrom10millionin2001to185millionin2017.Withincreasede-commerce,urbanshipmentshaveincreasedby35%peryearfrom9billionin2013to40.2billionin20173.

Asaconsequenceofthefastgrowthintransport,thetransportsectorhasbecomethe“fastestgrowingcontributortoclimateemissions”,whileparticularlyurbantransportisamajorcontributor,as“urbantransportaccountsforabout40%ofend-useenergyconsumption”4.Besidescarbondioxideemissions,urbantransportisresponsibleforblackcarbonemissions,whichcontributesbothtoclimatechangeandairpollution.Urbantransportalsorequiresspaceforlinearinfrastructure,suchasforroads,parking,andsupportingservices.

Inordertomovetogreenurbanmobility,citiesshouldconsiderpoliciesthatacceleratetransportmeansforpeopleandfreightinalow-carbon(SDG13),low-emission(air-pollution)(SDG3)andefficientwaythatprotectsgreenpublicspaces(SDG11).Socialaspectsoftransport,suchasaffordability,safety,equalityandaccessibilityareequallyimportanttoprovideforsustainabletransport.Thefocusofthispaperwill,however,begreentransport.

Inordertomovefromthecurrenttransportmodalitytosustainablemobility,threeconceptsshouldbeconsidered:

- avoidtrafficandthuspollution,

- shifttraffictomoreefficientandlesspollutingmeansoftransportation,

- improveexistingmeansoftransportation.

3 www.xinhuanet.com/politics/2018-01/08_c_1122228648.htm4　 “WHO | Climate Impacts,” WHO, accessed June 5, 2019, http://www.

who.int/sustainable-development/transport/health-risks/climate-im-pacts/en/.


4 5

TheSustainableUrbanTransportProject(SUTP)ofGIZhasdeveloped10principlestoaddressthesustainableurbantransportchallenge(seeFigure1):

1. Planningdenseandhumanscalecities2. Optimizingroadnetworkanditsuse3. Developingtransit-orientedcities4. Encouragingwalkingandcycling5. Implementingtransitimprovements6. Controllingvehicleuse7. Managingparking8. Promotingcleanvehicles9. Communicatingsolutions10. Approachingthechallengescomprehensively

Additionalaspectsforsustainableurbantransportinclude

- Employingnewtechnologiesintrafficplanning,e.g.throughtheapplicationofbigdata,sharedvehicleuse

- Optimizingtrafficmanagement,e.g.throughar-tificialintelligencethatallowsformoreefficientuseofroads

Withmoreeconomicactivityexpected,particularlyincitiesprofitingfromtheBRI,findingsustainablesolutionsandinvestingintherightgreentechnologies,mitigationandadaptationmeasurestominimizeenvironmentalimpactsofurbantransportisparamount.

Figure 1: 10PrinciplesofSustainableUrbanTransport5

5　 SUTP, “10 Principles of Sustainable Urban Transport” (Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH, 2017), https://www.sutp.org/files/contents/documents/resources/J_Oth-ers/10_principles_english.pdf.

3.2 Investment trends for transport in the Belt and Road Initiative

SincetheannouncementoftheBRIin2013,morethan170countriesandorganizationshavesignedinstrumentsofcooperationwithChinatopromotetheBeltandRoadinitiative.6

Withthegoaltoimproveconnectivityandremove“bottlenecksofeconomicgrowth”throughinvestments,the“totalvalueofprojectsinthe[BRI]schemestandsat$3.67trillion,spanningcountriesinAsia,Europe,Africa,OceaniaandSouthAmerica”7.

6　 Wenqian Zhu, “China Has Signed 171 B&R Cooperation Docu-ments-Belt and Road Portal,” Belt and Road Portal, March 7, 2019, https://eng.yidaiyilu.gov.cn/qwyw/rdxw/81686.htm.

7　 Brenda Goh and Cate Cadell, “China’s Xi Says Belt and Road Must Be Green, Sustainable,” Reuters, April 25, 2019, sec. Sustainable Busi-ness, https://www.reuters.com/article/us-china-silkroad/chinas-xi-says-belt-and-road-must-be-green-sustainable-idUSKCN1S104I.

WiththegoaltoincreaseconnectivitythroughtheBRI,investmentsintransportplayaparticularlyimportantrole.Since2013,Chinaspent164billionUSDontransportrelatedinvestments,plusanother13billionUSDonlogisticsinBRIcountries(seeFigure2).

ParticularlyEastAsiaisarecipientofChineseinvestmentsintransport,followedbyWestAfrica,Sub-SaharanAfricaandtheMiddleEast.Lookingatthesectors,about42%ofChinesetransport-relatedinvestmentsinBRIcountriesaregoingintorail,35%inauto,18%inshippingandtherestinaviationandothers.

Figure 2:ChinesetransportinvestmentsinBRIcountries(sincejoiningBRI)8

8　 Scissors Derek, “China Global Investment Tracker 2018,” China Global Investment Tracker (Washington: American Enterprise Institute, January 2019), http://www.aei.org/china-global-investment-tracker/.


6 7

SomeconcreteprojectsincludetheconstructionofsubwaysinVietnam,RussiaandNigeria,aswellashighwaysinSriLanka,Pakistan,Georgia,Croatia,MontenegroandSerbia.

However,itisimportanttodistinguishChineseBRIinvestmentsbetweenconstructioninvestmentsandbusinessesgoingabroad.Currently,mostBRItransport-relatedinvestmentsareconstructionrelatedinvestments,whilefewChinesecompaniesinservicesandmovableequipmenthaveyetsuccessfullyexpandedabroad.Forexample,whiletheride-hailingcompanyUberisactiveinabout60countries,ChineseDidiisonlyactivein6countries.Manybike-sharingcompanies(suchasMobike)haveexpandedinitially,butduetofinancialdifficultiespulledoutofalmostallinternationalmarkets.Also,salesofChineseelectricvehiclesabroadarefew:ofthe450.000electricbusesinoperationattheendoftheyear,mostofthemwereproducedinChina,andindeed98%ofallavailableelectricbuseswereusedonChineseroads.9

3.3 Cities and urban transport development in the Belt and Road Initiative

CitiesthataremostlyaffectedbytheBRIcanbefoundalongthesixeconomiccorridorsoftheBRI(seeFigure3):theChina-Mongolia-RussiaEconomicCorridor,theNewEurasiaLandBridgeEconomicCorridor,theChina-CentralAsia-WestAsiaEconomicCorridor,theChina-PakistanEconomicCorridor,theBangladesh-China-India-MyanmarEconomicCorridorandtheChina-IndochinaEconomicCorridor.

9 Eric Ng, “BYD Makes Inroads in Africa with Order for 15 Electric Buses in Egypt,” South China Morning Post, January 25, 2018, https://www.scmp.com/business/companies/article/2130460/chinas-byd-wins-second-electric-bus-order-tough-crack-africa.

Bloomberg NEF, “Electric Vehicle Outlook 2019” (Bloomberg, 2019). Own research

Figure 3: EconomicCorridorsoftheBeltandRoadInitiative10

Alongthesecorridors,manycitiesarebeingconnectedandcanthusbeunderstoodasbeingaffectedbytheBRI.Intheirstudy,Derudderetal.analyzedthenetworkexternalitiesandconnectivityofcitieswithinthesecorridors(intermsofdegreecentrality,betweennesscentralityandclosenesscentrality).TheydiscoveredthatthefollowingcitiesareparticularlyintegratedintothecurrentBRI‒albeitwithindifferentcommunities(seeFigure4,Table1):

10　Ben Derudder, Xingjian Liu, and Charles Kunaka, “Connectivity Along Overland Corridors of the Belt and Road Initiative,” Discussion Paper, MTI Global Practice (Washington: World Bank, October 2018), http://documents.worldbank.org/curated/en/264651538637972468/pd-f/130490-MTI-Discussion-Paper-6-Final.pdf.

Figure 4:CitynetworksintheBRI11

Table 1:RelevantBRIcitiesalongdifferenteconomiccorridors12

11　 Derudder, Liu, and Kunaka.12　 Derudder, Liu, and Kunaka.

Continentalanalysis

China-Mongolia-Russia

EurasianLandBridge

China-CentralAsia-WesternAsia China-Indochina ChinaPakistan

Bangladesh-China-India-Myanmar

Beijing Beijing Shanghai Istanbul Guangzhou Xian Chengdu

Shanghai Shenyang Zhengzou Tehran Shenzhen Chengdu Nanning

Guangzhou Harbin Xian Ankara Shanghai Lanzhou Kunming

Nanjing Tianjin Nanjing Urumqi Nanning Urumqi Chongqing

Shenzhen Changchun Hefei Antalya Hangzhou Chongqing Guiyang

Hangzhou Dalian Wuhan Lanzhou Changsha Xining Liuzhou

Wuhan Shijiazhuang Xuzhou Izmir Xiamen Baoji Guilin

Zhengzhou Jinan Suzhou Yekaterinburg Nanchang Taiyuan Neijiang

Xi’an Tangshan Jinan Almaty Kunming Karachi Beihai

Chengdu Jinzhou Luoyang Zhangye Guilin Yinchuan Mianyang

HongKong Novosibirks Urumqi Xining HongKong Urumqi Kolkata

Singapore Yekaterinburg Almaty Adana Singapore Rawalpindi Dhaka

Dubai Hohhot Krasnodar Konya Hanoi Bahawalpur Yangon

Mumbai Tyumen Astana Bishkek Bangkok Hami Patna

Istanbul Baotou Yekaterinburg KualaLumpur Dhanbad

Delhi Qingdao Lanzhou Yangon Guiyang

Seoul Qujing

Jakarta Dazhou

Bangkok Suining


8 9

Accordingly,inregardstocitiesinChinaaffectedbytheBRI,onlysixofthe18ChineseprovincesthatareofficiallypartoftheBRIarerealgatewaystoBRIintermsofoverlandcorridorsplussevencentersthatcanprofit.TheyincludeBaotou(InnerMongolia),Zhengzhou(Henan),Xian(Shaanxi),Lanzhou(Gansu),Urumqi(XinjiangUyghur),Kunming(Yunnan),andQujing(Yunnan).Intermsofinternationalconnectivity,centersacrosstheprioritycorridorsarethefollowing:Novosibirsk,Irkutsk,Yekaterinburg,andKrasnodar(Russia),AlmatyandAstana(Kazakhstan),Tehran(Iran),Istanbul(Turkey),Kabul(Afghanistan),Yangon(Myanmar),KualaLumpur(Malaysia),Bangkok(Thailand),Hanoi(Vietnam),Singapore(Singapore),Rawalpindi,Bahawalpur,IslamabadandKarachi(Pakistan),Dhaka(Bangladesh),andKolkata(India).13

Twofactorswillplayarolehowthesecities’urbantransportwillbeimpactedbytheBRI:

1. Supplyoffunds,e.g.directimpactthroughinvestmentsinurbantransportinfrastructure(freightandpassenger)throughtheBRIinvestment,

2. Demandoftransport,e.g.throughincreasedpeopleandfreightflowwitheconomicconnectivityandactivitydependingonthelocationanddegreeofintegrationalongtheBRI.

Inaddition,localpoliticalandtechnicalfactors,suchasplanningandoperationalcapabilitieswillplayadecisiveroleofthecity’sspecificdevelopments.

3.4 Policies and regulations affecting urban transport in BRI cities

ThedevelopmentofurbantransportinChinaandtheBRIisguided,incentivizedandregulatedbyvariousministries.ForChineseBRIcities,Chinesepoliciesdeterminethedevelopment.ForcitiesinotherBRIcountries,similarlylocallawsandregulationswillplaythemostimportantrole.However,Chinesecompanies

13　 Derudder, Liu, and Kunaka.

andinvestorsinvestinginBRIurbanmobilitycanfollowseveralguidelinestoimprovesustainableinvestment.

Chinese Green Urban Transport Policies and Regulations

Chinahasacomplexsetofregulatorsthatgovernthedevelopmentofurbantransportonthenational,provincialandcitylevel.Themostrelevantare:

- NationalDevelopmentandReformCommission(NDRC)isresponsiblefortheoveralleconomicdevelopmentstrategyofChina;theprovincialDRCsaredetailingtheworkoftheNDRCatthelocallevel.

- MinistryofTransport(MoT)isresponsiblefortransportrelatedpolicies,particularlypublictransport,inter-cityroadtransport,vehiclestandards.Provincesandcitieshavetheirspe-cificministriestosupportthedevelopmentofurbantransport.

- MinistryofEcologyandEnvironment(MEE)isre-sponsibleforemissionstandardsandoversight.

- MinistryofHousingandUrban-RuralDevelop-ment(MoHurd)isresponsibleforguidingtheplanningandconstructionofruralandurbanareasinChina

- MinistryofIndustryandInformationTechnol-ogy(MIIT)isresponsibleforvehicletechnicalstandards(motor)

Theseministriesissueurbantransportpoliciesandguidelinesseparatelyandjointly,forexampleinregardstocomprehensiveplanningandelectrification:

Comprehensive planning policy

Asanexample,onMay20,2019theMoTtogetherwith12governmentministriesanddepartmentspublishedtheGreenTravelActionPlan(2019-22).In

regardstourbantransport,theplanemphasizestheneedtoimproveurbanpublictransportationsystems(includingconstructionofsubways,buslanes);theimprovementoftransithubsbetweenairportsandrail,urbanrail,rail-to-urban;theoptimizationofurbanroadnetworkstoincreaseroaddensity;theaccelerationofelectricvehiclesuse;theimprovementofpublictravelexperience(e.g.installairconditioning,cashlesspayment);theimprovementof“slowtrafficsystems”thatencouragesnon-motorizedtransport(bikingandwalking),theimprovementofparkingtrafficmanagement.14ThisActionPlanisbuilt,forexample,onthe2016GreenTransportStandardSystemDocumentissuedbytheMoT.15

Electrification of urban vehicles and infrastructure

TheMIITisparticularlyactiveinsettingtheguidelinesfortheaccelerateddiffusionofNewEnergyVehicles(NEVs).InApril2019,MIITissuedanewguidanceloweringaveragefuelconsumptionfrom8.2l/100kmto5.0l/100kmby2020.

Furthermore,Chinesenationalandprovincialandcitygovernmentsareallencouragedtosubsidizetheacquisitionofelectricvehiclesforpublictransport(e.g.buses),privatetransport(e.g.cars)andfreighttransport(e.g.lorries).From2017,theChinesegovernmentfor

14 Ministry of Transport of the People’s Republic of China, “交通运输部等十二部门和单位关于印发绿色出行行动计划（2019—2022 年）的通知 ,” Pub. L. No. 2019–01973 (2019), http://xxgk.mot.gov.cn/jigou/ysfws/201905/t20190531_3207748.html?from=groupmessage.

15 Ministry of Finance of People’s Republic of China, “关于 2016-2020年新能源汽车推广应用财政支持政策的通知 ,” Pub. L. No. 2015/134 (2015), http://jjs.mof.gov.cn/zhengwuxinxi/zhengcefagui/201504/t20150429_1224515.html.

exampleprovidesoperationsubsidiestothetransitoperatorsofelectricbuses,whilealsocuttingdieselfuelsubsidies.Thiswasanupdatedpolicyfromthe2016policythatsubsidizedtheacquisitionof10-12meterelectricbuseswithasubsidyof120,000RMBto500,000RMB(dependingontherangeandenergyconsumptionofthebus).

Intermsofexistingvehicles,inJanuary2019,theMEEwithotherMinistriesissuedtheregulationthatacceleratestheimplementationoftheCHINAVIemissionstandardinseveralpilotregions(e.g.Beijing,YangtzeRiverDelta,PearlRiverDelta)fromJuly2020onthenationalleveltostartfromJuly1,2019.

City networks and sustainability activities

Chinesecitiesarealsoengagedinvoluntarynationalandinternationalgovernancenetworkstoimprovethesustainabilityoftheirurbanmobilityactivities,suchas

- C40networkwith12Chinesecitiesinvolved

- AllianceofPioneeringPeakCities(APPC)with21Chinesecitiesinvolved

- TransitMetropolisplanswithabout100Chinesecitiesinvolved

C40networkwith12Chinesecities AllianceofPioneeringPeakCities(APPC)with21Chinesecities

TransitMetropoliswithabout100Chi-nesecities

Figure 5 : Chinesecityinitiativesforgreenurbantransport16

16 Source: own research


10 11

Specific BRI guidelines relevant for green urban transport

TheBRIhasseveralguidelinesthatsupportgreendevelopment.AsthereexistsnoministryorinternationalgovernancesystemthatwouldbeabletosetrulesandenforcethemalongtheBRI,theimplementationofandadherencetoguidelinesisvoluntary.Importantguidelinesthataffectsustainableurbanmobilityinclude:

- JointCommuniqueoftheSecondBeltandRoadForum(BRF),April2019.ThedocumentstressestheimportanceofgreendevelopmentandthenecessitytoprotecttheclimateandtheenvironmentandadheretotheParisAccord.

- GreenInvestmentPrinciples(GIP)forBeltandRoad,signedby26financialinstitutionsinvolvedintheBRI,April2019.ThePrinciplesemphasizetheneedoffinancialinstitutionstoevaluateandincorporateenvironmentalrisksintheirdecisionmakingandbetransparentaboutactivities

- GuidanceonPromotingGreenBeltandRoad,May2017.ThedocumentpublishedbytheMin-istryofEnvironmentalProtection(nowMEE)elaboratesontheneedtobuildanecologicalcivilizationthatincludesinternationalcooper-ation,efficientuseofresourcesandpromotionofgreentransport.

Onalegalandenforceablebasis,China’sBRIinvestmentsadheretothehost-countryprinciple.ThatmeansthatcurrentlyChineseinvestorsandEPCsareliableonlyforfollowinglocallawsandregulations,whileafailuretoadheretointernationalstandardsiswithoutconsequences.

ChinahasalsosetupvariousworkinggroupstosupportthegreenurbanizationalongtheBeltandRoadInitiativeduringthesecondBeltandRoadForuminApril2019.WithintheMinistryofEcologyandEnvironment(MEE),theBRIInternationalGreenDevelopmentCoalitionhassubgroupsonthe“ImprovementofEnvironmental

QualityandGreenCities”,“GreenFinanceandInvestment”and“SustainableTransport”.TheNationalDevelopmentandReformCommission(NDRC)launchedtheBeltandRoadSustainableCitiesAlliance.BothinitiativeshaveChineseandinternationalstakeholdersinvolved(forexampletheWorldResourcesInstitute/WRIortheUNHabitat).17Withintheseworkinggroups,Chineseandinternationalstakeholdershaveaplatformtodiscussandagreeonissuesregardinggreenurbantransportation.Includedinthesegroupsarealsothecommercialofurbantransport.

3.5 Key commercial stakeholders for urban transport in the BRI

Chinahasbuiltadomesticecosystemofkeyprivateandgovernment-ownedplayersthatinfluenceurbantransportonalllevels.Itisimportanttounderstandthiseco-systemtoanalyzepotentialactionsanddependencieswhenincentivizinggreenurbantransportintheBRIwithdifferentcommercialinterestsandstrategiesatplay.

Urban Vehicle hardware players

Withamassiveoveralltransportationandurbantransportationmarket,Chinahascreatedacarandtruckindustrywithliterallyhundredsofmanufacturers,particularlyinthefreightvehicleindustry.

Inthepassengercarmarket,thetop10Chinesecarmanufacturerssoldabout25millionvehiclesin2018,accordingtotheChinaAssociationofAutomobileManufacturers.ThemostimportantChineseplayersinthepassengervehicleindustryareGreatWallMotor,GeelyAutomotiveHolding,SAIC,GuangzhouAutomobileGroup.Mostofthecarcompaniesareprivatelyheld.

Theurbanbusmarketissimilarlyfragmented.Themost

17　UN Habitat, “UN-Habitat to Extend Joint Engagements through China’s Sustainable Cities Alliance – UN-Habitat,” UN Habitat, April 2019, https://unhabitat.org/un-habitat-to-extend-joint-engage-ments-through-chinas-sustainable-cities-alliance/.

importantplayersareYutongbus,BYDandFoton,whilemanysmallmanufacturessupplybusestoChinesecustomers.

Intheurbanfreightvehiclemarket,manysmallworkshopsprovidevehicles,suchaselectric3-wheelersforurbane-commercedelivery.AsimpleonlinesearchonJune6,2019forelectricminitruckontheChinesee-commerceplatformAlibabahasreturned23,836differentsuchvehiclesforsale(seeFigure6),showingthebreadthofmanufacturersandlackofstandards.

Inbothpassengerandfreightvehicles,electrificationofvehiclesplaysanincreasingrole.Chineseconsumersboughtabout1,2millionelectricvehicles,halfoftheworld’selectricvehiclesin2018.Producers,suchasBYDarelookingforanever-increasingshareofthepassengercar,bussesandfreightvehicles,particularlyofelectricvehicles.Cities,likeShenzhen,butothersaswell,arephasingoutcombustionenginevehiclesinpublictransport(busses,taxis)andreplacethembyelectricvehicles.

Figure 6: ElectricurbandeliveryvehiclesinChina


12 13

Comparedtoroad-boundvehiclehardware,rail-basedurbantransport(e.g.subway,trams),ismostlystate-owned.Chinahasbuilt171subwaylinesandoperatesaround5.300kmofsubwaybytheendof201818.Therollingstockispredominantlysuppliedbystate-ownedCRRC.Thesubwayconstructionisoftendonebystate-ownedcompanies,suchasCRCC‒ChinaRailwayConstructionCorporationLimitedandCREC‒ChinaRailwayGroupLimited.

Traffic management and smart city

Trafficmanagementisacrucialpartforincreasingefficiencyofurbantransport,suchastrafficdemandmanagement,parking,signalingetc.Chinesecitiesareincreasinglyemployingbigdatafromcamerasandothersensorstooptimizetransportplanningandtrafficmanagement.Privatecompaniesareplayinganincreasingroleinurbantrafficmanagementandsmartcity:

- AlibabathroughitsHangzhouCityBrain,collectingdatafrom20.000cameras10.000taxistoimprovetrafficflow

- TencentinJiangsuprovince’ssmartcityprojects,thatincludesforexampleelectronictollcollectiontoimproveattractivenessforpublictransportation

- Baidu’sXiong’anNewAreawiththegoaltoimproveintegrationandtestingofautonomouscars

- ShenzhenUrbanTransportPlanningCommission(SUTPC)inShenzhen,using750millionpiecesofinformationdailytoimprovetrafficplanning

-

18　“China: Urban Subway Line Length 2018 | Statistic,” Statista, accessed June 6, 2019, https://www.statista.com/statistics/258606/length-of-subway-lines-in-chinas-cities/.

Enabling services

Relevantenablingservicesinurbanmobilityare,forexample,charginginfrastructureforelectricvehicles,digitalmobilityservicesorsatellite-basednavigation.Chinesecommercialstakeholdershaveoverthepastyearsacceleratedtheirresearch,andoutputinanumberofareas:

- Bytheendof2018,Chinahadbuiltabout730.000chargingstations,80%ofwhichwerecontrolledbyajoint-venturebetweenthegovernment-ownedStateGridCorpandChinaSouthernPowerGridcreatedbytheendof2018.19

- SatellitenavigationcapacityisprovidedbyBeiDou‒incompetitiontotheAmericanGPSnavigationsystem.AsofMay2019,BeiDouhad33operationalsatellitesthatallowforhigherprecision(upto0.1m)thanGPS(butlowerthantheEuropeanGalileoprecisionof0.01m).Thisisparticularlyrelevantintermsofautonomousdriving.

- DigitalmobilityservicesinChinahavebeengrowingrapidly.ThemostimportantplayersareDidiChuxing,whichprovidesaround30millionride-hailingridesperday(abouttwiceasmuchasitsAmericancounterpartUber)andoperatesseveralmillionrentalbikes(bluegogoandQingju);Meituan,operatestheMobikesharedbikesandride-hailinginseveralcities.

- DigitalmappingservicesinChinaexcludemostnon-Chineseproviders(e.g.GoogleMapsisnotavailableinChinawithoutusingaVPNprovider).MostnotableChinesemappingprovidersarethemajordigitaltechnologycompanies,suchasBaiduandAlibaba.

19　Shuiyu Jing, “China’s Largest Electric Vehicle Charging Operator Launched,” Chinadaily.Com.Cn, December 24, 2018, http://www.chi-nadaily.com.cn/a/201812/24/WS5c204569a3107d4c3a0026a8.html.

Investors

Urbanmobilityrequiresinvestmentinthehardware,trafficmanagementandenablingservices.InBRIcountriesandwithinChina,thelargestChineseinfrastructureinvestorsincludeChina’sdevelopmentbanks,suchastheChinaDevelopmentBank(CDB)andChinaEximBankandvarious(state-owned)commercialbanks,suchasICBCortheChinaAgriculturalBank.InChina,thesebanksalsoplay,tosomeextent,aroleinfinancingpublicurbaninfrastructure.Inaddition,provincialbanksplayaroleinsupportinglocalenterprises,forexampleinurbanvehiclehardware,suchascarsandtrucks.

- Furthermore,muchofthefinanceforpublicurbaninfrastructure,forexampleforsubwaysorbus-rapidtransit(BRT)systemsandroads,comesthroughissuing(green)bondsbythelocalpublictransportoperators.In2018,forexample,greenbondswereissuedtofinanceseveralurbanmobilityprojectsinChina(seeTable2):

Issuer UseofProceeds Amount(millionRMB)

BeijingInfrastructureInvestmentCo.Ltd

Constructionofseveralmetrolines,suchasNewAirportLine,Metrolines3,6,7,12,17,19

3,900(intwophases)

UrumqiCityTrafficInvestmentCo.Ltd.

Constructionandoperationofseveralbuslines 1,500

WuhanMetroGroupConstructionandoperationofseveralmetrolines,suchasMetroLine2,5,8,Caidian

5,600(inthreephases)

YangzhouTransportationIndustryGroupCo.Ltd.

Paymentandworkingcapitalofcleanenergybuses 500

ChengduMetroGroupCo.Ltd.

PaymentofdebtsforMetroLines1,2,3,4,7,10 2,000

Table 2: Bondissuancetofinancegreenurbantransport20

20 Source: International Institute of Green Finance (IIGF) Green Bond Project

Inregardstodigitalmobilityservices,Chineseprivateenterprises,particularlythebigthreetechnologycompaniesBaidu,AlibabaandTencent,aswellasthetaxiserviceDidiandthefood-deliveryserviceMeituan,haveinvestedmanybillionEURintheexpansionofmobilityservicesandmappingaswellasnewtechnologiessuchasautonomousdriving.

WhenlookingoutsideChinaintonon-ChineseBRIcities,financingurbaninfrastructureismorecomplex.Thebigdevelopmentbanksaremostadaptedtoworkwithnationalgovernmentsandtheirnationallylinkedenterprises(suchasstate-ownedenergycompanies,railwaycompanies).Mostofthesebankslackinstrumentstofinancesmallerprojectsanddealwithmulti-stakeholdersettingsonanurbanscale.Therefore,otherfinancinginstrumentsandinvestorsneedtobefoundfordevelopingurbaninfrastructure,forexamplelocallymanagedfunds,localgreenbonds,impactinvestors.


14 15

3.6 Summary of Background and Challenges

ChinahasexpressedhighambitionstodevelopitsBeltandRoadInitiative.Withincreasinginvestments,Chinanotonlyhopestoincreaseconnectivity,butconsumptionandbroadereconomicdevelopment.Chinesepolicymakers,companiesandinvestorsalreadyplayandaimtocontinuetoplayanincreasingroleinprovidingfinancing,hardwareandservicestobenefitfromthedevelopmentpotentialinBRIcountries’cities(includingwithinChina).

Asaconsequence,mobilitybothinurbanandinter-urbanareaswillbeaffectedalongtheBRIcountriesandcities.Themostlikelyoutcomewillbeastrongincreaseinpersonalmobilityandfreighttransport,riskingsevereenvironmentalconsequences,particularly:

- increaseingreenhousegasemissions

- increaseinpollutantemissions

- increaseinspaceuseforroadsandotherlinearinfrastructure

- increaseinnoise

Yet,technologicaldevelopmentsintransportandmobilitycouldallowmakingtheseinvestmentsanddevelopmentsgreener.InordertodeveloppathwaysforsupportinganurbanmobilitydevelopmentthatisgreenandtodevelopscenariosforurbantransportinBRIcountries,itisthereforenecessarytounderstandthenextstepsoftechnologicaldevelopmentintheurbanmobilitysector.ThenextchapterwillprovideanoutlookintothenextphaseofgreenurbantransportinChinaandBRIcountries.

4 The next phase of Green Urban Transport in China and BRI countries – green urban mobility innovation

ThenextphaseofgreenurbantransportinChinaandtheBRIisuncertainduetoatransformationofmobilitytechnology,drivenbyChinese,EuropeanandAmericancompanies.

China,toachieveitsconstitutionallyenshrinedgoalofcreatingan“ecologicalcivilization”,hasbeensettingfinancialandotherincentivestodevelopgreeninnovationsinandimprovetheecologicalfootprintoftransportation‒bothinurbanandinruralareas.Chinahasalsoestablishedseveralstrategies,toaccelerateinnovationanddevelopmentsintransportandmobility:

- MadeinChina2025releasedbytheStateCouncilinMay2015identifiedtheautomotiveindustryasoneofthetenindustriestobedevelopedinthenext10years,withafocus,forexample,toreducetrafficaccidents,achievingadrivingspeedofautomatedvehiclesof120km/handreducingenergyuseandemissions.

- InternetPlusreleasedbyChina’sPremierLiKeqianginMarchtointegratecloudcomputing,bigdataandtheInternetofThingsandspeedupdigitalization.

- ArtificialIntelligence(AI)StrategicPlanreleasedin2018bytheStateCounciltoacceleratethedevelopmentandapplicationofartificialintelligence,alsoinmobility.

Thesepolicies,combinedwithmorespecificstrategies(e.g.DraftStrategyforInnovationandDevelopmentofIntelligentVehiclesfrom2018),taxandmonetaryincentivescombinedwithamassivedomesticmarketandanincreasingexportmarket(particularlythroughBRI)haveallowedChinesecompaniestojointheraceinshapingtomorrow’smobilityworldthroughinnovationingreenmobility.

Europeanplayers,suchastheGermanmobilityindustry,areequallyshapingtheraceforthefutureofmobility.Withalongtraditionofmobility,manyEuropeanmobilityplayersarecountedamongthemostcompetitiveandinnovativeintheworld.

ThefollowingparagraphswillelaborateonmobilityinnovationsthataninfluenceonurbanmobilityalongtheBRI.Forthedescription,theCASEframeworkwillbeused,whichlooksatthedevelopmentofmobilityinnovationintermsof

- Connectivity

- Automation/autonomousdriving

- Sharing

- Electrification

Thesefourfactorswillparticularlyinfluenceroad-boundtransport.

Inaddition,Chinaalsoinvestsinthedevelopmentofrail-basedurbantransport,particularlyintheconstructionofsubways.However,duetothehighcostsofsubwayconstruction,fewBRIcitiesoutsideChinahaveengagedChinainconstructingsubwaysatthispointintime(currently,ChinaisengagedintheconstructionofthreesubwaylinesinBRIcities:Hanoi,Vietnam,KualaLumpur,MalaysiaandMoscow,Russia).Therefore,thefocusofthissectionwillbeonthefutureofroad-basedurbantransportinnovation.

4.1 Connected mobility

Connectivityinmobilityisincreasinglyinfluencingurbanmobilityintermsofefficiencyandaccessibility.Connectivityreferstothepossibilitytodigitallyconnectpeople,transporthardware,goods,andinfrastructure:

- toletthemcommunicatewitheachother(e.g.towarnofdangers)

- tocollectdataonthestateofthedifferentcomponents(e.g.toallowforpredictivemaintenanceandincreasemaintenanceefficiency)

- toanalyzelive-datatobetterorganizemobilityservices(e.g.changerouting,stop-lightsignals,


16 17

reacttoweatherevents,reacttobreak-downs,forexampleofcool-chainsinfoodtransport)

- toanalyzedataforbettertransportplanning(e.g.urbanroadnetworks,urbanpublictransportationhubs)

Connectedmobilityisalreadyapplied,forexampleinnavigationsoftware(suchasGoogleMaps,Alimaps,BaiduMaps),wherethesoftwarecalculatestraveltimesdepending,amongstothers,onthenumberofusersontheroadwhoareconnectedtothesoftware.

Thedataandpossibilitiesfromconnectedmobilitywillallowgovernments,cityplannersandusers,forexample,toincreaseefficiencyandtransparency,forexamplethrough:

- betterplanningoftheuseandpricesofmobilityservices(e.g.bycheckingfreightcostsandavailability,traveltimesofdifferentmodesoftransport)

- betteraccountabilityofthestatusofmobilityservices(e.g.whendoesthebuscomesuchas车来了‒chelaile,whenthee-commercedelivery,freshnessofperishablegoodsinlogistics),

- betteravailabilityofmobilityservices,forexampleorderingmobilityservices(e.g.expresspackagedeliveriessuchas 顺丰‒shunfeng,movingservicessuch货拉拉‒huoweiwei)

- increasedsafetyandoversight(e.g.byhavingautomated(no)parkingenforcement,entry/exitenforcementdependingonfuelefficiency,greensignalsforambulance).

Dependingonthedepthandbreadthofapplication,connectedmobilitywillimpactbothurbanfreightandpassengertransportinBRIcities.

4.2 Autonomous mobility

Autonomousdrivingisdevelopinginseveralstages.TheSocietyofAutomotiveEngineers(SAE)classifiesautonomousdrivingalongsixlevelsfromLevel0withnoautomationtoLevel5withfullautomationwherenodriverisnecessaryanymore.Level1to4describedevelopmentsofthemobilitywithdecreasinginteractionbetweenthevehicleandthedriver.21

Whiletoday’smobilityecosystemforbothurbanfreightandurbanpassengertransportfullyreliesonemployingdriverstotransportgoodsandpeople,expertsestimatethatby2020Chinesetechcompanies(suchasBaidu,DidiChuxing)willbeabletotesttheirfirstfullyautonomousdrivingvehicles(Level5)onhighwaysandcertaincityroads.22Automationhappensforallformsoftransport‒andChinesecompaniesareadvancingthetechnology,forexampleinbuses(ShenzhenbasedHaylion’sAlphaba),taxisandcars(e.g.Didi,Pony.ai),deliveryvehicles(e.g.Alibaba,JD.com).

Europeanplayersalsodriveautonomousmobilitydevelopment.PatentapplicationinautomatedvehicleplatformsandsmartenvironmentbyEuropeanplayershaverisenby330%from2011to2017,comparedwith16%acrossalltechnologies,accordingtotheEuropeanPatentOffice23.Amongthe10toppatentapplicantsforautomateddrivingfromJanuary2010toJuly2017,6wereEuropean.

21　 (SAE) Society of Automotive Engineers, “Classification of Auto-mated Driving,” 2016, https://www.sae. org/standards/content/j3016_201609/.

22　Marcel Schlobach and Retzer, Sandra, “Defining the Future of Mobili-ty: Intelligent and Connected Vehicles (ICVs) in China and Germany” (Eschborn, Beijing: Gesellschaft fuer internationale Zusammenar-beit, giz, 2018), http://www.sustainabletransport.org/wp-content/uploads/2018/09/Defining-the-Future-of-Mobility-ICVs-in-Chi-na-and-Germany-1.pdf.

23　European Patent Office, “Sharp Rise in Patent Applications for Self-DRiving Vehicles in Europe” (Munich: European Patent Of-fice, November 6, 2018), https://www.epo.org/news-issues/news/2018/20181106.html.

Figure 7: WorldwidePatentFilingsrelatedtoAutomatedDriving(January2010‒July2017)24

Autonomousmobilityfortrucksisexpectedtobecomeavailablewithinthenextyears‒somepredictionsestimateevenby2020.25Thewidespreadadoption,howeverwilltaketimeanddependonabroadersetoffactors(includingtheconnectivitydiscussedabove).

Autonomousdrivingcouldallowtransportingmorepeopleandgoodsatcheaperprices‒allowingformoremobilityontheroads.Thismight,however,havenegativeexternalities,particularlyinregardstospaceuse,energyuse,noise,whichishigherinindividualmobilityandsmallerbatchsizes.Employingconceptsofsharedmobility(seenextparagraph),autonomousmobilitycouldprovideamoregreenfutureofmobility.Atthesametime,autonomousmobilitymightmakeroadssafer,publictransportationmoreflexible(e.g.throughautonomousminibuseswithflexibleroutes).Allinall,autonomousvehicles“arelikelytochangecitylandscapes‒althoughthismighttakedifferentdirectionsdependingonhowusagedevelops”26,showingthevastuncertaintyofthefutureofurbanmobilityandtheimportanceofsteeringinvestmentsthroughincentivesinthedesireddirections.

24　Schlobach and Retzer, Sandra, “Defining the Future of Mobility: Intel-ligent and Connected Vehicles (ICVs) in China and Germany.”

25　KPMG International, “2019 Autonomous Vehicles Readiness Index” (KPMG International, 2019), https://assets.kpmg/content/dam/kpmg/xx/pdf/2019/02/2019-autonomous-vehicles-readiness-index.pdf.

26　KPMG International.

4.3 Shared mobility

Sharedmobilityreferstotheconceptofnotindividuallyusingtransporthardware(suchasaprivatecar,bike,truck),butprovidingmobilityserviceswiththattransporthardwaretomanypeople.Theseservicescanincludebikesharing,ridehailing,carsharing,ortrucksharing.Throughdigitalization,theubiquity,efficiencyandeaseofaccesstosharedmobilityhasincreasedsignificantly.

Chinahaspushedsharedmobility,forexamplein

- ridehailingthroughtheDidiplatform

- sharedtruckhailingandsharingthroughHuolala,gogovan,or58Suyun(whichisactiveinover100Chinesecities)

- sharedurbanlogisticsfacilities(withthestrongsupportfromlocalgovernments),forexampleinChengdu

- sharedbicyclesthroughserviceslikeMeituanMobike,Bluegogo

Europehaslongbeenanadvocateofsharedmobility,withcountlessservicesforcars,bikes,scootersetc.suchasDriveNow,Car2Go(nowmergedintoShareNow),CallaBike,Emov,Spinandmanymore.ContrarytoChina,theEuropeansharedmobilitydevelopmentisveryfragmented.


18 19

Figure 8: Sharedandmicro-mobilityservicesinEurope27

Asaresult,Chinesepassengertransportisalreadyincreasinglyskewedtowardsride-hailing:InChina,ridehailingconstitutesalargershareofdistancetravelledthaninanyothercountry(seeFigure9).

WhetherthissharedmobilityforpassengersandfreightwillexpandwithinChineseandinternationalBRIcitieswilldepend‒again‒ontheavailabilityofsharedmobilityservices(suchasservicesoftheride-hailingcompanyDiDi,sharedmobilityplatformsforfreight)andtheacceptanceofthem.Oftentheseserviceshaverunintolocalandlegalresistanceduetothefearofundercuttingpricesofincumbenttransportindustries.

Atthesametimeitisimportanttonotethatsharedmobilityinitselfisnotagreensolutionforurbanmobility.Severalstudieshavefoundthat,forexample,ride-hailinghasincreasedcar-boundtrafficandhassubstitutedmoreenvironmentallyfriendlybikeandpublictransportationuse.28Forsharedtransporttobegreen,policiesmustallowtopoolresourcesformoreeffectiveuseofexistingresources.

27　 Augustin Friedel, Free Floating Mictro Mobility Map Europe (Maphub, n.d.), https://maphub.net/Augustin/micro.

28　Regina Clewlow and Gouri Shankar Mishra, “Disruptive Transpor-tation: The Adoption: Utilization, and Impacts of Ride-Hailing in the United States,” Institute of Transportation Studies (UC Davis, October 2017), file:///Users/cnedopil/Downloads/2017_UCD-ITS-RR-17-07%20(1).pdf.

Figure 9: Modalshareofmobility29

4.4 Electric mobility

Theelectrificationofmobilityisapre-requisiteformovingtozeroemissionsandthusgreenermobility.Aslongascarsareburningfossilfuels,theywillcreategreenhousegasemissionsandotherpollutants.

Electrificationofmobilitycanhappenbyswitchingtoeitherbattery-electriccarsorfuel-cellvehicles.Currently,mostelectricvehiclesareplug-inbattery-electriccars(whichneedtobechargedbyapoweroutlet),orhybridcarswithabatteryandaninternalcombustionenginetochargethebatteryandprovidelongerranges.Fuelcellcarsarefewinbetween,whilefuelcelltrucksandbusesarebeingdeployedinsmallscale.

Whetherthemobilityusingelectricityisgreenerthanwiththecurrentinternalcombustionengineismoststronglydependentonthesourceofenergy.Forexample,theAsianDevelopmentBankestimatesthatEVswillresultinsignificantGHGreductionsifthegridfactorisbelow0.8kilogramofcarbondioxideequivalent

29　 The Economist, “China’s Plans for the Electrified, Autonomous and Shared Future of the Car,” The Economist, April 4, 2019, https://www.economist.com/briefing/2019/04/04/chinas-plans-for-the-electrified-autonomous-and-shared-future-of-the-car.

emissionperkilowatt-hour(kgCO2e/kWh).30Inordertomovetoazero-emissionmobility,electricityproductionwillalsoneedtobezeroemission(e.g.throughwindpowerandsolarpower).

Currently,99%ofcarssoldarestillcombustionenginecars.However,Chinahasacceleratedtheelectrificationofallmodesofurbantransportation:publictransportation(suchasbuses),privatepassengertransportation(cars,taxis),andurbancommercialvehicles(urbanfreight,urbanpublicservices).Chinahasnotonlybecomethesupplierofmostelectricvehiclesintheworld,butalsoitsbiggestconsumer.WhiletotalsalesofvehiclesinChinahasbeenonadownwardtrendwithcarsalesdroppingfrom2017to2018by2.8%to

30　 Asian Development Bank, Jürg Grütter, and Ki-Joon Kim, “E-Mobility Options for ADB Developing Member Countries” (Asian Development Bank, April 1, 2019), https://doi.org/10.22617/WPS190075-2.

28.1million(constitutingabout32%ofglobalcarsales)31,theshareofelectricvehiclesamongthesalesiswith7,3%twiceaslargeasthatofEurope(seeFigure10)withsalesexpectedtohit1.5millionin2019(upfrom1.1millionin2018).InEurope,electriccarsaleshavebeenbehindexpectations,exceptinNorway.Althoughthemarkethasgrownby70%fromApril2018toApril2019,altogethersome24,000fullyelectricand37,000plug-inelectricvehiclesweresoldacrossEurope.32

Figure 10: Electriccarsalesaspercentageoftotalpassengervehiclesales33

31　Yilei Sun and Brenda Goh, “China Car Sales Hit Reverse for First Time since 1990s,” Reuters, January 14, 2019, https://www.reuters.com/article/us-china-autos-idUSKCN1P805Z.

32　Jose Pontes, “Electric Vehicle Sales Up 70% In Europe,” CleanTech-nica, June 3, 2019, https://cleantechnica.com/2019/06/03/electric-vehicle-sales-up-70-in-europe-april-ev-sales-report/.

33　 Nathaniel Bullard and Colin McKerracher, “Dispelling the Myths of China’s EV Market,” Bloomberg, February 8, 2019, https://www.bloomberg.com/opinion/articles/2019-02-08/china-s-electric-vehi-cles-put-traditional-engines-on-notic.

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42015

0

2

4

6

8%

2015 2015 2015

3.865%4.447%7.342%

4Q 18

Europe North America China

China Takes the LeadElectricvehiclesalesasapercentageoftotalpassengervehiclesales

Whose car is it anyway?ShareofdistancetravelledPolledJanuary2019,%

Publictransport

China

SouthKorea

Russia

Japan

Western

Europe

United

States

Demand-drivenmodes*

Car Other

Source:RolandBerger *Car-sharing,ridehailing,taxi,etc.

0 20 40 60 80 100


20 21

Intheurbancommercialvehiclespace,Chinaissim-ilarlyacceleratingitselectrification.In2018,Chineseoperatorsboughtabout200,000electriclightdutycom-mercialvehicles‒thatis6%ofthetruckmarketbelow6tons.34ThecityofShenzhenhasledtheelectrificationoflogistics,havingastockofalmost62,000electriclogisticvehiclesonitsroads(seeFigure11).

Figure 11: ElectricVehiclePopulationinShenzhen2015-1835

34　JumoreGlobal Insights, “Electric Trucks May Lead China’s EV Market in the Future,” JumoreGlobal Insights (blog), December 11, 2018, https://insights.jumoreglobal.com/electric-trucks-may-lead-chinas-ev-market-in-the-future/.

35　 Allison Crow et al., “A New EV Horizon - Insights from Shenzhen’s Path to Global Leadership in Electric Logistics Vehicles” (Rocky Mountain Institute, June 2019), https://rmi.org/insight/a-new-ev-hori-zon.

Mostimportantlyforgreenurbantransportareelectricbusses.Ofthe425.000electricbusesinoperationworld-wide,Chinaoperatedabout421.000(seeFigure12),withestimatesrangingthat18%ofChina’stotalbusfleetwaselectrifiedbytheendof2018.36

36　“Electric Bus, Main Fleets and Projects around the World,” Sustain-able-Bus.com, 2019, https://www.sustainable-bus.com/electric-bus/electric-bus-public-transport-main-fleets-projects-around-world/.

Figure 12: Globalsalesofmunicipale-buses37

Salesofelectricbuseshavegrownfromfewthousandsin2013peryearto200.000expectedin2019.TheseelectricbusesinChina,accordingtoa2019Bloombergstudy,displaceabout270,000barrelsofdieseldemandperday‒about3timesthedisplacementbyalltheworld’spassengerelectricvehicles.38

37 Brian Eckhouse, “The U.S. Has a Fleet of 300 Electric Buses. China Has 421,000,” May 15, 2019, https://www.bloomberg.com/news/ar-ticles/2019-05-15/in-shift-to-electric-bus-it-s-china-ahead-of-u-s-421-000-to-300.

38　 Alaric Nightingale, “Forget Tesla, It’s China’s E-Buses That Are Denting Oil Demand,” Bloomberg, March 19, 2019, https://www.bloomberg.com/news/articles/2019-03-19/forget-tesla-it-s-china-s-e-buses-that-are-denting-oil-demand.

Oneimportantprerequisitefortheelectrificationofmobility,particularlythroughbattery-electricvehicles,istheavailabilityofbatteryandtheirtechnology.Ofthetop10globalproducersofbatteriesforelectricvehicles,7areChinese,dominatedbyBYDandCATL(thethreenon-ChineseproducersareJapanesePanasonic,SouthKoreanLGandSamsung)39(seeFigure13).China’stotalplannedbattery-makingcapacityisthreetimesthatoftherestoftheworld’s40.

39　 Anna Holzmann, “China’s Battery Industry Is Powering up for Global Competition | Mercator Institute for China Studies,” Merics, October 24, 2018, https://www.merics.org/en/blog/chinas-battery-in-dustry-powering-global-competition.

40　 The Economist, “China’s Plans for the Electrified, Autonomous and Shared Future of the Car.”

ElectricLogisticsVehicles OtherElectricVehicles

200,000

150,000

100,000

50,000

2015

13,70032,871

52,450

36,64911,2289,039

91,289

61,857

2016 2017 20180

China Europe India U.S. Restoftheworld

415.648K2.441K385.000676.337779.996

Numbe

rofE

lectric

Veh

icles

China's Lasting DominationGlobalmunicipale-busfleet

2018 2040

Source: BloombergNEF's �ElectricVehicleOutlook2019”


22 23

Figure 13: GlobalEVbatterymarket41

Whileanumberofchallengesintheelectrificationofur-bantransportremaininChina(e.g.providingsufficientcharginginfrastructure,batteryrecycling,sustainableelectricityproduction,qualityissues),thegoalofChinatobecomeagloballeaderinelectricmobilityhasbeensetinmotionbythe“MadeinChina2025”plan,whereelectricmobilityisonecornerstone,aswellasthe13thFive-YearPlanwhichpushesforthefurtherinnovativeandgreendevelopmentofChina(the14thFive-YearPlanisexpectedtobepublishedin2020,furtherex-pandingChina’sgreenmobilityambitions).

Electrificationhasamassiveimpactonurbantranspor-tationinChinaandpossiblyinBRIcountries.WhetherChinawillbeabletousetheBRItosuccessfullyacceler-ateitsmobilityelectrificationdrivewilldependonlocalandinternationalsupportofinvestmentandcapacitybuilding,aswellasregulatoryandconsumerbehaviors.

41 Akito Tanaka, “‘Made in China 2025’ Forges Ahead with EV Domi-nance in Sight,” Nikkei Asian Review, May 28, 2019, sec. China Tech, https://asia.nikkei.com/Business/China-tech/Made-in-China-2025-forges-ahead-with-EV-dominance-in-sight.

4.5 Summary - the future of urban mobility from China and Europe to the BRI

BothChineseenterprisesandChinesepolicymakersseetransportascentralpointforChineseeconomicgrowthandinnovation.InitsMadeinChina2025policyandinitsChineseFiveYearPlans,mobilityhasbeenidentifiedasanationalcomponenttoachieveChina’sgoalsofrejuvenation,becominga“moderatelywell-offsociety”by2021andacompletelydevelopedcountrybyaround2049(the100thanniversaryoftheP.R.China).

Inthis,China’sambitionisnottouseitssizetosurpassWesterncountriesinvolumeofcarsales.“ItwantstouseindustrialpolicytoovertaketheWestontheroadtothefuture”ofmobilitythroughelectrification,connectivity,autonomousandsharedmobility.42

ThishasledtheChinesetransportecosystemtoadvancerapidlyinmobilitytechnologywithnoendinsight.

42　 The Economist, “China’s Plans for the Electrified, Autonomous and Shared Future of the Car.”

Indeed,therapiddevelopmentsofurbanmobilityintermsoftechnologies,behaviorsandpoliciesarepossi-blyjustabeginningforChinesecities.Chinesecitiesandnationalgovernmentshavealreadyimplementedmanyimpressiveurbanmobilitytransformations(suchasthefullelectrificationofShenzhen’sbusandtaxifleets)andtheycontinuetodevelopambitioustargetsthatwilltransformurbantransportusingautomation,connectiv-ityandsharedmobility.

Atthesametime,Chineseinternationalambitionstobeastandardsetter,“improvetheglobalgovernancesys-tem”43,growtradeandinvestininfrastructurethroughitsBRImustbeunderstoodasstrategytoaccelerateChina’sexportambitionsofChinesedomestictransporttechnologies.

Therefore,oneexpectationofthenextphaseofgreenmobilityforBRIcitiesisanextrapolationofthepaththatadvancedChinesecitieshavealreadyembarkedon.However,otherpossibilitiesarealsoequallyconceivable‒dependingontheglobaleconomicsituation,localspecificitiesandstrategies,Chinesestrategies,andin-ternationalcooperation.

43 Xi Jinping, “Opening Speech Belt and Road Forum 2019” (April 26, 2019), http://www.cpecinfo.com/news/the-complete-text-of-presi-dent-xi-jinping-speech-at-the-belt-and-road-forum-for-international-cooperation-2019/NzAwMQ==.

China dominates the market of EV batteries(in shipments by gigawatts-hours)

1 ContemporaryAmperexTechnology(China)

2 Panasonic(Japan)

3 BYD(China)

4 LGChem(SouthKorea)

5 EnvisionAESC(China)

6 SamsungSDI(SouthKorea

7 GuoxuanHigh-Tech(China)

8 TianjinLishenBattery(China)

9 FarasisEnergy(Ganzhou)(China)

10 ShenzhenBAKBattery(China)

0 5 10 15 20


24 25

Thefutureofurbanmobilityisallbutpredictablewithfastdevelopmentsintechnology,politicalandeconomicuncertaintiesaswellasdivergentinterestsofstakeholders.Atthesametime,China’sBeltandRoadInitiativewillplayanimportantroleinshapingurbantransportduetothepossibilityofinvestmentsininfrastructureandChina’stechnologicalcapabilities(whichChinesefirmswanttoexport).WithaBRIthatisstillayoungandevolving(itwasconceivedonlyin2013)andrapidtechnologicaldevelopmentsintransportinnovation,developmentsinurbanmobilityinBRIcitiesareallbutcertain‒withthepossibilitytoplayoutinmanydifferentdirections.

AgainstthebackdropofthisuncertaintyoverthedevelopmentofurbanmobilityinBRIcitiespairedwiththeneedtoprotectglobalgoods,suchasclimate,bio-diversity,socialinclusion,itisimportanttounderstandpossibledevelopmentpathsthathelpuspreparecooperationandmitigationstrategiesforinternationalstakeholders(forexampleBRIcitieswithEuropeancities),whilealsounderstandinginvestmentneedsandopportunities.

BasedonthetechnologicaltrendsinurbanmobilityandwiththegoaltobetterunderstanddirectionsofthedevelopmentofurbantransportinBRIcitiestosupportpolicymakersandinvestorsintheirunderstandinghowtocontributetogreenurbantransportinBRIcities,threescenariosofurbantransportdevelopmentinBRIcitiesarebeingsuggested:

- Scenario1:Ecologicalurbancivilization

- Scenario2:Developmentatdifferentspeeds

- Scenario3:Globalslowdown

5 Scenarios of urban transport development

in the BRI in the year 2033

Thescenariosarepre-dominantlybasedonexpertinterviewsandpublishedresearch44.Itisimportanttonotethatthesescenariosserveonlyasanorientationoffutureurbantransportdevelopment,butnotasapredictionofthefuture.Atthesametime,thescenariosaregeneralizationsthatcannotdetaildevelopmentsintheverydiversecitiesoftheBRI.

5.1 Scenario 1: Ecological Urban Civilization

Rationale and description

Chinaisasignatorytointernationaltreatiesonenvironmentalprotection(e.g.theParisAgreementonlimitingglobalwarmingthroughreductioninGHGemissions,partnerintheConventiononBiologicalDiversity)andhasenshrinedinitsconstitutiontobuildan“ecologicalcivilization( … )inharmoniouscoexistencebetweenmanandnature”.TheChinesePresidentXiJinpingstressedthateconomicdevelopmentshouldnotbedetrimentalfortheecologicalenvironment.45ChinaalsobelievesthatitisarolemodelforthedevelopmentofotherBRIcountriesandwhileitadherestotheprincipleofnon-interferenceinothercountries,itsupportstheecologicalgrowthofthesecountriesbasedonChineseexperiences.

44　Liisa Ecola et al., The Future of Mobility: Scenarios for China in 2030 (Santa Monica, CA: RAND, 2015). Johanna Zmud et al., The Future of Mobility: Scenarios for the United States in 2030 (Santa Monica, CA: RAND, 2013).CA","number-of-pages":"115","source":"Library of Con-gress ISBN","event-place":"Santa Monica, CA","abstract":"\"What might one expect for the future of mobility in the United States in 2030? Mobility is defined as the ability to travel from one location to another, regardless of mode or purpose. RAND researchers used a six-step scenario development process to develop two thought-provoking scenarios that address this question. The six steps are (1

Lynette Cheah et al., “On the Move in 2040 - A Foresight Study on Urban Mobility in Singapore” (Singapore: Singapore University of Technology and Design, 2016), https://mobility.sutd.edu.sg/foresight/download/.

Julie Rozenberg and Marianne Fay, Beyond the Gap: How Coun-tries Can Afford the Infrastructure They Need While Protecting the Planet., Sustainable Infrastructure Series (Washington, D.C.: World Bank Group, 2019), https://openknowledge.worldbank.org/han-dle/10986/31291.

45　Pan Xiang-chao, “Research on Xi Jinping’s Thought of Ecological Civilization and Environment Sustainable Development,” IOP Confer-ence Series: Earth and Environmental Science 153 (May 2018): 062067, https://doi.org/10.1088/1755-1315/153/6/062067.

Practical consequences

BasedonChineseandinternationalguidingprinciplesforanecologicaleconomy,theChinesesociety,Chinesebusinesses,ChineseregulatorsandChineseinvestorsnationallyandinternationallyacceleratetheirsupportoftheimplementationofgreenurbantransporttechnologiesandconcepts.

By2033,citiesalongtheBeltandRoadInitiativewithinfrastructureinvestmentswithChineseparticipationand/ortechnologywillseeanaccelerationoftheapplicationofsustainableurbantransportationpolicies,forexample:

Passengertransport Freighttransport Transportgovernance

- publictransport,particularlyelec-tricbusrapidtransportfleets(BRT)arethedominantmodeofpeo-ple’stransport,withon-demandpick-upsandflexiblerouting;

- BRTroadinfrastructureisthedominanturbanroadsystem

- infrastructureforprivatecarsiskeptataminimum;

- non-motorizedtransportinfra-structureisexpandedstrongly,withtree-linedroadsthatgiveshadeandprotectagainstrainforthepeopleonfootandonsharedbikes;

- individualtransportthroughride-hailingorsharedcarsisdonewithelectriccars;

- duetoalackofprivateparkingspotsandhightaxesforcarown-ership,privatecarownershipiskeptataminimum;

- Modalsharesare46:o Walking1%o Cycle:4%o Publictransport:60%o Car:25%o Other:10%

- urbanfreightisdeliveredwithelectricandautomatedvehicles;

- inordertoincreaseefficiency,smallstoragefacilitiespairedwithbehavioralanalysesallowforabetterjust-in-timedelivery,significantlyincreasingefficien-cyofdelivery(asonedeliveryattemptsuffices);

- sharedlogisticsinfrastructure(e.g.shareddistributioncenters)andsmarttechnologiesincreasepoolingofresourcesandthushigherinfrastructureutilization.

- Urbanandinternationalpoliciesarefocusingon“avoid,shiftandimprove”policiesforurbantrans-port;

- Citygovernmentsemployinte-gratedland-useandtransportplanning,suchas“transitorienteddevelopment”47

- urbancityplannersarefullyusingbigdataforquickerandmoreac-curateplanningofcitiesaccordingtotheneedsofthepeople,flowofgoodsandnaturalenvironment;

- enforcementofgreenurbantrans-portlaws(e.g.restrictedparking,no-entryzones)isimplementedthroughsmarttechnologies;

- incentivesforgreenurbanmobility(e.g.preferentialentryzones,sub-sidies)areimplemented;

- disincentivesforbrownurbanmobilitytechnologies(e.g.carbontaxes)areimplemented.

Table 3: EcologicalUrbanCivilizationDevelopmentsin203346 Based on: Nicolas Wagner, “The Billion Dollar Question - How Much

Will It Cost to Decarbonise Cities’ Transport Systems,” Discussion Paper (International Transport Forum (ITF), 2018), https://www.itf-oecd.org/sites/default/files/docs/billion-dollar-question_2.pdf.


26 27

ChineseandEuropeanstakeholderswillbeacoresupplierandinvestorofthesetechnologiesandsystems.ThiswillallowChinaandEuropetoexpanditsindustriesandgreentechnologiesfasterbyexportingthemtoBRIcities.Thiswillcreateawin-winsituationthatisreducingcarbonemissions,maketransportmoreefficientandcitiesmoreliveable,whileprovidingeconomicgrowthopportunitiesthroughtradeand(digital)connectivity.

Governance conditions

TheEcologicalUrbanCivilizationwillbeachievedbypro-activeChinese,EuropeanandBRIstakeholders.Inregardstogovernanceandpoliticalconditions,theChinese,Europeanandinternationalstakeholderwillhave

- fullyunderstoodandincorporatedtheAvoid-Shift-andImproveapproachtosustainabletransport

- supportedlocalcitygovernmentsinBRIcountriesindevelopingurbanplanningcapacity,includingtheuseofdigitaltechnologiesapplyingbigdata(e.g.tooptimizepublictransportationroutes);

- supportedlocalcitystakeholdersingreenmobilityenforcementcapacity,suchasframeworksforuseofdigitaltechnologiesforsupervisionoftrafficviolations(e.g.parking,no-entryzones),safestreetbehavior(e.g.forsafebikingandwalking),

- appliedstrictregulationswithinChinatoadheretoagloballysustainabledevelopmentmodelintermsoftechnologyexports,financingoversight,capacitybuilding(e.g.ChinesefinancialinstitutionsstoppedinvestingintechnologiesinBRIcitiesthatcontributedtopollutionandGHGemissions)

- broadlyintegratedstakeholdersindecisionmakingprocessestogainsupportoflocalpeople,businessesandothersforgreenurbanmobilitydevelopmentallowingfornewformsofliveablecitiesthatareadaptivetothelocalcircumstances;

- Globalcommunityhasfoundbetterenforcementmechanismsforgreendevelopment(similartoUN’s“ResponsibilitytoProtect”framework).

- Citieshavestartedcooperating,e.g.withintheC40,theGreenBeltandRoadCoalition,onanelevatedlevelthatincludessharingofbestpractices,standardsofmeasurementandincreasedtransparencyinreportingofdata.Infact,citiesarecompetingwitheachotherintermsofgreenachievements.

Technological conditions

TheEcologicalUrbanCivilizationwillrequirespecifictechnologiestobeacceleratedintheirdevelopmentandapplication.

- greentechnologiesandtheirapplicationarefurtherimprovedandincludeafulllife-cycleanalysestoavoidunintendedconsequences(e.g.batteryrecyclingofelectricvehicles);

- digitaltechnologiesarefurtherimproved,suchasinbigdataanalysiscapabilitiesforurbanplanning,trafficmanagement,routeplanninginlocalizedsettings;

- thebroadapplicationofgreentechnologieshasdecreasedpricesforgreentechnologies,suchaselectricbuses.

- BigdataandAIwillimprovedramaticallywithaflurryofinnovatione.g.tomonitoremissions,improveplanningandoperationefficiencyinlogistics,circulareconomyinpackagingetc.

Financing conditions

Theannualinvestmentsforthe“EcologicalUrbanCivilization”scenarioareabout190billionUSDperyearforalllow-andmiddleincomecountries,equalingaround0.45%ofeachcountriesannualGDP.47

Inordertofinancetransportinfrastructureintheecologicalurbancivilization,thefollowingstepshavebeentaken:

- investors,suchasnationaldevelopmentbanks(e.g.CDB),andcommercialbanks(e.g.ICBC)wereencouragedtoinvestingreentechnologiesonly,e.g.throughtaxcutsforgreenfinanceinstruments,stricterregulationregardinginvestmentinnon-greentechnologies;

- privateinvestmentsingreentechnologiesinBRIcitieswasencouragedthroughmoremarket-drivenpolicies,betterinternationalfinancialintegration(bothpolicyandtechnology),betterinvestorprotectionalsoforinvestorsofsmallerinvestments;

- insurancepremiums(e.g.withSinosure)includeenvironmentalrisksandarethussignificantlyhigherforbrowninvestmentsthanforgreeninvestments.Thisfurtherdroveuppricesforinvestmentsinbrowntechnologies.

- newfinancinginstrumentsthatallowcash-strappedmunicipalitiesandpublictransportoperatorstoinvestingreenmobilitytechweresupported(e.g.PAYS‒seeCalloutBox1)

- Nationalgovernmentsincentivizedtheissuanceofgreenbondsusedforgreenurbantransport(withascience-baseddefinitionof“green”)fordifferentplayersinthemarket(investors,municipalities,operators)

47 Rozenberg and Fay.

- concessionarylendingandblendedfinanceforprojectsthatarenon-bankablehavebeenacceleratedthroughdevelopmentbanks,grantsfromothergovernmentsthatsupportedalsolesssolventcitiesininvestingingreenurbantransport;

- digitaltechnologyhasallowedtoinvestmoreefficiently,loweringtransactioncoststhroughbettermonitoringandallocationofresources(e.g.usingblockchaintechnology),allowingsmallerinvestorstopoolmoneyforinvestments.


28 29

Policy cooperation

Chinesestakeholders,BRIcitiesandinternationalstakeholdersworktogethertoachievetheEcologicalUrbanizationScenario.EuropeanstakeholdershaveshownaparticularinterestincontributingtothegreenurbanmobilityinBRIcitiesandhaveinvitedChinatojoineffortsbetweentheEU-AsiaConnectivityPlatformanditsBRIplatforms:

- theEuropeanUnionandnationalgovernments(e.g.AFD,GIZ)havesupportedcapacitybuildingforscience-basedimprovementsofgreenurbanmobilityplanning(e.g.SustainableUrbanTransportPlanning(SUTP)),trafficmanagement(e.g.parkingmanagement),publictransportalliances/transitalliances

- Europeanpublicinvestors(e.g.EIB,KfW)haveprovidedconcessionaryloanstoBRIcitiesandprovincialgovernments,basedonlocalknowledgeduetotheirlocalpresence.Theseloanshaveallowedthesegovernmentsto

Callout Box 1: PAYS – an innovative way to finance green mobility infrastructure48

�PayAsYouSave(PAYS®)isanexisting,provenfinancingapproachthathasbeenimplementedpreviouslybyutilitiestoincreaseinvestmentinarangeofclimate-relevantsolutions.PAYShasconsistentlyovercometheprimarybarrierstoinvestmentthatarenowfacingelectricbuses--highupfrontcostsandlimitedaccesstofinanceforcustomersunqualifiedorunwillingtotakeonmoredebtfornewequipment.InabasictransactionthatappliesPAYStocleantransport,thereareseveralkeystakeholders:

• Utility‒supplieselectricity;holdsdirectrelationshipwithbusserviceprovider;• Busserviceprovider(BSP)‒purchasesand/oroperatesbuses,oftenamunicipaltransitagency;• Electricbusmanufacturer‒sellsbuses,includingbatteries,andchargingequipment;• Capitalprovider(s)‒providesdebtfinancetotheutility,ifrequired.

eutilityandBSPinitiallyagreetoterms-of-servicethatallowtheutilitytopayfortheprimarycomponentsoftheincrementalupfrontcostsofelectricbuses‒namelybatteriesandchargingstations‒andrecoveritscostsovertimethroughatariffed,fixedchargeontheBSP’sregularmonthlyelectricbill‒thePAYSProgramServicescharge(“PAYScharge”).

ThePAYStariffisdesignedtoensurethat(1)theoperatingcostsofanelectricbuswillbelessthantheestimatedoperatingcostsofanequivalentdieselbus;and(2)theutilitywillfullyrecoveritsinvestmentcostwithinthewarrantiedperiodofthebatteryandchargingequipment,subjecttotherestrictionin(1).Theutilityisprotectedfromtechnologyriskbythemanufacturer’sequipmentwarranty,anditsinvestmentisbothcost-effectiveandsecure,withtheabilitytodisconnectserviceinthecaseofnon-payment.TheBSPisrequiredonlytoensureitpaysitselectricitybills,facingnoadditionalliability.

Oncethetariffisinplace,theutilitycanleverageexternaldebtlentagainstitsbalancesheettopayforthecostofelectricbusbatteriesandcharginginfrastructure.ThisallowstheBSPtoobtainnewelectricbusesfromamanufacturerdebt-freewithanoff-thebooksinvestment,payingroughlythesameupfrontcostasitwouldforequivalentdieselbuses.Iftheupfrontcostisstillhigherthandiesel,theremainingfractionofthegapismetwithgrantfundingfromtheconcessionalcapitalproviderorutilityincentives.Theutilityrecoversitsinvestmentcosts(includingitscostofcapital)fromtheBSPviathePAYSchargeonitsmonthlyelectricbills,andoncethosecostsarerecovered,theBSPgainsownershipofthebatteryandchargerassets.

48 Dario Abramskiehn and Alex Clark, “Pay as You Save for Clean Transport” (San Francisco, USA: Climate Policy Initiative, September 2018), https://www.climatefinancelab.org/wp-content/uploads/2018/02/PAYS-for-Clean-Transport_Instrument-Analysis.pdf.

investinpublicgoodsthatarenotinvestiblebyprivateinvestors

- EuropeanprivateinvestorshavebeensupportedtoinvestingreentechnologiesinBRIcities,byprovidingthempublicguaranteeswithstrictuseofproceedsandaccountabilityprovisions.

- TheEuropeanUniontogetherwithotherinternationalinstitutions(e.g.WorldBank)helpedtheBRItobecomeamultilateralstrategywithopenbiddingforcontractsandinternationalfinancing.

- ThisallowedEuropeanprivateenterprisestosupplytechnicalproductsandservicesalongsideChinesecompanies,allowingbothsidestocompeteonequalgrounds,shareexperiencesandlearning.

- CitiesalongtheBRIintensifytheirknowledgeexchangethroughexistingplatforms,suchastheC40,MEE’sGreenBeltandRoadCoalition.

Thinking outside the box for financePay-As-Yousave(PAYS)‒forelectrificationofbuses

Challenge• Sustainable

technologies(e.g.electricbuses)havehigh-upfront

• Returnsoninvestmentareonlyrealizedoverthelong-term

Advantages:• Acceleratesbusfleetelectrification• Unchangedcapitalexpenditure

vs.dieselbusesandimmediateoperationalsavings

• Noadditionalfinancialliability(unlikealoanorlease)onBSP’sbalancesheet

• Secureon-billpaymentwiththeabilitytotreatunpaidbillssimilarlytootherservices

• Leveragesastrongerbalancesheetandaccesstoaffordablecapital

• Achievescostrecoveryfordeployedcapitalwithinwarrantyperiodofequipment

• SignificantadditionalrevenuefromelectricitysalestoBSPsasaresultofPAYS

• Accesstoamorecreditworthycounterparty

• Benefitsfromimprovedallocationoftechnology

• Gainsexposuretoanimportantgrowthindustry(EVsandcharginginfrastructure)

• Increasedproductsalesinthenewmarkets

• Experienceandexpertiseinthenewmarket

Capital provider

Electric BusManufacturer

Bus Service Provider

Purchasebuswithbatteryservicefromutility

Utility

Investsinbatteriesandcharges,recoversviaon-billPAYStariff

Purchasebatteryandcharginginfrastructure

Supplybattery,busandcharging

infrastructure

Purchasebus

Repaymentovertime

PAYStariffovertime

Loan


30 31

5.2 Scenario 2: Development at Different Speeds

Rationale and description

Chinaadherestotheprincipleofnon-interferenceinothercountries(alsoreferredtoas“hostcountryprinciple”),includingtheBRIcountries.BRIcountriescanthereforedecidewhatinvestmentsinurbantransportworkbestforthem.Chineseinvestorsandlocalgovernmentsbelievethistobeawin-winsituationthatallowsforlocalinfrastructuredevelopmentwhilebringingeconomicopportunitiesforbothlocalmunicipalitiesandChinesecompanies.Thatleadstoadevelopmentatdifferentspeeds:WhilesomeBRIcityofficialsandurbanplannersareseeingbenefitsininvestinginpublictransportationandothergreentransport,otherBRIcityofficialshavetakenonthemotto“developmentfirst,cleanuplater”,whichincludesthepursuitofthedevelopmentoftheindividualcarindustryandquickinfrastructuredevelopmentgainsthroughbuildingroadinfrastructure.

WhileWesterninvestors,particularlypolicybanksanddevelopmentorganizations,supportBRIcitiesindevelopingmoreenvironmentallyfriendlyurbantransportandstoppedfinancingbrownurbantransportinfrastructureinadherencetoglobalclimateandbiodiversitytreaties(e.g.ParisAccord),Chineseinvestorsanddeveloperscontinuetobetechnologyagnostic,supportingbothgreenurbantransportandbrownurbantransportdependingonlocalpreferences.Therefore,cash-strappedmunicipalitiesarelookingtoChineseinvestorstosupporttheirmuch-neededinvestmentsinurbantransportandhopetoacceleratelocaleconomicdevelopmentandconstructionbusinessthroughreadilyavailableandrapidlyconstructableroadinfrastructure.


BasedontheChinesemodelofnon-interferenceandimpartiality,Chineseinvestorsandcompaniesaresupportingnationalgovernmentsandmunicipalitiesinfulfillingtheirlocalideasofurbanmobility.

CitiesalongtheBeltandRoadInitiativewithinfrastructureinvestmentswithChineseparticipationand/ortechnologywillseeanaccelerationofurbanmobilityinfrastructure‒howeverwithdifferentoutcomesdependingonthecity’sspecificpreferences:


- Ownershipofprivatecarswithinternalcombustionengine(e.g.gasoline)isincreasing

- Carsprovidethemostimportantmeansoftransportformanycit-iesalongtheBRI;

- Electriccarsaremostlynotfeasi-bleduetoalackofcoordinatedcharginginfrastructureconstruc-tionandcheapoperatingcostsofconventionalvehicles;

- Somecitiesseeanimprovementofpublictransport(e.g.dieselbuses)tosupportmoremigrantworkerstoworkinthecities;

- Moreenvironmentallyambitiouscitiesorthosecitieswithstronginputfrominternationalorgani-zationsexperiencetheestablish-mentoffewelectricbuseslines;

- Non-motorizedtransportation,suchasbikingandwalking,isconfinedtoselectedareasoftour-isticrelevance.

- Modalsharesare49:o Walking:1%o Biking:2%o Publictransport:55%o Car:30%o Othermotorized:12%

- Severallogisticsoperatorswillutilizeelectricvehiclesforurbandeliveries,particularlyincoun-trieswithcheapelectricity,usingprivatecharginginfrastructureinstalledbythelogisticscompa-nies;

- Duetoalackofacity-widecoor-dinatedcharginginfrastructure,abroaderapplicationofelectriclogisticsvehiclesisonlyinplan-ning;

- Severallogisticscompaniesareadaptatusingbigdataforbetterrouteoptimizationforurbande-liveries,whileapublicplatformtobetterpoolandcoordinatedeliv-eriesismissing(leadingtomoreemptyruns,multiplesuppliersdeliveringatthesametimetothesameaddressetc.);

- Appsallowprivatecitizenstosup-portdeliveryofpackages,leadingtoemploymentwithlittlelogisticsefficiency.

- Privatecarownershipandopera-tionissupportedbynationalpol-icies,e.g.fuelsubsidies,lowtaxesandnew-carsubsidies;

- Roadnetworkisgrownasasignfordevelopmentandpublicin-vestment;

- Parkingspotsareincreasedtoaccommodatemorevehiclesattheexpenseofgreenspaceandnon-motorizedtransport.

Table 4: DevelopmentatDifferentSpeedsin2033

49 Based on: Wagner, “The Billion Dollar Question - How Much Will It Cost to Decarbonise Cities’ Transport Systems.”


32 33


TheDevelopmentatDifferentSpeedsscenariohasbeenenabledbyadiversifiedgovernanceapproachthatsupportedshort-termprogress:

- Localgovernmentsandoperators,dependingontheirfinancialstrengths,urgencyofneedformobilitygrowth,understandingofthesustainabilityissueofurbanmobility,havedemandedverydifferentsupportandinvestmentsfrominternationalpartners‒frompureinvestmentininfrastructuretocapacitybuildingtosupportinoperations.

- Manylocalgovernments‒inordertospeedupeconomicdevelopment‒continuetopromotetheuseofgasolineandotherfossilfuelsformobility,e.g.throughtaxbreaks,subsidiesetc.

- Chinesestakeholders(e.g.investors,companies,governmentagencies)strictlyadheredtothehostcountryprincipleandworkcloselywithlocalgovernmentstoprovidethefinancingandtechnologyfortheirdesiredmodeoftransportation,withthegoaltoallowalltypesofChinesecompaniestoprofitfromthedifferentneedsofmobility.

- Internationalorganizations,suchastheWorldBank,theEuropeanInvestmentBank,GIZsupportedfewselectedlocalcitiesalongtheBRItoincorporatebestpracticesofurbanmobilityplanning.

- Duetoalackoflong-termplanningandlittlestakeholderintegration(duetoacloserelationshipwiththelocalgovernmentsthatareonlyinofficeforfewyears),manyinvestmentsinBRIcities’mobilityrequiredre-planning,makingeachinvestmentoftenlessefficientinitsutilityversusinvestment.


TheDevelopmentatDifferentSpeedsScenarioallowsforamultitudeoftechnologiestosucceed:

- conventionalinternalcombustionengines(ICVs)usingdieselorgasolinecontinuetobethepreferredmodeofpropulsionforbothpassengerandlogisticsvehiclesduetotheirhighreliability,lowacquisitioncostandcheapoperations(duetolowtaxesonfuel).

- Electricpassengermobilitywilldevelopmostlyintherichercitiesthatwanttobeseenasfront-runnersandinnovators.

- Electricurbanlogisticsmobilitywilldevelopquickerandspreadfurtherbecausea)logisticscompaniesaremorefinanciallysavvycalculatinglife-cyclecost;b)theyaremoreglobalinoperationandcanuseeconomiesofscaleinacquisitionandoperationthatdrivedowncostofelectricmobility.

- Bigdataandsensortechnologywillspreadfurther,withdataprocessingandartificialintelligencemostlyinthebigdatacentersintheinvestorcountries.


- Theannualinvestmentneedforurbaninfrastructureinvestmentinlowandmiddle-incomecountriesinthe“DevelopmentatDifferentSpeeds”scenarioisexpectedtobeabout250billionUSD,orabout0.5%ofeachcountries’annualGDP.Thehighercostaredrivenbylackingintegratedplanningandstandards‒aswellaslong-termconsequencesofquick,non-integratedandlow-qualityinvestments.

- CitiesalongtheBRIneedinvestmentstofinancetheirgrowthofurbanmobilityinthe

DevelopmentatDifferentSpeedsscenario.Thefinancingisdonethroughdifferentmodes,alsodependingonthelocalcapacitiesandtransportstrategiesofthecity:

- BRIcitieswithChineseinfrastructuredevelopersgetfunding‒closetomarketrates‒throughChinesemostlystate-linkedcommercialinvestors(e.g.ICBC,AgriculturalBankofChina).

- BRIcitiesraisetheirownfundsthroughissuinggovernmentormunicipalbonds.

- Internationalfinancialinstitutionsareprovidingconcessionalloansforselectedgreenurbantransportprojects(e.g.financingforaBRT)

- Internationaldonorsprovidegrantsforcapacitybuildinginurbantransportplanningandoperationtofewselectedcities

Policy cooperation

Chinesestakeholders,BRIcitiesandinternationalstakeholderslooselycooperateinagreeingongeneralinvestmentsandurbanmobilitydevelopmentstrategies.BRIplatformsandtheEU-AsiaConnectivityPlatformhavesomeoverlapsandjointconferences,butstrategicplanningandimplementationhappensindependently.BRIcitieshavebecomesmartinplayingthedifferentEuropean(conditionality)andChinese(non-interference)approachesagainsteachother,hopingtogetmoremoney:

- ChinesestakeholdersareinclosecooperationwithlocalcitygovernmentsindevelopingstrategiesandsigningMemorandaofUnderstandingtointensifyexchangeandeconomiccooperation.

- ChineseinvestorsaremostlyworkingwithChinesecompaniesandfewlocalcompaniestobuildandpartlyoperatetransportservicesinBRIcities.

- Westernstakeholdersarepushingforsustainabledevelopmentthatislow-carbon,howevercanonlysupportfewcitiesinprovidingfinancetobuildthislow-carbonurbantransportinfrastructure.

- ChineseandWesternstakeholdersaremeetingregularlyandagreethattransportdevelopmentneedstoaccelerateinasustainablemanner.However,theunderstandingoftheprioritiesofsustainabledevelopmentisaconstantsourceofdebate.

5.3 Scenario 3: Global slowdown

Rationale and Description

China’sBRIinvestmentshavebeenslowingdown,causedbycontinuedglobaltradedisintegrationandotherpoliticalfactors,suchasdifferingpoliticalinterests,bigpowercompetitionandalliancebuildingoftheworld’ssuperpowersalongtheBRI(China,USA,Russia,India,EuropeanUnion).Withlessmoneytoinvest,onlyselectedBRIinfrastructureprojectsarebeingmaintained(e.g.inPakistan),whileotherslackfinancialresourcesformaintenanceandoperation.Thishasnotonlyledtodifferingandsometimesincompatibletechnologicalstandardsduetothebi-oreventrifurcationoftheinternetandotherinnovativetechnologies.IthasalsoledtodisappointmentsoverperceivedbrokenpromisesintheBRIcountriesandevenbetweenBRIregions(e.g.withcountriesblamingeachotherforfailurestoprovidefundingforinternationalconnectivity).Thisisaccompaniedbyacontinuedawakeningofnationalstrengthandnationalself-esteemmovements.

Smartinvestorsstillsee,however,opportunities,tosupporttransportrelatedinfrastructureinBRIcities,particularlyinimproveddatacollectionforbettertrafficmanagementandtrafficsafety.


34 35


WithlittlemoneytospareanddifferentsuperpowersinvestingstrategicallyindifferentBRIcitiesandcountries,urbantransportwilldevelopatunequalspeeds,withdifferentstandardsandwithshort-termtransportefficiencyimprovements.WhileChineseBRI

citieswillpartlycontinuetobeatechnologicalleaderintheapplicationofsmartandgreenmobilitytechnology,onlyfewnon-ChineseBRIcitieswillexperiencethedesiredinflowoftransportinvestmentsfocusedmainlyonshowcasingpossibilitiesthrough“pilots”,butwithoutadeepenoughpockettodriveholisticchange.


- Privatecarswithinternalcom-bustionengine(e.g.gasoline)providethemostimportantmeansoftransportformanycitiesalongtheBRI;

- howeverprivatecarownershipisnotnecessarilyincreasingandthemarketforsecondhandcarsisthriving;

- scootersareapreferredmodeoftransportation;

- Publictransportthroughlargerbusesandsmallerbusespro-videsflexibleandnotcentrallycoordinatedmeansoftransportfortheworkingclasspeople;

- Moreenvironmentallyambitiouscitiesorthosecitieswithstronginputfrominternationalorgani-zationsexperiencedtheestab-lishmentofsomeelectricbuseslines,whichcouldhowevernotbeproperlymaintained;

- Non-motorizedtransportation,suchasbikingandwalking,iscon-finedtoselectedareasoftouristicrelevanceinselectedcities.

- Modalsharesare50:o Walk:1%o Bike:2%o Publictransport:40%o Car:40%o Othermotorized:17%

- Severallogisticsoperatorswillutilizeelectricvehiclesforurbandeliveries,particularlyincoun-trieswithcheapelectricityusingprivatecharginginfrastructureofthecompanies;

- Duetoalackofacity-widecoor-dinatedcharginginfrastructure,abroaderapplicationofelectriclogisticsvehiclesisonlyinplan-ning;

- Severallogisticscompaniesareadaptatusingbigdataforbetterrouteoptimizationforurbande-liveries,whileapublicplatformtobetterpoolandcoordinatedeliveriesismissing(leadingtomoreemptyruns,multiplesup-pliersdeliveringatthesametimetothesameaddressetc.);

- Appsforprivatecitizenstodeliv-erpackagesaresprawling,allow-ingindividualstoearnmoney,increasingtraffic(particularlywithsmallmotorbikes).

- Privatecarownershipandoper-ationissupportedbynationalpolicies,e.g.fuelsubsidies,lowtaxesandnew-carsubsidies;

- Roadnetworkispartlygrownasasignfordevelopment,howevermaintenanceisspotty;

- Policiesareuncoordinatedbe-tweendifferentdepartments(e.g.landuse,publictransport,urbanmobilityplanning,environmen-taldepartments)duetolackoftrainingandcapacitybuilding.

50 Based on: Wagner.


TheGlobalSlowdownscenariohasbeenenabledbypoliticalcompetition,lackofinvestmentsandlackofcoordinationamongnationalandinternationalpartners:

- Majorcountriesandblocksagreedtocooperateonlyinpartsofglobaltradeintegrationandglobalstandards,whileotherissues(e.g.hightechnology,securityrelatedtechnology)wereconsideredofnationalsecurityinterestsandthusproductsandservicesintheseareaswerebannedfromimportandexport.

- Environmentallawsandregulationswererelevantforsomecountries(e.g.somecountriesoftheEU,China),butnotmoreimportantthansocialharmonythrougheconomicdevelopmentinanycountries.

- Slowingtradeincreasednationalresolvefortechnologicalindependence,butloweredpoliticalandfinancialpossibilitiesfor(green)investmentsinothercountriesandcities

- CountriesalongtheBRIwereoftenforcedtochoosesidesbetweenthedominatingsuperpowersandtheirtechnologicalstandards.


TheGlobalSlowdownscenarioallowsforamultitudeoftechnologiestosucceed:

- conventionalinternalcombustionengines(ICVs)usingdieselorgasolinecontinuetobethepreferredmodeofpropulsionforbothpassengerandlogisticsvehiclesduetotheirhighreliability,lowacquisitionpriceandcheapoperations(duetolowtaxesonfuel).

- Electricpassengermobilitywilldevelopmostlyintherichercitiesthatwanttobeseenasfront-runnersandinnovators.

- Electricurbanlogisticsmobilitywillcontinuetodevelopbecausea)logisticscompaniesaremorefinanciallysavvytakinginthefullcosts;b)theyaremoreglobalinoperationandcanuseeconomiesofscaleinacquisitionandoperationthatdrivedowncostofelectricmobility

- Bigdataanalyseswillcontinuetospread,particularlyfortrafficsafetyandsecurity,howeverwithnationallawsslowingquickerapplicationofbigdataandAIanddifferentglobalstandardsregardingtheapplicationanduseofbigdata.


Theannualinvestmentinurbantransportofthe“GlobalSlowdown”scenarioaremostlikelylowerthaninthe“DevelopmentatdifferentSpeeds”scenario(thus,lessthanUSD250billionperyearinalllow-andmiddle-incomecountries),howeverwithlessfavorablyoutcomesintermsofurbanmobilityefficiencyandquality.

CitiesalongtheBRIseeselectedinvestmentstofinanceurbanmobilityfromdifferentsourcesintheGlobalSlowdownscenario:

- BRIcitiesmostlyrelyonnationalfundingandsomemunicipalbonds.Howeverbondissuanceofmunicipalitiesislimitedduetohighriskandlittleaccesstointernationalcapitalmarkets.

- Fewcitiesinstrategiclocationsexperienceinflowofgrantsfrominternationalsourcesforurbantransport.

- DevelopmentBanks(e.g.WorldBank,CDB,KfW)continuetosupporturbantransportpilotsinselectedareas.


36 37

Thenecessaryinvestmentforthedifferentscenariosandtheinvestmentinstrumentswillalsovaryaccordingtothescenario.TheWorldBankestimatedtheannualinvestmentneedsinroadsandpublictransportinlow-andmiddleincomecountries(whichincludemanyofthoseintheBRI)ataroundUSD180billiontoUSD250billion.Whatisstrikingisthatthelowestinvestmentsumisneededwithstrongplanningandimplementationcapacitythatalsoallowsforlow-carbonandefficienturbantransport.Atthesametime,differentregionshavedifferentexistingurbaninfrastructurewiththeirowncharacteristics.Thus,thecostofurbaninfrastructureinvestmentsintheseareasisvarying,ascanbeseeninFigure16.

Policy cooperation

Chinesestakeholders,BRIcitiesandinternationalstakeholdersintheGlobalSlowdownscenariocompetetocooperatewithselectedcitiesandcountriesalongtheBRI.

- Chinesegovernmentandstate-ownedenterprisesworkcloselywithselectedstrategiclocalcitygovernmentsindevelopingstrategiesandsigningMemorandaofUnderstandingtointensifyexchange,economiccooperationanddataexchange.

- Chineseprivateinvestorsaremostlyabsentinurbanmobilitydevelopment.

- Westerngovernmentsareworkingwithselectedstrategiccitiesandnationalgovernmentsandsupporturbanmobilitydevelopment,particularlyinEasternandCentralEurope.

- ChineseandWesternstakeholdersaremeetingregularlytodiscussparticularlymattersoftradeandcooperationandemphasizethatenvironmentalprotectionshouldbeanimportantconsiderationforfuturework.

5.4 Summary and analysis of scenarios

Thethreescenarios“EcologicalUrbanCivilization”,“DevelopmentatDifferentSpeeds”and“GlobalSlowdown”illustratepossiblepathwaysofdevelopmentforurbanmobility.However,asmentionedabove,thesescenariosarenottobeseenaspredictions.

Whilethetechnologicaldevelopmentinurbanmobilitywillallowmanydevelopedcitiestoprofitfromamoregreenurbandevelopment,theavailabilityofthesetechnologiesinBRIcitiesdependonthefinancialstrengthanddepthofinternationalcooperationoftheinvolvedstakeholders,suchaslocalgovernments,internationalgovernments,supranationalinstitutions(e.g.WTO),financialinstitutionsincludingdevelopmentbanks(suchasWorldBank,AIIB,CDB)andprivateinvestors,aswellasenterprisesandthecivilsocieties.

Accordingly,peopleincitieswillusedifferentmodesoftransport‒fromamoreecologicalmixinscenario1toalessecologicalmixinscenario3(seeFigure14).

Figure 14: Modalsharesofurbantransportindifferentscenarios51

51 Based on: Rozenberg and Fay, Beyond the Gap.

52 Based on: Wagner, “The Billion Dollar Ques-tion - How Much Will It Cost to Decarbonise Cities’ Transport Systems.”

53 Based on: Rozenberg and Fay, Beyond the Gap.

Themodeoftransportwillhavestronginfluenceonthedifferentemissionmitigationpotentials.Nexttothescenario,theexpectedemissionmitigationpotentialsaredependingonthedevelopmentstageofthecityitself.BRIcitieswithlowerincomeswillhavelessmitigationpotentials(astheyarepollutinglessatthistimeduetolesstransport),whilehigherincomeBRIcitieshaveahigheremissionssavingpotential(seeFigure15)

Figure 15:Emissionmitigationpotentialsof“EcologicalUrbanCivilization”and“DevelopmentatDifferentSpeeds”scenarios52

Figure 16:Averageannualcostofinvestmentinurbantransport2015-3053

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38 39

Overaperiodof35yearsfrom2015to2050,BRIcitieswillhavetoinvestaround5%oftheirGDPinupper-middleincomeBRIcountries,between3.5%and4%inlower-middleincomecountriesandbetween6%and8%inlower-incomecountries.Investmentinpublictransportoperationwillbeparticularlyhigh,accountingforabout40%to90%ofurbantransportinvestment,dependingwhichpathwaycitieschoose(seeFigure17).

Figure 17: Completetransportcostbetween2015and20504654

ForBRIcitiestobeabletofinancetheurbantransportinfrastructureandoperation,theywillhavetoemployallavailablefinanceinstruments‒fromcollectingfees(forpublictransport),raisingmunicipal(green)bonds,tax-basedfunding(e.g.throughpropertytaxes,nationalgovernmenttransfers),internationalgrants,concessionaryloansfromdevelopmentbanks,loansfromotherinvestors,equityinvestments(e.g.informsofprivate-publicpartnerships)orotherinnovativeformsoffinancing(e.g.blendedfinance).

54　Based on: Wagner, “The Billion Dollar Question - How Much Will It Cost to Decarbonise Cities’ Transport Systems.”

Overall,fromaninput(investmentneed)andoutput(transportefficiency,emissions)perspective,theEcologicalCivilizationscenarioisthemostdesirablescenario.Therefore,thepolicyrecommendationswillfocusonsupportingthepathwaytowardsthisscenario.

CreatinggreenurbantransportinBRIcitiesisaparamountchallenge.ChinaandEuropecanworktogethertoenableandaccelerateadevelopmentthatissupportingBRIcitiestoleapfrogfrombrownmobilitytogreenmobility.TheBRIshouldbeusedasanopportunitytostrengthencooperationbetweenChinaandEuropealongthesharedgoals,towhichprotectingtheenvironmentandtheclimatecount.

ChinahasreachedouttomanyEuropeancountriesandtheEuropeanUniontostrengthencooperationalongtheBeltandRoadInitiative.TheEuropeanUnionhasagreedto“forgesynergiesbetweenChina’sBeltandRoadInitiativeandtheEUstrategyonConnectingEuropeandAsia,aswellastheEUTrans-EuropeanTransportNetworks”intheirjoinstatementaftertheApril2019ChinaEUSummit.

ThefollowingpolicyrecommendationsshouldhelpimprovethecooperationbetweenChina,theBRIcountriesandEuropeancountries/theEuropeanUnioninsupportinggreenurbantransportinBRIcities.Thefocusoftherecommendationsisonenvironmentalfactors,andspecificallydon’tincluderecommendationsoranalysesregardingsocial,legalorotherissues(suchasdataprotection,datasecurity,geopolitics).Inthisrecommendations,itisalsoimportantthateachregion,country,andcityhavetheirowngoalsandstrengthsandthereforeeachshouldcontinuetousetheiruniquecapabilities.

Againstthebackdropofprovidingurbantransportthatcontributestoeconomicdevelopment,allowsforpeopleandgoodstomovesafely,reliably,inclusively,low-carbon,affordablyandefficiently,thefollowingareasofcooperationshouldbeconsideredandstrengthened:55

6 Policy recommendations for China and Europe

- politicalandcapacitybuildingcooperation

- technologicalcooperation

- financingcooperation

6.1 Political and capacity building cooperation

Buildinggreenurbantransportrequiresstrongcapacityintermsofplanning,building,operation,maintenanceandfinancingcapacities.Citieswiththerightcapacitieswillsaveabout20-30%oftheinvestmentcostsofurbantransportinfrastructure,whileachievingbetterresultsintermsofenvironmentalprotectionandmobilityefficiency.

ChinaandEuropeancountriesshouldthereforesupportBRIcitieswiththeirspecificexperiencesandsupportcapacitybuildinginBRIcities,forexample:

- urbanmobilityandurbancityplannersintermsofsustainableurbanmobilityplanningthate.g.reducesspaceuseandtraveldistancesthroughzoning,protectsecosystems,increasestransportefficiency,

- urbanfinancialauthoritiesintermsofsettingincentivesforgreentransport(e.g.taxes,subsidies,phasing outofcounter-productivesubsidies),

- publictransportoperatorsintermsoftransitalliances,operationandmaintenanceofelectricbuses,

- urbandeliveryandlogisticsprovidersintermsofapplicationofbigdataforrouteoptimization,

- policymakersintermsofsettingpolicyandlegalframeworkse.g.forsharedmobilityforpassengerandfreight,

- mobilityresearchersinregardstolifecycleanalyses,environmentalassessments,

55 See also: World Bank, “Belt and Road Economics - Opportunities and Risks of Transport Corridors” (Washington, D.C.: World Bank Group, June 2019), https://openknowledge.worldbank.org/bitstream/han-dle/10986/31878/9781464813924.pdf.

Elizabeth Losos et al., “Reducing Environmental Risks from Belt and Road Initiative Investments in Transportation Infrastruc-ture,” Policy Research Working Paper (Washington: World Bank Group, January 2019), http://documents.worldbank.org/curated/en/700631548446492003/pdf/WPS8718.pdf.

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40 41

- constructioncompaniesintermsofefficientandenvironmentalassessmentsoftheirmaterials,processesandplans(e.g.tominimizelossofbiodiversityalongtheconstructionpaths,protectwatersources,haveadaptationmeasuresforclimatechangeincluded),

- urbanauthorities,e.g.intermsoftheirtechnicalcapabilitiesofenvironmentalimpactassessment,aswellasofmeasuring,evaluationandreporting(MRV)(e.g.localemissionmeasurements,standardizedreportingforimprovementsandcomparability).

Toimprovegreenurbanmobility,thecooperationandexchangebetweencitiesshouldbestrengthened,possiblywithinexistingframeworks(suchasC40,GreenBeltandRoadCoalition).Citiesshouldalsoengageinpartner-cityexchangestolearnfromeachother.Thisrequiresidentifyingcitiesthataresuitabletocooperateandlearnfromeachother.Thismeansthatcitiesshouldhavetosomeextentsimilarfeatures(e.g.asmallGermantownwouldnotbeabletosupportaChinesemega-cityintermsofpublictransportplanningoroperation,whilethesamecitymightbehelpfulforasimilarsizedcityalongtheBRI).

Political and capacity building recommendation

1. Politicalcooperationshouldbestrengthenedbetweenallinvolvedstakeholderstoensureacommonunderstanding,goalsandprocessesforsustainableurbanmobilitydevelopment.

2. Capacitybuildingshouldbestrengthenedatalllevelstoensureefficientevaluationofprojects,efficientuseoffundsandsoundmonitoringofprojects.

3. Partnercitynetworksshouldbestrengthenedthatsupportexchangeof(positiveandnegative)experiencesamongsimilarlystructurecities.

Technical cooperation recommendation

1 Technicalstandardizationshouldhaveprioritytoallowforcompatibility,continuousmaintenanceandexchangeabilityofappliedtechnologies

2 Technologicaldevelopmentandapplicationshouldadheretogreenstandardsandshow“greenness”ofproductforeasyevaluation

6.2 Standards and technical cooperation

Companiesinthemobilityspacearequicklydevelopingnewtechnologiestoimproveefficiency,comfort,safetyetc.offreightandpassengertransportation.TheCASEmobilityrevolution(describedabove)hasthepotentialtochangethewaypeopleandgoodsmovewithinafewyears,howeverwithdifferentspeedsanddifferentresultsfordifferentcitiesandcountries.

Inorderforcountriestobeabletocatchup‒bothintermsoftheirowndevelopmentpotentials,andequallyimportantlyintheirpossibilitytoapplythesetechnologiesmostefficiently,mobilitycompaniesandpolicymakersshouldcooperateindevelopingcommontechnicalstandards.

Standardsarecrucialfortheinteroperabilityandinterchangeabilityofdifferentsystems.Standardsensurethatnomatterthesupplier,thesystemsandservicescana)communicatewitheachother,b)canbereplacedbeyondthelife-timeofasingleproviderandc)createcompetitionthatspursinnovationandkeepspriceslower.

Indeed,inthepast,“theracefortransportinnovation”,whichisatleastacenturyold,hasalreadyresultedinincompatibletechnologies,suchasdifferenttrainsystems,differentstandardsforroadsafetyandroadstandardsandevendifferentdirectionofdrivingbetweenmanyAnglo-Saxoncountriesandmostothercountries.Thislackofstandardscarriestheriskforcitiestobelocked-inaspecifictechnology(e.g.achargingtechnology),whichmightatsomepointbecomeinefficient‒inthe“better”case,orabandonedduetobankruptcyofthesupplier‒intheworstcase.Switchingthetechnologywouldthusrequireanexpensivenewset-upofthesystem.

Therefore,whilefaircompetitionbetweeninnovativecompaniesshouldbeengaged,technologicalandprocessstandardsofnewmobilitytechnologiesareaprerequisitefortheseamlessintegrationofdifferent

technologiesandtheabilitytochangebetweensuppliersofmobilitytechnologies.Thesestandardsshouldincludeenvironmentalevaluationthatallowcitiestocomparethe“greenness”ofthetransporttechnology.

6.3 Financial cooperation

InvestmentneedsforBRIcitiestoprovidegreenurbantransportationareimmense‒upto8%ofacity’sGDPin25years.Therefore,financialcooperationshouldallowBRIcitiesa)tofinancetheirtransportneeds,andb)toensurethesustainabilityoftheproject.

Cooperationofdifferenttypesoffinancialinstitutions‒fromprivateinvestorstopublicinvestorsandevenfoundationsthatprovidegrants,allowsBRIcitiestofinancedifferentkindsofprojects,e.g.

- high-risk-high-returnprojects(e.g.newtechnologiesorservicesthathavethepotentialtoreaphighbenefits,suchassharedmobility)throughprivateequityinvestors,

- low-risk-medium-returnprojects(e.g.provisionofparkingmanagement,electriccharginginfrastructure)throughbankloans,equityfinanceormunicipalbonds,

- low-risk-low-returnprojects(e.g.publictransportation)throughmunicipalbondsorblendedfinancetogetherwithdevelopmentbanks

- negativereturnprojects(e.g.bicyclelanes,pedestrianzones,publictransportation)throughgrants,taxes.

Inordertoensurethatinvestmentsinurbantransportadheretosustainabilitystandards,acooperationwithmultilateraldevelopmentbanks(suchastheAIIB,theWorldBank,theIFC,theAsianDevelopmentBank),manywesternbilateraldevelopmentbanks(suchastheKfW,theAFD)ormanyprivateWesternbanksrequirestheapplicationofinternationalstandards,suchastheEquatorPrinciples56thatprovideanadvancedframeworkforsustainableinvestment.Similarly,manyChineseandsomeinternationalbankshavesignedtheGreenInvestmentPrinciples,whichalsoprovidesomeformofguidelines,howeveratthispointatalowerdegreethantheEquatorPrinciples.Therefore,projectsinvestmentswithparticipationofWesternbankswillhavetoshowanadherencetothesebanks’higherstandardsofsustainability.

Financial cooperation recommendation

1 Internationalfinancialinstitutionsshouldcooperatetoprovidethenecessaryfunding‒dependingontheirspecificriskprofilesandstrategies.

2 BRIcitiesshouldrequireco-investmentsfrombanksthatrequirehighlevelsofsafeguardstoensuresustainabilityoftheproject(whileatthesametimeensuringaslittlebureaucracyaspossiblethroughbetterprojectandfinancialplanning,seeabove).

56 “Equator Principles,” 2013.


42 43

AgreendevelopmentofurbantransportationinBRIcountriesisallbutcertain,yetitispossiblethankstotechnologicaldevelopments.WhileChinaandEuropehaveagreedtoworktogetherforsustainableandgreendevelopment,e.g.withintheParisAgreement,competingtechnologicalandeconomicinterestsofindustrialstakeholderspairedwithalackofcapacityinBRIcitiesandlackoffinanceforcapacitybuildinghasthepotentialtoleadtounsustainableanduncoordinatedtransportdevelopmentinBRIcities.

InordertofindcoordinationandcooperationmechanismsforChineseandEuropeanplayersaswellasBRIcities,allsidesneedtobeawareofthedynamicsanddifferentinterestsatplay.

ChinesestakeholdersincludingtheChinesegovernmentministrieshavesetupcoordinationmechanismstodiscussfinanceanddevelopmentgovernanceamongBRIcountries,investorsandcities(e.g.BRIInternationalGreenDevelopmentCoalition,BRIGreenInvestmentPrinciples).ThesecoordinationmechanismscurrentlyoftenexistinparalleltoexistingWestern-driveninstitutionsforsustainabledevelopmentandsustainableurbanization(e.g.EquatorPrinciplesforInvestment,C40cityalliance).Atthesametime,Chinese(andEuropean)companiesareacceleratinginnovationinmobility(e.g.Chinesemobilitycompaniesbecominginnovationleadersinelectricmobility(e.g.BYD)andsharedmobility(e.g.Didi))whilebothfightfordominanceinautonomousmobility.WithsupportfromChinesepolicybanksandfinancialinstitutions(e.g.CDB,ChinaEximBank,ICBC),ChinesecompanieshavethepotentialtoaccelerateexportofthesetechnologiestoBRIcities‒oftenwith“nostringsattached”tosafeguardthehost-countryprinciple.

EuropeanstakeholdersfromdifferentEuropeangovernmentsandtheirministrieshavestrategiesthattarenotalwaysalignedonthenationalandEuropeanlevels:Whilemostdevelopmentinstitutionspushforsustainableurbantransportdevelopmentthatcomeswithconditionalityforthehostcountriesandhost

7 Summary and Outlook 8 Bibliography

cities,manyinvestmentanddevelopmentinstitutions(e.g.theGermanKfW,theFrenchAFD)mightalsohavetofulfillspecificnationalmandates.Atthesametime,Europeaninstitutions(e.g.EIBorEBRD),investwithinEuropeanstrategiesandEuropeanprivatecompaniesareinterestedinfindingnewmarketsfortheirproducts.ThismakescooperationwithEuropeanstakeholdersforBRIcountriesoftenmorechallengingandslowerthanwithChinesecounterparts.Newframeworks,suchastheEU-AsiaConnectivityPlatform,shouldprovideforbettercoordinationmechanisms(withbotharegionalandabilateralapproach)betweentheEUandBRIcountriesandcities.

RegardingthecooperationbetweenEuropeanandChinesestakeholdersforgreenurbantransportinBRIcities,moretrustthatgoesbeyondatransactionalrelationshipneedstobebuilt.Thistrustneedstoweatherdynamicandchallengingsettings,suchasthefastdevelopmentoftransporttechnologypairedwiththeurgentneedtoreduceemissionsfromurbantransport.Inpractice,thismeansthatChineseandEuropeanstakeholdersshouldfocusontheinterestsofBRIcitiestocontributeandprofitfromthedevelopmentpotentialsinurbantransportandensurethesustainabilitythereof.ChinaandEuropemuststrivetoworktogethermorecloselyonthepolitical,financialandtechnologicallevelswhileensuringthatBRIcountriesandcitiesarefullyintegratedintothedecision-makingprocesses.Thiswillallowforthestrengthsandneedsofthedifferentregionstobebetterutilizedandunderstood:Chinesecurrentexperiencesinrelativelycheapandfastinfrastructureconstruction,accesstofinanceand“relatability”forlocalBRIgovernmentsas“brothersinnon-developedcountries”;Europeanstrengthsinplanning,qualitystandards,stakeholderintegrationandgovernance;localexpertiseintransportrequirementsandfailedpreviousattemptsofinvestments.Forthis,existingframeworksofcooperationmustbestrengthenedandexpanded(e.g.Euro-ChinaEco-CityLink),parallelframeworksharmonized(e.g.EU-AsiaConnectivityPlatform,BRIplatforms),andthirdcountrycooperationwithintheBRIandEUframeworksaccelerated.

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Cheah,Lynette,HassanWaqas,MehdiZahraei,YutingHou,CorinneOng,Kurniawan,Jude,TinaKambil,andChristopherChoo.“OntheMovein2040-AForesightStudyonUrbanMobilityinSingapore.”Singapore:SingaporeUniversityofTechnologyandDesign,2016.https://mobility.sutd.edu.sg/foresight/download/.

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Crow,Allison,DaveMullaney,YunningLIu,andZheWang.“ANewEVHorizon-InsightsfromShenzhen’sPathtoGlobalLeadershipinElectricLogisticsVehicles.”RockyMountainInstitute,June2019.https://rmi.org/insight/a-new-ev-horizon.

Derek,Scissors.“ChinaGlobalInvestmentTracker2018.”ChinaGlobalInvestmentTracker.Washington:AmericanEnterpriseInstitute,January2019.http://www.aei.org/china-global-investment-tracker/.

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TheEurope-ChinaEcoCitiesLink(EC-Link)ProjectisfundedbytheEuropeanUnionincooperationwiththeMinistryofHousingandUrban-RuralDevelopment(MoHURD)ImplementedbytheEuropeanConsortiumledbyGIZ

中欧低碳生态城市合作项目由欧盟资助与住房与城乡建设部合作德国国际合作机构等提供技术支持

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