Destination Sustainability Reducing Greenhouse Gas Emissions From Freight

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CEC DESTINATION SUSTAINABILITYCommission for Environmental Cooperation

DESTINATION SUSTAINABILITYREDUCING GREENHOUSE GAS EMISSIONS FROM

FREIGHT TRANSPORTATION IN NORTH AMERICA


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Acknowledgements

The Secretariat of the Commission for Environmental Cooperation (CEC) extends its appreciation to all of the participantsin our consultation process (see Appendices for lists of participants), and particularly to members of our Advisory Groupand to transportation exper ts Stephen Blank and Rick Van Schoik, who assisted us with this study on Sustainable FreightTransportation in North America. A special thank you is extended to the Chair of the Advisory GroupBruce Agnew, Directorof the Cascadia Center for Regional Development, Discovery Institutefor his leadership and support. Finally, we thank

Benjamin Teitelbaum of the CEC Secretariat for his work on this project from beginning to end, as well as Ken Ogilvie forwriting the report.

Disclaimer

This independent report was prepared by the CEC Secretariat of the Commission for Environmental Cooperation (CEC) pursuantto Article 13 of the North American Agreement on Environmental Cooperation (NAAEC). In conducting the research, draftingthe report, and forming the recommendations contained herein, the Secretariat has been guided by an international multi-stakeholder Advisory Group. The Advisory Group supports the reports contents, conclusions and recommendations. Theadvisory process was also enriched by consultation with a non-voting ex officiogroup and other government experts fromboth transportation and environmental agencies of each of the Parties to the NAAEC. The content and recommendations of thisreport do not necessarily reflect the opinion of the government ex officioadvisors and consulted experts, nor the participatingagencies and governments.

The report is published in the three languages of the CEC: English, French and Spanish. However, as the text was originallyprepared in English and thereafter translated, in the case of disputed meaning, reference should be made to the Englishversion.

Reproduction of this document in whole or in part and in any form for educational or non-profit purposes may be made withoutspecial permission from the CEC Secretariat, provided acknowledgment of the source is made. The CEC would appreciatereceiving a copy of any publication or material that uses this document as a source.

Except where otherwise noted, this work is protected under a Creative Commons AttributionNoncommercialNo DerivativeWorks License.

Published by the Communications Department of the CEC Secretariat.Commission for Environmental Cooperation, 2011ISBN 978-2-923358-90-1 (print), 978-2-923358-91-8 (electronic)Disponible en espaol: 978-2-923358-92-5 (versin impresa), 978-2-923358-93-2 (versin electrnica)

Disponible en franais: 978-2-923358-94-9 (version imprime), 978-2-923358-95-6 (versin lectronique)

Legal depositBibliothque et Archives nationales du Qubec, 2011Legal depositLibrary and Archives Canada, 2011

Publication DetailsPublication type: Independent Secretariat Report (Article 13)

Publication date: March 2011Original language: English

For more information:

Commission for Environmental Cooperation

393, rue St-Jacques ouestBureau 200Montreal (Quebec) Canada H2Y 1N9T514.350.4300 F514 [email protected] / www.cec.org


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DESTINATION SUSTAINABILITYREDUCING GREENHOUSE GAS EMISSIONS FROMFREIGHT TRANSPORTATION IN NORTH AMERICA

Commission for Environmental Cooperation

Comisin para la Cooperacin Ambiental

Commission de coopration environnementale


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CEC DESTINATION SUSTAINABILITY

Preface 1

Foreword 3

Executive Summary 5

Challenges 6

Key Findings 6

Recommendations 6

1.0 Introduction 9

Process 9

Scope of the Study 11

2.0 Why a North American Approach to Freight Transportation Is Important 13

3.0 Trade, Transportation, and Climate Change in North America 15

3.1 Population and Economic Growth 16

3.2 Trade Growth 16

3.3 Climate Change and Transportation 22

3.4 Challenges to Sustainable Freight Transportation 26

4.0 Key Findings 37

4.1 Pricing Carbon 37

4.2 Reducing Border Delays and Enhancing Security 37

4.3 Integrating Transportation and L and-use Planning 38

4.4 Shifting to More-eff icient Transportation Modes 384.5 Shifting to Lower-carbon Fuels 39

4.6 Increasing the Use and Eff iciency of Transportation Technologies 40

4.7 Funding Transportation Infrastruc ture and Pricing Its Use 44

4.8 Greening Supply Chains and Implementing Best Prac tices 44

4.9 Acquiring Data and Developing Performance Metrics 45

4.10 Reducing Inefficient Freight Transportation Demand 47

4.11 Improving Freight Transportation Governance and Stakeholder Net working 48

5.0 Conclusions and Recommendations 51

Glossary 56

Appendix A: Scenario Workshop Results 58

Appendix B: Participants in the Workshops and Consultations 60

References 63

TABLE OF CONTENTS


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PREFACEFor the 194 countries negotiating the successor to the Kyoto Protocol, its a longroad to 2012the deadline for negotiation and ratification of a new interna-tional framework to deliver stringent global reductions in greenhouse gas (GHG)emissions.

Canada, Mexico and the United States, meanwhile, have an opportunityto focus more immediately on mitigating GHG emissions from key sectorsof the North American economy. For instance, the transportation sector inNorth America today is second only to electricity generation in terms of CO2emissions produced. These emissions have grown steadily during the past40 years and, given continued economic growth and integration of our threeeconomies over the next twenty years, are forecast to increase, with freighttransportation leading the way.

New technologies, standards, and regulations are already making a

difference. However, the projected rates of growth in GHG emissions in comingdecades vary greatly by transport mode. Despite an expected increase in vehiclemiles traveled, light-duty vehicle emissions are expected to decline with con-tinued improvements in fuel economy and efficiency, the adoption of advancedtechnologies, and low- or no-carbon fuels.

Total emissions from freight trucks, on the other hand, are projected toshow a significant increase in emissions over this same period. This is in spiteof better technology and fuel efficiency, and stems mostly from the cumulativeimpact of more trucks moving more freight.

Accordingly, in terms of environmentally sustainable transportation, thisreport focuses on the opportunities to reduce freight-related GHG emissionsfrom road and rail modes in North America.

The most important requirement in avoiding the increases in freight-related

GHG emissions anticipated as a consequence of continued trade and commer-cial growth in the NAFTA region is not simply continued progress in cleaner andmore-efficient fuels and technologies, but the vision and willingnessat a con-tinental scaleto foster an integrated, intelligent, freight transportationsystemthat will play an integral part in greening the North American economy.

Ensuring environmental sustainability requires continental cooperationamong transportation and environmental authorities at all levels along withmyriad stakeholders in the private sector, on policies and actions to optimizedemand, invest in infrastructure, set an effective price on carbon pollution,ensure an optimal modal mix (truck/rail/marine), and manage our borders inthe most secure and efficient manner possible.

The CEC Secretariats previous Article 13 report, Green Building inNorth America,found that the policies and practices required to enhance the

energy efficiency of our built environment are both cost-effective and significantin terms of greening the economy. Similarly, this report also concludes thatthe policies, regulations, and incentives necessary to accomplish sustainabletransportationat a continental scalewill also make our freight system moreefficient, competitive, and energy-secure.

Evan Lloyd

Executive Director

CEC Secretariat


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Our advisory group was driven by a question:

What would an efficient, competitive and environmentallysustainable freight transport system for North Americalook like in 2030?

This report provides some of the answers, and sets out a plan for changeand investment for the next 20 years.

If the trade and intermodal freight system in North America is to play aglobal role in reducing greenhouse gas emissions, improve environmentalquality, enhance regional competitiveness and reduce our dependence onforeign oil, we ask our political leaders and decision makers to pay heed tothis report.

I come from the West Coast of North America, where environmentalconcerns and sustainability have been a driving force for many years.Governments and transport industry operatorschallenged by the dramaticimpact of poor air quality on the health of thousands of people from vulnerablecommunities around our great portshave taken political action to dramaticallyreduce emissions and promote energy independence in the face of competitionfrom countries and regions investing billions in infrastructure and with differentenvironmental regimes.

North America can show the world how to make freight a leadernot afollowerin addressing the challenges of energy security and climate changewhile enhancing economic prosperity.

I am grateful for the extraordinary amount of time our committee of public-and private-sector leaders invested. Stakeholder may be an overused term,

but without the talent and knowledge of our private-sector freight and logisticsmembers this report would not have a real-world foundation. I also thank theCEC staff and consultants for their patience in supporting numerous drafts andedits. It was worth the effort.

Bruce Agnew

Cascadia Center for Regional Development

Seattle

FOREWORD


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This report describes the steps needed to enhance environmental sustainabilityin freight transportation among Canada, Mexico and the United States. It wasalso prepared to stress the important link between environmental sustain-ability and an efficient, competitive, and secure freight transportation systemthroughout North America.

The report focuses on North-South (and equally, South-North) freighttransportation between Canada, Mexico and the United States. The principalenvironmental goal examined was to find ways to reduce carbon dioxide (CO2)emissions, which account for 95% or more of all freight transportationrelatedgreenhouse gas (GHG) emissions. Importantly, measures to improve the GHGperformance and energy efficiency of the transportation sector also carry signifi-cant air quality co-benefits.

It is estimated that the North American economy will grow by 70130%

between the years 2005 and 2030.1

Throughout this period, the transportationsector is expected to maintain its position as a dominant end-user of energy. Toavoid a corresponding increase in freight-related GHG emissions, we will need notonly continued progress in developing fuel economy, technologies, and alterna-tive fuels, but also the vision and will to create an integrated, intelligent, freighttransportationsystem2in North America. Ensuring that the freight system isenvironmentally sustainable in the future also requires implementing a broad setof cooperative policies and actions to optimize demand, invest in infrastructure,set a price for carbon, ensure an optimal modal mix (e.g., truck/rail/marine), andmanage our borders in the most secure and efficient manner possible.

Economic growth in North America over this period will occur againsta background of increasing globalization of trade, finance, technology, andculture. Other trading blocs, such as the European Union, and rapidly devel-

oping countries, notably China, are devoting considerable resources to theimprovement of their transportation systems. North America will need to make acomparable investment to maintain and modernize its transportation infrastruc-ture. The time for vision and cooperation among NAFTA countries is now.

In the absence of concerted action by all three countries, freight trans-portrelated emissions will continue to increase and will undermine the abilityof NAFTA countries to meet their GHG emissions reduction targets. We havechosen a timeframe for this report of 20 yearsfrom 2010 to 2030whilerecognizing that transportation infrastructure and technologies can take manydecades to fully transform. However, a start has to be made, and soon, if we areto get on the path to a more sustainable freight transportation system.

Although each of the NAFTA countries has unique transportation challenges,the countries face common issues for which cooperation and concerted action will

be to their mutual benefit. This report examines those issues and, drawing uponthe knowledge, expertise, and perspectives of more than sixty transportationexperts, government officials, operators, and other key stakeholders, we makerecommendations for actions that we believe will make a profound contributionto the environmental sustainability of the North American transportation system.

A summary of findings and recommendations follows.

EXECUTIVE SUMMARY


1 Commission for Environmental Cooperation (CEC), North American Environmental Outlook to 2030 (Montreal, July 2010), .

2 An intelligent transportation system (ITS) adds information technology to transportation infrastructureand vehicles. It aims to manage vehicles, loads, and routes to improve safety and reduce vehicle wear,transportation times and fuel costs.


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Carbon Pricing and SystemEfficiency StrategiesAll three nations need a portfolioof policies to attract the significantinvestments required to make the

transition to a low-carbon trans-portation system, including theestablishment of an effective price oncarbon emissions that would createincentives to use and generate lessCO2in freight transportation.

A cooperative study should beconducted on the potential forcarbon pricing to contribute toa dedicated North Americanmulti- and intermodal transportinfrastructure fund to minimize

congestion and security-relatedbottlenecks along trade corridorsand at borders and ports of entry.

CO2emissions and otherenvironmental externalities shouldbe major considerations whenpricing strategies are developedto address freight transport.A trinational study should beundertaken to align the freight-related GHG mitigation potentialwith transportation-specific carbonpricing components.

Investments to Improvethe Efficiency of the FreightTransportation System andPromote Advanced Technologies

Adequate sources of funding formajor freight transportation infra-structure investments should becreated. In particular, investments

are required to support reducingthe carbon intensity of movinggoods, recognizing that shifts fromhigh-carbon to low-carbon trans-portation modes and greater use

of technology are needed. All three nations should providemeaningful incentives to supportthe development and deploymentof advanced fuel-saving technolo-gies and freight transportationoperational strategies, includingintelligent transportation systems.Incentives include pricing nega-tives, such as CO2emissions, aswell as incentingpositives, such asresearch and development.

Supply-chain Management Trinational collaboration on

supply-chain carbon accountingand reporting should be developedfor locomotives, marine vessels,airplanes and diesel trucks to helpthe freight sector lower fuel useand GHG emissions, thus reducingcosts across the supply chain andimproving competitiveness.

Training Eco-drivers Truck drivers should be trained in

eco-driving practices, includingthe use of intelligent transporta-tion systems, to operate trucks(and other transportation equip-ment) in the most fuel-efficientmanner. A North American greendriver certification program shouldbe developed to train and certifydrivers for the North American

supply chain. Such trainingshould be coupled with safety andmaintenance training to ensuremarketable job skills for thisvulnerable sector.

Gathering and Sharing Data Transportation, environmental

and statistical agencies in theUnited States, Canada, and Mexicoshould enable the North AmericanTransportation StatisticsInterchange (NATS-Interchange)to develop a comprehensiveNorth American freight datacollection and disseminationplan that ensures comparability,interoperability, and consistency

in data and data formats, and thatprovides a common platform andmethodology for collecting trans-port-related information, includingdata that measure environmentalimpacts. A memorandum of under-standing (MOU) should be signedthat makes NATS-Interchangea mandatory component ofcooperation among the NAFTAcountries, and that facilitates thecollection and sharing of freighttransportation data.

Transportation stakeholdersshould be engaged in identifyingthe key performance goals to beevaluated, and should be involvedin discussions on the feasibility ofdeveloping afreight sustainabilityindexthat combines multipleperformance measures.



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The movement of goods amongCanada, the United States, andMexico is such a part of our daily lifethat it is easy to take it for granted.

However, the challenge of efficacyand sustainability in the movementof goods has wide-ranging impactson the North American economy,its environment, and its naturalresourcesimpacts that have grownsubstantially in the years since theNorth American Free Trade Agreementcame into being in 1994. The dailyeffects from the increases in tradevolume since 1994 are readilyapparent to anyone living near ournational borders, and particularly in

border cities or close to traffic cor-ridors: clogged highways and bordercrossing stations, and air qualityimpacts, including particulate matterand greenhouse gases. But thoseeffects should be of great concern tous all, regardless of where we live.

Perhaps the most consistentimpacts from freight transportationare those borne by the environ-ment, particularly air pollution fromthe fuel burned by trucks and trainshauling the freight. Given the current

discussions on climate policy, theevaluations and initiatives to makefreight transportation as environmen-tally sustainableenvironmentallyfriendly, if you willas possiblemust assume great importance. Thus,the Secretariat of the Commissionfor Environmental Cooperation hasundertaken this study, completed

under Article 13 of the North AmericanAgreement on EnvironmentalCooperation (NAAEC), to presentfindings and recommendations on

environmentally sustainable freighttransportation in North America.

PROCESSThe study that has resulted in thisreport followed a work plan that wasdeveloped in Fall 2009 and com-pleted in August 2010. The processincluded the establishment of anAdvisory Group composed of keystakeholders from the private sectorwho are part of the borderless supplychain stretching from Mexico through

the US to Canada, as well as expertsfrom the trucking and rail industries,academia, and civil society, includingofficials from national transportationdepartments and the Organisationfor Economic Co-operation andDevelopment (OECD), in order toobtain an international perspec-tive. The members are listed in thebox Advisory Group, below, and inAppendix A.

Public consultations were heldin all three NAFTA countries by the

CEC Secretariat and the AdvisoryGroup, in order that the Article 13process might have the benefit ofthe publics input and experience.The first consultation was held inCuernavaca, Mexico, in December2009; the second in February 2010, inCollege Station, Texas; and the thirdin Vancouver, British Columbia, in


PERHAPS THE MOST CONSISTENT IMPACTS FROM FREIGHT

TRANSPORTATION ARE THOSE BORNE BY THE ENVIRONMENT,

PARTICULARLY AIR POLLUTION FROM THE FUEL BURNED BY

TRUCKS AND TRAINS HAULING THE FREIGHT.

INTRODUCTION

Environmental Impactsof Freight Movement:Criteria PollutantEmissions

Trucks and locomotives thatare powered by diesel enginesmove most of the freight inNorth America. Diesel enginesare a major source of nitrogenoxides (NOx), particulatematter (PM) and volatileorganic compound (VOC)emissions. NOxand VOCs areprecursors to ground-levelozone, which can trigger healthproblems, including a variety

of respiratory illnesses. Ozoneis also associated with otheradverse environmental impacts,such as crop and ecosystemdamage. Exposure to PM isalso linked to serious healthconditions, such as aggravatedasthma, difficulty breathing,heart attacks, and prematuredeath. PM is the major sourceof haze that reduces visibilityand creates unsafe conditions

for airplanes and other modesof transportation. In the US,NOx, carbon monoxide (CO)and VOCs are three of sevencriteria pollutants that areregulated based on standardsset by the US EnvironmentalProtection Agency.


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0 INTRODUCTION

March 2010. These meetings includedthe members of the Advisory Group,supplemented by invited experts.Following these meetings, the CECSecretariat organized meetingsduring March 2010 in Mexico City,Washington DC, and Ottawa, Canada,to solicit input and comments fromgovernment officials of environment,transportation, and commerce min-istries and agencies, as well as fromstates and provinces. The governmentconsultations helped give the CECSecretariat a better understanding

of policies and programs in the threecountries, and also helped us identifykey areas in which cooperation toimprove the efficacy and environ-mental sustainability of North Americafreight movement could be putin place.

The CEC Secretariat commis-sioned the Texas TransportationInstitute to prepare a FoundationPaper which profiles the movementof goods throughout North Americaand deals with some of the technicalaspects of freight movement. This

document is available from the CECwebsite at .More than 140 recent reports onfreight transportation and transpor-tation-related pollutant emissionswere reviewed and form part of thebackground research conductedfor the study. They provided inputfor the policy and operationalaspects discussed herein and forthe recommendations that theAdvisory Group has advanced witha North American perspective.

ADVISORY GROUPArticle 13 Initiative on Sustainable Freight Transportation in North America

Member Organization Country

Bruce Agnew Cascadia Center for Regional Development United States

Lloyd Axworthy University of Winnipeg Canada

Scott Belcher The Intelligent Transportation Society of America (ITS America) United States

Nils Axel Braathen Environment Directorate, Organisation for Economic Co-operationand Development (OECD)

International

Jeanne Broad Coalition for Americas Gateways and Trade Corridors United States

Juan Carlos Camargo Wal-Mart Mexico Mexico

Mariana Chew-Snchez Sierra Club United States

Mitch Jackson FedEx Corp. United States

Glen P. Kedzie American Trucking Association United States

Rodolfo Lacy Mario Molina Center for Strategic Studies on Energy and Environment Mexico

Jason Mathers Environmental Defense Fund United StatesRobert McKinstry Railway Association of Canada Canada

David L. Miller Con-way, Inc. United States

Nick Nigro Pew Center on Global Climate Change United States

Robert Oliver Pollution Probe Canada

Susan Shaheen Transportation Sustainability Research Center University of California, Berkeley United States

Glen Wright CEC Joint Public Advisory Committee (JPAC) Canada, Mexicoand United States

Ex OfficioMembers of the Advisory Group*

Member Organization Country

Roberto AguerrebereSalido Instituto Mexicano del Transporte Mexico

Pierre Marin Transport Canada Canada

Christopher BuddyPolovick

SmartWay Transport PartnershipUS Environmental Protection Agency

United States

Robert Ritter Federal Highway Administration United States

* Note: Ex officiogovernment representatives participated in the meetings, discussions and all of the other activities related to membership in the Advisory Group.However, they did not take part in any vote involving the decisions and/or recommendations made by the Advisory Group and the recommendations in this reportdo not necessarily reflect their positions or those of other government participants.


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SCOPE OF THE STUDYThe focus of this report is onnorth-south (and south-north) freighttransportation, particularly road andrail. It examines how the freight trans-portation system in North America canbe made more environmentally sus-tainable, both in terms of the energy/fuel required for freight movementand of the greenhouse gases (GHGs)liberated by fuel combustion. It con-

cludes that the policies and relatedregulations and incentives necessaryto accomplish environmental sus-tainability at a continental scale willalso make our freight transportationsystem more efficient, competitive,and energy-secure.

It is important to observe at theoutset of this report that there are sig-nificant differences among Canadian,Mexican, and US approaches tofederal-state/provincial-local authori-ties and relationships that are centralto understanding key issues thatwe discuss, such as coordination ofprograms among transportation agen-cies, funding of infrastructure, andintegration of freight transportation

and land-use planning. Nevertheless,this report argues that a cooperativepartnership among the three NAFTAcountries is needed, while recog-nizing that principles of federalism ineach country must be respected. Thefederal governments have significant

responsibilities for national trans-portation systems and for facilitatinginterstate/interprovincial and inter-agency cooperation. Our report andrecommendations center on potentialroles of the federal governments atthe continental level, and especiallyon the challenge of reducing green-house gas (GHG) emissions. We notethat recent comprehensive reportshave examined potential strategies

for reducing GHG emissions at thenational and subnational levels inNorth America.3We have avoidedduplicating their extensive work.Few of these reports, however, havelooked at freight transportation froma continental perspective.

3 See, for example, US Department of Transportation, Transportations Role in Reducing US Greenhouse Gas Emissions: A Report to Congress, April 2010.


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Significant changes in North Americanfreight transportation have occurredin recent decades. In the 1980s and90s, many American firms rational-ized their Canadian and Mexicanbranch plants into integratedNorth American production, supply,and distribution operations (as theUS auto industry did in the 1960s).Flows of goods across North Americasinternal borders grew rapidly in this

periodand an increasing share ofthese flows consisted not only of finalproducts but also of componentsand parts moving within companysupply chains. Cross-border supplychains linking production, distri-bution, and marketing resourcesacross the NAFTA nations became adistinguishing characteristic of theNorth American economic system.NAFTA provided critical support for

these developments, not only byremoving tariffs and some other tradebarriers, but also by signaling that thethree North American governmentswould encourage open cross-bordermarket growth in most sectors oftheir economies.4

It is important to develop aNorth American approach to freighttransportation for the followingreasons, which are elaborated on

in this report:

1 Growing population and inte-grated North American economies

2 Deteriorating and inad-equately funded freighttransportation infrastructure

3 Excessive border delays fortruck freight movement

4 Data gaps and inconsistenciesbetween and among Canada,Mexico and the United States

5 Significant technologydevelopment anddeployment opportunities

6 Increasing global competition

7 Increasing concern about climatechange impacts and adaptation

Thus, there is both a need and anopportunity for the three NAFTA coun-tries to work toward a common visionfor a more efficient, competitive,secure, and environmentally sustain-able freight transportation system.


4 Stephen Blank, with Malcolm Cairns, Drivers of Change: Envisioning North Americas Freight Transportation System in 2030, Working Paper No. 7, North AmericanTransportation Competitiveness Research Council, August 2008, p. 4.

WHY ANORTH AMERICAN

APPROACH TOFREIGHTTRANSPORTATION ISIMPORTANTTHERE IS BOTH A NEED AND AN OPPORTUNITY FOR THE THREE NAFTA COUNTRIES TO

WORK TOWARD A COMMON VISION FOR A MORE EFFICIENT, COMPETITIVE, SECURE,

AND ENVIRONMENTALLY SUSTAINABLE FREIGHT TRANSPORTATION SYSTEM.


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We must face the challenges ofreducing greenhouse gas (GHG) emis-sions from road and rail modes whilerecognizing other environmental andhealth impacts related to the move-ment of freight in North America.When considering measures to reduceCO2emissions, it is important toassess the health and environmentalimpacts and co-benefits of mitigation

initiatives, including changes to emis-sions of criteria pollutants.

This study complements otherresearch, consultation, and analysisconducted by the CEC on reducingGHG emissions from significant sec-toral wedges of the North Americaneconomy. Previous CEC work hasincluded examination of energy-related activities, such as electricpower generation and industrial fueluse, as well as the potential for greenbuilding to reduce CO2emissions.

The North American economy ispredicted to grow significantly overthe coming decades. Throughout thisperiod, the transportation sector isexpected to maintain its position as

a dominant end-user of energy. Toavoid a corresponding increase infreight-related GHG emissions, wewill need not only continued progressin fuel economy, technologies, andalternative fuels, but also the visionand will to create an integrated, intel-ligent, freight transportation systemin North America. Ensuring that thefreight system is environmentally

sustainable in the future also requiresimplementing a broad set of coopera-tive policies and actions to optimizedemand, invest in infrastructure,set a price for carbon, ensure anoptimal modal mix (e.g., air/truck/rail/marine), and manage our bor-ders in the most secure and efficientmanner possible.

North America is home to lessthan seven percent of the worldspopulation, but it currently emitsapproximately 25% of global

emissions of the most importantgreenhouse gas, carbon dioxide(CO2).5Per person, North Americaemits twice as much CO2as Europe,over five times as much as Asia, and

over 13 times as much as Africa.Per capita emissions are severaltimes higher in Canada and theUnited States than in Mexico. Thehigh rates in Canada and the US arelargely a result of higher per capitalevels of economic activity, which havehistorically driven greenhouse gasemissions, especially those relatedto energy consumption.6The link

between per capita income and CO2emissions is strong, as has been thegeneral relation of economic growthto environmental degradation. Findingways to break this link, and decouplegrowth and related stress on the envi-ronment, is a fundamental challenge.

Reducing freight transportationCO2emissions is particularly chal-lenging, for reasons that includethe following:

There is little or no discretionary

freight transportation by shippers.7

Impacts on freight transportationcan have substantial implicationsfor North Americas economy andglobal competitiveness.

TRADE, TRANSPORTATION,

ANDCLIMATE CHANGEINNORTH AMERICA


TO AVOID A CORRESPONDING INCREASE IN FREIGHT-RELATED GHG EMISSIONS, WE WILL NEED NOT

ONLY CONTINUED PROGRESS IN FUEL ECONOMY, TECHNOLOGIES, AND ALTERNATIVE FUELS, BUT ALSO

THE VISION AND WILL TO CREATE AN INTEGRATED, INTELLIGENT, FREIGHT TRANSPORTATION SYSTEM

IN NORTH AMERICA.

5 Commission for Environmental Cooperation (CEC), The North American Mosaic: An Overview of Key Environmental Issues, 2001,(accessed 15 April 2010).

6 Ibid.7 Meaning that shippers will move freight if the client is willing to pay the price.


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globalization. These trends are

important because the movement of

goods and services is often referred

to as a derived demandone that

correlates strongly with popula-

tion and economic drivers. In other

words, freight moves to meet

consumer demand.

Commodity movements in

North America are concentrated in

trade between Canada and the US,

and between Mexico and the US, as

the amount of goods shipped between

Mexico and Canada is relatively small.

Canada is the United States largest

global trading partner and Mexico is

the third-largest. By value, about 88%

of US trade with Canada and Mexico

moves on land.

PRINCIPAL NORTH AMERICAN TRADE CORRIDORS2FIGURE

500

400

300

200

100

0

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

1FIGURE

US LAND TRADE WITH CANADA AND MEXICO (IN BILLION US$),BY MODE

TRADEINB

ILLIONSU

S$

Rail

Road

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MX

CA

MXCA

MX

Source: Graph created with data from the North American Transborder Freight Database,. Accessed 07/08/2010.

YEAR

Source: Developed by the CEC from: Texas Transportation Institute, Greening North American Transportation Corridors: Challenges and Opportunities, May 2010,Texas A&M University.


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350

300

250

200

150

100

50

01990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

4FIGURE

CANADIAN DOMESTIC FREIGHT ACTIVITY, IN SELECTED MODES

Water Transport

Pipeline

Rail

Road

BILLIONSOFTONNE-KILOMETERS

5FIGURE

MEXICAN DOMESTIC FREIGHT ACTIVITY, IN SELECTED MODES


Water Transport

Rail

Road

250

200

150

100

50

01990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

6FIGURE

US DOMESTIC FREIGHT ACTIVITY, IN SELECTED MODES


4,000

3,000

2,000

1,000

01990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Air

Water

Pipeline

Rail

Road

Sources for Figures 46: US Department of Transportation, Research and Innovative TechnologyAdministration, Bureau of Transportation Statistics; US Depar tment of Commerce, Census Bureau; StatisticsCanada; Transport Canada; Instituto Mexicano del Transporte; Instituto Nacional de Estadstica y Geografa;Secretara de Comunicaciones y Transportes; North American Transportation Statistics Database, Section 05Domestic Freight Activity, Table 5-2, Domestic Freight Activity by Mode (tonne-kilometers),, accessed 30 August 2010.


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0 TRADE, TRANSPORTATION, AND CLIMATE CHANGE IN NORTH AMERICA

Figure 7 shows the potentialfor serious rail capacity constraintsby 2035 if capacity improvementsare neglected, given the significantgrowth in daily train transportationuse of primary rail corridors in theUnited States that is expected. (Redindicates the percentage of kilo-meters operating above capacity;yellow and orange the percentageat or near capacity; and green, thepercentage below capacity.) Lackingimprovements, 30 percent of the rail

kilometers in primary corridors will

be operating above capacity by 2035.Investment in rail transportationinfrastructure is in the hands of corpo-rations, since they are privately ownedin all three NAFTA countries; hence,governments currently have limitedoptions to directly affect changes inthe rail transportation system.

While water, air, and othermodes of freight transportationare not covered in any depth inthis report, it is important to notethat air freight transportation is

growing rapidly.

International trade with countriesoutside North America is primarilyhandled by maritime ports thatsend or receive goods to and fromother parts of the world. Some portshandle petroleum products andother fluids, which account for alarge part of the total cargo tonnage.However, those products are usuallyprocessed in the port and do not leavethe terminal or are transported bypipeline, as opposed to by truck orrail. Containerized cargo movement,however, has increased substantially,and containers at ports are usuallytransported to and from productionand consumption centers by truck orrail. North American container porttraffic doubled between 1995 and2008an almost 6% average annual

growth rate during that period.There is growing interest in theUnited States in moving cargo onmarine highways. On 7 April 2010,the US Department of Transportationunveiled an initiative to move morecargo on water, rather than oncrowded highways.16This new initiativewill identify rivers and coastal routesthat could carry cargo efficiently,bypassing congested roads aroundbusy ports, reducing GHG emissionsand air pollution, and creating jobs for

skilled mariners and shipbuilders.

16 See The Journal of Commerce, 7 April 2010, .

Note: Based on 2005 train volumes on the 85th percentile day compared to 2007 capacity. Rail corridorkilometers are classified as Level of Service Grades (LOS Grades): A, B, Cbelow capacity; Dnear capacity;Eat capacity; Fabove capacity.Source: Cambridge Systematics, Inc., 2007, Figure 8.1.

7FIGURE

IMPACT ON THE RAIL-FREIGHT CORRIDOR IN LEVEL OF SERVICEBY 2035 WITH AND WITHOUT CAPACITY IMPROVEMENTS

PercentageofPrimaryCorridorR

outeKilometers

100

90

80

70

60

50

40

30

20

10

0

2005 2035 without improvements 2035 with improvements

A

B

C

DE

A

B

C

D

F

E

A

B

C

D EFF


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Figure 8 indicates the potentialGHG emissions reduction benefits ofinland barges.

There has been considerablepublic discussion in Canada aboutshort sea shipping as a means ofaddressing highway congestion whileat the same time reducing GHGemissions. In spite of this, the growthin short sea business activity inCanada has been slow to develop. It ismore than five years since Canada,Mexico, and the United States signeda Memorandum of Co-operation toaccelerate the adoption of short seashipping by North American busi-nesses, but to date there has been nosignificant impact in terms of eithernew service provision or diversion oftraffic from trucks to ships.17

Very little control is exercisedover aircraft and maritime emissionsby national, regional, or internationalagencies, largely due to jurisdic-tional, geographical, and technical

difficulties. They are, however,

important transportation modes andmust be part of a comprehensiveapproach to creating a more sustain-able freight transportation system forNorth America. Each of these modes

has its own benefits, costs, and

environmental and social impacts thatmust be weighed against the advan-tages and disadvantages of otherfreight transportation modes.

17 Mary R. Brooks and James D. Frost, Short Sea Developments in Europe: Lessons for Canada , Working Paper No. 10, North America Center for Transborder Studies,Arizona State University, July 2009, , p. 1.

18 Bureau of Transportation Statistics,Americas Freight Transportation Gateways, US Department of Transportation, Research and Innovative TechnologyAdministration, November 2009, p. 2, .

19 D. Rick Van Schoik and Christopher Chamberlin, Proximity LostThe NAFTA Trade Deficit, NACTS Policy Analysis Review No. 6, North American Center forTransborder Studies, Arizona State University (2009).

20Ibid., p.2.

During the past two decades, the relative importance ofinternational merchandise trade to the overall US economyhas increased significantly. In inflation-adjusted terms, theratio of goods traded in comparison to GDP was 23% in2008, up from 12% in 1990. In 2008, US merchandise tradewith NAFTA partners Canada and Mexico totalled $964billion, more than one-fourth (28%) of the value of overallUS merchandise trade. As trade with Asia expanded,however, this share declined from the record high of 33%in 2001.18

North America competes with other trading nations andblocs. The North America tariff-free bloc has been losing

relative market share to the rest of the world since theNorth America Free Trade Agreement was enacted in 1994.For example, since 2000, annual trade among Mexico,

Canada, and the United States has grown from just underUS$700 billion to $1 trillion, whereas North American tradewith the rest of the world has grown from US$1.5 trillion to$3 trillion.19One of the reasons advanced for this is theunderinvestment in North American freight transportationsystems, along with inadequate attention to labor andmobility needs.20

In his State of the Union Address of 27 January 2010,US President Obama set a new goal of doubling US exportsover the next five yearsa measure that would supporttwo million jobs in America. To meet this goal, the US willlaunch a National Export Initiative that will help farmers

and small businesses increase their exports, and that willreform export controls consistent with national security.

Growth in US International Trade outside NAFTA

Source: Modified from The Journal of Commerce,.

8FIGURE

TONS OF CO2PER MILLION TONNE-KILOMETERS, BY MODE

The Greener Way to GoInland barges produce less CO2while moving Americas cargoes.

In terms of CO2produced per ton of cargo moved, inland barges havea significant advantage over trains and trucks.

Tonnes of CO2per million tonne-km

104.528.2

39.3


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The magnitude of US NAFTA-related land trade highlights theimportance of north-south freighttransportation corridors and the roleof key land gateways. Regardingmodal shares, in 2008, trucks moved33% of the tonnage of total landtrade imports, rail moved 32%, andpipelines accounted for 35%. Truckstransported a larger percentage ofthe tonnage of US land imports fromMexico (74%) than from Canada(25%). By comparison, in 2008, railtransported 24% of the tonnage ofland imports from Mexico and 33%from Canada.21

In Canada, overall freight move-ment is expected to increase by 60%between 1990 and 2020, with thegreatest growth occurring in the air

and trucking sectors.22

In Mexicos case, freight transportactivity grew moderately through the1990s. Freight transport demand isdriven by trade with the US, whichaccounts for 88% of exports and63% of imports. The modal split forland transport has remained broadlystable since 1990. This stability isof particular note, given the majorchanges in the rail sector spurred byprivatization in the mid-1990s. Roadfreight has been forecasted to grow

by an annual average of 3.2% over theperiod 20102014. Rail freight growth,at 3.9%, is expected to lead the wayin ground transportation, boosted bythe development of private railwaysand the growing realization that railis a cost-effective mode for bulkfreight transport.23

While the changes to NorthAmerican freight transportation inthe 1980s and 1990s were profound,the freight transportation system

was seriously challenged in the early2000s when security concerns tookcenter stage and trumped otheraspects of North American freighttransportation, especially at bordercrossings. Today, problems of chronicunderinvestment in road freighttransportation infrastructure, ongoingstructural changes in transportationsystems, and issues related to safetyand security interact with concernsabout air quality, climate change, andsocietal issues, such as environmentaljustice24and livable communities.

The efficient delivery of goodsand services contributes to theeconomies and quality of life ofpeople around the world. Visionaryinvestments in transportation infra-structure, such as the US Interstate

highway system and national freightrail systems, meant that for manydecades, freight transportationin North America was a source ofglobal competitive advantage. Thesesystems are aging, and competitive

advantage is eroding. North Americastransportation infrastructure is notbeing adequately supported, andtransportation systems are notbeing expanded and modernizedat rates comparable to those ofglobal competitors.

3.3 CLIMATE CHANGEAND TRANSPORTATION

3.3.1 Global greenhousegas emissions

Along with increasing population,economic growth, and increasingtrade have come increasing green-house gas emissions and evidenceof a changing climate.25 Global GHGemissions increased by about 61%from 1970 to 2005 (roughly 1.4%per year), with CO2being the largest

source, growing by about 86% (or1.8%).26The largest growth in globalCO2emissions came from power gen-eration and road transport.27Figure 9shows transportations share of globalCO2emissions from fuel combustion.

21 Ibid., p. 10.22Transport Canada, Transport Canada Sustainable Development Strategy 20072009, Part 4: Key Issues in Transportation and Themes for 20072009.23 Business Monitor International, Mexico Freight Transport report Q2 2010, .

Accessed 21 March 2010.24 National Environmental Justice Advisory Council, Reducing Air Emissions Associated With Goods Movement: Working Towards Environmental Justice, A Report of

Advice and Recommendations to the US Environmental Protection Agency, November 2009.25 Climate changerefers to a change in the state of the climate that can be identified by changes in the mean and/or the variability of its properties and that persists

for an extended period, typically decades or longer. Climate change may be caused by natural internal processes or external forcing or by persistent anthropogenicchanges in the composition of the atmosphere or in land use. Taken from: CEC, The North American Mosaic: An Overview of Key Environmental Issues,.

26OECD, Reducing Transport Greenhouse Gas Emissions: Trends and Data, 2010, International Transport Forum, p. 5.27 Intergovernmental Panel on Climate Change. Climate Change 2007: Synthesis ReportSummary for Policymakers, 2007.

Source:International Energy Agency (OECD). 2009. IEA Statistics: CO2Emissions from Fuel Combustion.Compiled from Key sources for CO2emissions from fuel combustion in 2007, p. 115.

9FIGURE

SECTORAL BREAKDOWN OF GLOBAL GHG EMISSIONS FROMFUEL COMBUSTION, 2007

Energy, coal, gas, oil

Transport, road

Other transport, oil

Manufacturing, coal, gas, oil

Other uses + residential

46%

6%23%

6%

19%


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Atmospheric CO2concentrationshave increased by more than 100 partsper million (ppm) since their pre-industrial level, reaching 391 ppm byvolume as of April 2010.28

3.3.2 Freight transportationCO2emissions

The transport sector (all modes,including passenger) is a significantcontributor to GHG emissions in mostcountries, representing 23% (global)and 30% (OECD nations) of overallCO2emissions from fossil fuel com-

bustion in 2007. Global CO2emissionsfrom transport grew by 45% from1990 to 2007. And under businessas usual, including many plannedefficiency improvements, global CO2

emissions from transport are expectedto continue to grow by approximately40% from 2007 to 2030though thisis lower than estimates previous tothe 2008 economic crisis.29Growthin transport-sector GHG emissionshas typically mirrored growth ineconomic wealth and has kept pacewith or even surpassed growth ofemissions from the energy sector. Thesector as a whole is 98% dependenton petroleum.30

In absolute terms, North Americaand the European Union dominated

transport-sector GHG emissions,representing 34.7% and 19.2%,respectively, of global transportemissions in 2005. The road sector(including both passenger and freight

transportation) dominates in allregions, representing approximatelythree-fourths of total transportCO2emissions.31

In North America, the transpor-tation sector is the second-largestsectoral contributor to emissionsof CO2(next to electricity genera-tion). Emissions from transportationhave grown steadily during the past40 years and have grown most rapidlyin Mexico, the country that is themost dependent on road transport.Figure 10 shows US CO2emissions

broken down by economic sector andfuel for 2007, and projected to 2030.In North America, freight trans-

portation CO2emissions representedapproximately 7.8% of total USemissions in 2008 and 8% of totalCanadian CO2emissions in 2007.32The entire transportation sector(including both passenger and freighttransportation) accounted for 18%of total Mexican emissions in 2002.33Freight transportation CO2emissionsare projected to continue to increase

their share relative to passengertransportation emissions in allthree countries.

28 Mauna Loa CO2annual mean data from US National Oceanic and Atmospheric Administration.29 OECD, International Transport Forum, 2010, op. cit. (note 26), p. 5.30 OECD, Greenhouse Gas Reduction Strategies in the Transport Sector: Preliminary Report, 2008, International Transport Forum,

, p. iii.31 Ibid., p. 12.32 Note: Railways and Domestic Marine emissions estimates include passenger transportation and exclude Domestic Aviation. These variables do not have a large

impact on the total share of freight emissions.33 Mexicos National GHG Inventory (19902002).

THE EFFICIENT DELIVERY OF GOODS AND SERVICES CONTRIBUTES TO THE ECONOMIES AND QUALITY OF

LIFE OF PEOPLE [] FOR MANY DECADES, FREIGHT TRANSPORTATION IN NORTH AMERICA WAS A SOURCE

OF GLOBAL COMPETITIVE ADVANTAGE.

10FIGURE

US CO2EMISSIONS, BY ECONOMIC SECTOR AND FUEL,2007 & 2030

Note: Bars show 2007 and 2030 data in million metric tons.Source:US Department of Energy, Energy Information Administration. International Energy Outlook 2009

with projections to 2030, . Accessed December 2009.

MILLIONMETRICTONS(M

t)

3,000

2,000

1,000

0

Petroleum

Natural gas

Coal

Electricity

2007 2030 2007 2030 2007 2030 2007 2030 2007 2030

Residential Commercial Industrial Transportation Electricity generation

4,7355,991

6,414

1980 2007 2030

Total carbon dioxide emissions(Mt)


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Figures 1115 show emissionssegmented by transportation modefor the United States, Canada,and Mexico.

According to the US EnvironmentalProtection Agncys (EPAs) Inventoryof GHG Emissions, US freight-relatedemissions increased by 74% from1990 to 2008, while at the same timepassenger transportation emis-sions increased by 33%. Overall, theincrease in GHG emissions during thisperiod from all US emissions sourceswas 14%.34Thus, both freight and pas-senger transportation emissions haveincreased their shares of overall USGHG emissions.

Projections for the US showlittle growth in GHG emissions fromtransportation in coming decades

with total GHG emissions growingonly 0.7% between 2007 and 2030,as shown in Table 1 (page 26). Note,however, that modes show verydifferent rates of growth. Despitea 42% increase in vehicle milestraveled (VMT) over the period,light-duty vehicle GHG emissions areprojected by the US Department ofTransportation to decline nearly 12%in response to expected increasesin fuel economy from fuel efficiencyregulations, advanced technologies,

and alternative fuels. Freight trucks,on the other hand, show a projected20% increase in emissions.35

Since 1990, the CO2intensity offreight movement, measured in tonsof CO2eq (carbon dioxide equivalent)emissions per tonne-kilometer ofcargo, has increased significantly.This trend is mainly the result of theincreasing utilization of energy-inten-sive freight modes, especially freighttrucks, which provide faster and morereliable service at the expense of

energy efficiency. Table 1 shows thatfreight trucks accounted for 17.4% of

total transportation CO2eq emissionsin the US in 2007 and is projected tobe 20.7% by 2030.

Within the freight transportationsector, emissions from trucks consti-tuted about three-quarters of the UStotal in 2006. Notably, Class 8 trucks36

consumed 78% of the fuel useamong Classes 38 trucks, despite

making up only 42% of the Classes38 trucking fleet.37

In Canada, the transportationsector (all modes) is the second-largestcontributor to GHG emissions. Withinthe transportation sector, freight trans-portation accounted for approximately

38% of the sectors GHG emissionsin 2007 (see Figure 13). Moreover,

Source:Calculated from US EPA, Inventory of US Greenhouse Gas Emissions and Sinks: 19902008 (April 2010),US EPA # 430-R-10-006, Table 3-12 CO2Emissions from Fossil Fuel Combustion in TransportationEnd-Use Sector (TgCO2eq), .

12FIGURE

TRANSPORT CO2EMISSIONS IN THE UNITED STATES, 19902008

2500

2000

1500

1000

500

0

MEGATONNES(Mt)CO2eq

International

Other

Rail

Waterborne

Aircraft

Medium- andHeavy-dutyTrucks and Buses

Light-duty vehicles

1990 1995 2000 2005 2006 2007 2008

YEAR

34US EPA, Inventory of US Greenhouse Gas Emissions and Sinks: 19902008, 2010, Washington, DC,.

35 US Department of Transportation, Transportations Role in Reducing US Greenhouse Gas Emissions, Volume 1, April 2010, pp. 226.36 Class 8 trucks are trucks over 33,000 lb gross vehicle weight rating (GVWRsee Glossary). In most cases, Class 8s are three-axle vehicles.37 Edgar Blanco and Kwan Chong Tan, EPA SmartWay Transport Partnership, Massachusetts Institute of Technology Center for Transportation and Logistics, 6/1/2009.

11FIGURE

US TRANSPORTATION GHG EMISSIONS,BY TRANSPORTATION MODE, 2008

Source:Excerpted from US Environmental Protection Agency (EPA), Inventory of US Greenhouse Gas Emissionsand Sinks: 19902008(April 2010), US EPA # 430-R-10-006, Table 2-15 Transportation-RelatedGreenhouse Gas Emissions,.

Lubricants

Commercial Aircraft

Passenger Cars

Light-duty Trucks

Pipelines

0.6%

0.5%

Medium- andHeavy-duty Trucks

Buses

0.1%Motorcycles

1.8%Other Aircraft

Rail2.7%

2.0%Ships and Boats

1.8%

6.5%

33.4%

21.2%

29.2%


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emissions from freight transportationare growing at a faster rate than thoseof passenger transportation.38GHGemissions from heavy-duty dieselvehicles increased by 23.8 Mt ofCO2eq from 1990 to 2007a 161%rate of growth.39

In Mexico, transportation isconsidered to be responsible forabout 18% of total country GHG emis-sions and is second only to energygeneration as an emissions source.40

Other research projects substan-tially higher GHG impacts from freight

transportation (both road and rail) by

2035, depending on the sizes of thetruck and rail fleets and the degreeto which the vehicle and locomotivepopulations in service utilize the mostcurrent emission control technologiesand engine designs.41Regardless ofthe exact amounts, it seems certainthat GHG impacts along principaltrade corridors will be noticeablygreater by 2035.

As an example of this, Figures 16and 17 (pages 2728) show possibili-ties for the increased GHG levels indifferent segments of the road andrail transportation corridor stretchingfrom Mexico City to Montreal,Canada.42Emissions, indicatedthrough color coding, are given onlyfor CO2levels, for the sake of graph-ical simplicity, because these are two

or three orders of magnitude higherthan those of other pollutants. Asanalyzed by the Texas TransportationInstitute (TTI), trucks emit morethan 75 times as much CO2as freightlocomotives in 2010 (the base case).In 2035 the total CO2contributionof both modes will be higher than inthe base year; however, the increasein the portion from trucks will beat a greater rate: it is expected thatin 2035, trucks will emit more than110 times the total CO2from

freight locomotives.43In closing this section, we

note that despite the focus on CO2emissions in this report, CO2is notthe only significant freight-relatedenvironmental and climate-forcingemission. There is also concern aboutother Kyoto GHG emissions andnon-Kyoto emissions, such as blackcarbon (see text box) and organiccarbon emissions, as well as emis-sions of NOx, SOx, and other criteriaair pollutants.

Source:a) Statistics Canada, Report on Energy Supply-Demand in Canada, 19902007, Ottawa, February 2009;b) Natural Resources Canada, Transportation End-Use Model, Ottawa, August 2009;c) Environment Canada, Canadas Greenhouse Gas Inventory 19902007, Ottawa, April 2009.

14FIGURE

TRANSPORT CO2EMISSIONS IN CANADA, 19902007

YEAR

200.0

180.0

160.0

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0.0

MtCO2eq

1 99 0 1 99 1 1 99 2 1 99 3 1 99 4 1 99 5 1 996 1 997 1 99 8 1 99 9 2 000 2 00 1 2 002 2 003 2 00 4 20 05 20 06 2 00 7

Off-road

Marine

Freight Rail

Freight Road

PassengerTransportation (Road,Rail, Air, Transit)

38Transport Canada, Transport Canada Sustainable Development Strategy 20072009,Part 4, Key Issues in Transportation and Themes for 20072009,; and/or Natural Resources Canada, National Energy Use Database,.

39Environment Canada, Canadas Greenhouse Gas Inventory 19902007, Freight Transportation GHG Emissions by Transportation Mode (Mt of CO2eq), Ottawa, April 2009.40 Juan C. Villa and Annie Protopapas, Sustainability and Freight Transportation in North America: Foundation Paper, Texas Transportation Institute, The Texas A&M

University System, College Station, Texas, March 2010.41 Somewhat higher emission impacts are projected in Greening North American Transportation Corridors: Challenges and Opportunities, May 2010, Texas

Transportation Institute, Texas A&M University, pp. 2021.42 Prepared for the CEC by the Texas Transportation Institute.43 Texas Transportation Institute, op. cit. (note 41), p. 20.

Source:a) Statistics Canada, Report on Energy Supply-Demand in Canada, 19902007, Ottawa, February 2009;b) Natural Resources Canada, Transportation End-Use Model, Ottawa, August 2009;c) Environment Canada, Canadas Greenhouse Gas Inventory 19902007, Ottawa, April 2009.

13FIGURE

CANADA TRANSPORTATION GHG EMISSIONS,BY TRANSPORTATION MODE, 2007

Passenger Air & Marine

Freight Road

Freight Rail

Freight Air

Passenger Road

Passenger Rail

Off-road Transit & Motocycles

4%

2%

0.1%

4%

0.2%

42%34%

14%


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3.4 CHALLENGES TOSUSTAINABLE FREIGHTTRANSPORTATION

Concerns about freight transportationsystems have been voiced in Canada,Mexico and the United States, bol-stered by calls for the development ofan integrated North American freighttransportation system. The CanadianChamber of Commerce, for example,advocates treating the Canada-USborder as part of the freight supplychain and passenger travel system.The Chamber claims that if the borderworks well, it will allow the countrieseconomies to grow and will sup-port the seven million jobs in theUnited States and three million inCanada that rely on a close partner-ship.44It has also been stated that

Mexico is at a crossroads betweenstagnation and advancement.Mexicos future in advanced manu-facturing depends on addressing arange of issues, such as privatization,regulatory frameworks, inter-modaltransport, and security.45

A large number of studies,reports, and a wide range of transpor-tation stakeholders have identifiedchallenges confronting freight trans-portation in North America. Manyhave called for national and North

American visions of sustainabletransportation. The US NationalSurface Transportation Policy andRevenue Study Commission, forexample, stated that the transporta-tion challenges facing the US havereached crisis proportions. Key issuesidentified by the Commission includeddeferred maintenance of basic infra-structure, crippling traffic congestion,burgeoning international trade, andthe use of fossil fuels to power carsand trucks.46

TABLE 1: US GHG EMISSION PROJECTIONS (Mt CO2eq),BY MODE

2007 2030 % Change20072030

2007 Share,by Mode

2030 Share,by Mode

Light-duty vehicles 1,221.4 1080.9 -11.5 56.7 49.8

Commerciallight trucks

43.3 41.6 -4.3 2.0 1.9

Bus transportation 20.2 20.6 2.0 0.9 0.9

Freight trucks 374.9 449.7 20.0 17.4 20.7

Rail, Passenger 6.6 8.2 24.7 0.3 0.4

Rail, Freight 48.8 55.4 13.5 2.3 2.6

Shipping,

Domestic

28.3 32.7 15.7 1.3 1.5

Shipping,International

78.0 79.9 2.5 3.6 3.7

Recreational boats 19.7 21.2 7.8 0.9 1.0

Air 194.1 246.6 27.1 9.0 11.4

Military use 50.3 55.2 9.8 2.3 2.5

Lubricants 5.2 5.6 7.5 0.2 0.3

Pipeline fuel 31.8 37.4 17.6 1.5 1.7

Other 33.0 36.3 10.0 1.5 1.7

TotalTransportation

2,155.5 2,171.3 0.7

Source: US Department of Transportation, Transportations Role in Reducing US Greenhouse GasEmissions, Vol. 1: Synthesis Report, April 2010, Table 2.3, pp. 227.

44 The Canadian Chamber of Commerce, Transportation Strategy SeriesPillar #1: A North American Vision, April 2009, .45 Stephen Blank with Malcolm Cairns, Drivers of Change: Envisioning North Americas Freight Transportation System in 2030,Working Paper No. 7,

North American Transportation Competitiveness Research Council, August 2008.46 National Surface Transportation Policy and Revenue Study Commission, Transportation for Tomorrow, Report of the National Surface Transportation Policy and

Revenue Study Commission, Volume 1, Recommendations, December 2007, Washington, DC, ,p. 2.

15FIGURE

MEXICO GHG EMISSIONS, BY TRANSPORTATION MODE, 2002

Source:Taken from Juan C. Villa and Annie Protopapas, Sustainability and Freight Transportation inNorth America: Foundation Paper, Texas Transportation Institute, The Texas A&M University System,College Station, Texas, March 2010.

Rail

Marine Air

1%

2%

On-road

6%

91%


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16FIGURE

ESTIMATED TRUCK CO2EMISSIONS, 2010 vs 2035

Source: Adapted from Texas Transportation Institute, Greening North American Transportation Corridors: Challenges and Opportunities, May 2010,Texas A&M University.


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17FIGURE

ESTIMATED RAILWAY CO2EMISSIONS, 2010 vs 2035

Source: Adapted from Texas Transportation Institute, Greening North American Transportation Corridors: Challenges and Opportunities, May 2010,Texas A&M University.


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47 International Council on Clean Transportation. Policy-relevant guidance on black carbon. The information is consistent with the Fourth Assessment Reportof theIntergovernmental Panel on Climate Change (IPCC), published in 2007, and is further informed by the 2009 London International Workshop on Black Carbon andsubsequent discussions with workshop participants, .

Black carbon is a solid particle emitted during incompletecombustion. All particle emissions from a combustionsource are broadly referred to as particulate matter (PM) andusually delineated by size: PM10= less than 10 micrometers,PM2.5= less than 2.5 micrometers. Black carbon is the solidfraction of PM2.5that strongly absorbs light and convertsthat energy to heat. When emitted into the atmosphere anddeposited on ice or snow, black carbon causes globaltemperature change, melting of snow and ice, and changes

in precipitation patterns.Fossil fuel combustion in transport; solid biofuelcombustion in residential heating and cooking; and openbiomass burning from forest fires and controlled agricul-tural fires are the source of about 85% of global blackcarbon emissions.Maximum feasible reductions in 2030can capture 2.8 Tg/yr (teragrams per year, equal to 2.8 mil-lion tonnes/year) of black carbon, a reduction of 60% frombusiness-as-usual. Co-emitted pollutants and the location ofemission activity will determine the net impact of controlstrategies on the climate.

Public health protection is already a strong argumentfor actions that control black carbon.Exposure to PM isresponsible for hundreds of thousands of global deaths

each year. Actions that reduce PMsuch as new require-ments for exhaust after-treatment, with the lower-sulfurfuels; fuel switching; and reductions in fuel consumptioncan reduce a substantial fraction of black carbon emissions.Regardless of the climate protection benefits, there is astrong case for taking these actions in order to protectpublic health.

The climate impacts of black carbon reinforce thepublic health need for actions to control PM emissions.According to the IPCC, black carbon is the third-largestcontributor to the positive radiative forcing that causesclimate change. One kilogram is about 460 times morepotent than an equivalent amount of carbon dioxide over a100-year time horizon and 1,600 times more potent over a

20-year horizon, based on unofficial IPCC estimates. IPCCestimates of radiative forcing are conservative compared toothers in the published literature.

Controls on black carbon can produce rapid regionaland global climate benefits.Like all aerosol particles, blackcarbon washes out of the atmosphere within a few thousand

kilometers from its source, so it produces essentiallyshort-lived radiative forcing. This forcing produces strongregional climate impacts that extend beyond the forcingregion and approach a global scale. In the aggregate theseregional impacts are a global problem. A climate changemitigation strategy that incorporates short-lived forcingagents like black carbon can more rapidly reduce the positiveradiative forcing that causes climate change, especially whenrapid action is needed to avert tipping points for large-scale

impacts like the loss of Arctic summer sea ice, theHimalayan-Tibetan glaciers, and the Greenland ice sheet.Black carbon reductions supplement but do not replace

actions to control carbon dioxide and other greenhousegases.A focus of climate change mitigation is to reduce allpositive radiative forcing, and carbon dioxide is the largestpositive forcing agent, so any delay in CO2emissionreductions extends its climate impacts. Actions that reduceblack carbon and carbon dioxide emissions in parallel willmore effectively reduce total positive radiative forcing.

Controls on black carbon will reduce both positive andnegative radiative forcing, so decisions to act on a climatebasis alone should focus on the net effect.Black carbon isemitted with other pollutants that reflect light and offset its

positive forcing. These include primary and secondaryorganic carbon, sulfates, and nitrates produced in amountsthat vary with the combustion and fuel type of each source.The net effect of sources is modified by the transport anddeposition of its black carbon emissions onto ice and snow,so major sources that produce negative forcing in theatmosphere can still be net positive forcers if they depositsufficient amounts into the Arctic or atop mountain glaciers.

The highest priority targets strictly from a climatemitigation perspective are sources that cause net positiveradiative forcing, such as combustion of fossil fuels low insulfur and deposition of black carbon on ice and snowsurfaces.On-road heavy-duty diesel vehicles, off-roadagricultural and construction equipment, residential coal

combustion, and industrial brick kilns are generally netpositive forcers. Open agricultural burning, residentialbiofuel burning and commercial shipping may be negativeforcers, but these can be offset locally if there is blackcarbon deposition on snow and ice.

Black Carbon47


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Based on the research andconsultations done for this study, wehave identified seven challenges toachieving more sustainable freighttransportation in North America:

1 Lack of internalization of externalcosts of freight transportation

2 Inadequate coordinationamong North Americantransportation agencies

3 Lack of integrated land-use andfreight transportation planning

4 Extensive delays in truck freightmovement across borders

5 Time needed for turnover of

inefficient legacy truck fleet

6 Inadequate funding oftransportation infrastructure

7 Absence of essentialtransportation data

Failure to address these challengeswill mean accepting increasingfreight transportation-related CO2emissions due to road congestion,excessive vehicle idling, empty vehicle

backhauls, poor matching of freighttransport modes, burning of high-carbon fuels, excessive trip lengths,inadequately trained drivers, andmany other reasons for inefficien-cies that lead to an increase in fossilfuel usage.

3.4.1 Lack of internalizationof external costs offreight transportation

Freight transportation results inseveral types of externalities not

priced in the market (e.g., air pollu-tion, greenhouse gases, land use, andhabitat loss), as well as other typesof externality that need to be takeninto account when new technologies

are introduced to the market (see textbox on new truck technologies). It isbeyond the scope of this report toassess the pros and cons of all freighttransportation externalities and dif-ferent externality pricing and othermechanisms that might address them.We note, however, that freight trans-portation would be affected by thesemechanisms if, as and when they areimplemented in North America.

Our focus in this report is on GHGs(primarily CO2) as an externality.

It is also beyond the scope of thisreport to weigh the merits of variouscarbon-pricing instruments proposedto result in lower CO2emissions,but brief mention is made of carbonpricing as it is promoted by manyadvocates of sustainable transporta-tion as potentially the most effectivepolicy tool to accomplish GHG emis-sions reduction goals in this andother sectors.

Carbon pricing using a carbon taxor a market-established price on emis-sions in excess of a regulated cap cangenerate investment flows for low-carbon technologies and activities.49The carbon price that is establishedas a result of a tax or cap-and-trade

system creates an incentive to reducecarbon emissions, either throughincreasing the efficiency of the use ofan existing energy source or throughsubstitution of low-/no-carbon emis-sion sources. The expectation is thatcarbon pricing will generate invest-ments in technologies or activitiesthat have lower carbon emissionsthan business-as-usual.

An effective price on carbonemissions will promote investmentin low-carbon freight transportation;

however, many experts and freighttransportation stakeholders alsobelieve that a portfolio of policiesis needed to attract the significantinvestments required to make thetransformation to a low-carbontransportation system.

3.4.2 Inadequate coordinationamong North Americantransportation agencies

Attempts have been made in the pastto establish a forum for routine meet-

ings of Ministers of Transportationand senior officials of the three NAFTAcountries. The Ministers last met in2008 and issued a declaration com-mitting to closer collaboration:

48 National Research Council, Transportation Research Board, Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles,2010, Committee to Assess Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles, Summary, pp. 56.

49 Note: Information for this section was drawn from: Carbon Pricing, Investment, and the Low-Carbon Economy: Policy Brief, Sustainable Prosperity, University ofOttawa, June 2010, .

Indirect Effects andExternalities of NewTruck Technologies48

A number of indirect effectsand unintended consequencesassociated with regulationsaimed at reducing fuel consump-tion in the trucking sector canbe important. In particular,regulators should considerthe following effects in thedevelopment of any regulatoryproposals: rate of replacementof older vehicles (fleet turnoverimpacts), increased tonne-kilometers shipped due to thelower cost of shipping (reboundeffect), purchasing one class ofvehicle rather than another inresponse to a regulatory change(vehicle class shifting), environ-mental co-benefits and costs,congestion, safety, and incre-mental weight impacts.


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grew twice as fast as the number ofsingle-unit trucks over this period.Of the millions of trucks on the roadtoday, most of the engines are stillpre-2007 (the first model year fortrucks with new emission controltechnologies that make use of theEPA-mandated, ultra-low-sulfurdiesel). Only about 200,000 new truckengines are sold every year, and theUS EPA says it will likely take until2030 for all the trucks on the road tohave green engines.55

Turnover of inefficient railtechnology also takes consider-able time. The typical service life forAmerican locomotives and freight cars

is about 40 years.

3.4.6 Inadequate fundingof transportationinfrastructure

Policy makers are familiar with thejob boost associated with transporta-tion infrastructure investments. In theabsence of a comprehensive visionand plan for sustainable transporta-tion, stimulus funding may prompt therebuilding of inefficient infrastructure,thus locking in a high fossil energyuse transportation system for decadesinto the future.

The need for increased fundingand new funding mechanisms hasbeen advocated by the US NationalSurface Transportation Policy and

Revenue Study Commission, which

called for a significant increase inpublic funding to keep America com-petitive. The Commission called forpricing of the transportation systemthrough road tolls, and for the use ofpolicy tools that encourage more pri-vate investment. Chokepoints at majorgateways and trade corridors werealso recognized as environmentalhotspots and potential trade barriers.Simply raising the federal fuel tax andputting more money into the sameprograms was not considered to beacceptable by the Commission.56

The challenge of an equitablepolicy solution to infrastructurefinancing will be exacerbated by

ever-increasing fuel efficiency and

The El Paso region continues to face serious air qualitychallenges, particularly due to the large number of trucksthat circulate between Ciudad Jurez and El Paso.Following the implementation of the North American FreeTrade Agreement (NAFTA), trade between the UnitedStates and Mexico increased substantially. Northboundtruck movements through Ciudad JurezEl Paso gatewaysgrew from fewer than 600,000 per year in 1994 to morethan 700,000 per year in 2004, and the number of truckscrossing the US-Mexico border is expected to continuegrowing, creating higher congestion levels and increased

emissions. The northbound movements of trucks (importinto the United States) in particular create long waitingtimes in the border locations due to several security andsafety inspections that occur during the process.

The analysis of the creep idling and idling times leads tothe conclusion that Section 1 of the northbound trip, whichincludes travel trough Mexico Customs and the actualbridge crossing, resulted in approximately 50% of the timethat trucks idle or move at a very low speed. In the secondportion of the trip (Section 2), on average more than 75% ofthe trip is spent idling or creep idling due to low speeds as aresult of congestion and various inspections. Section 3involves the state safety inspection process, whichresulted in just over 40% of creep idling and idlingoccurring at the BOTA (Bridge of the Americas) crossing.

Note:Normal idling occurs when the vehicle is at a total standstill, whereascreep idling occurs when the vehicle is moving at a speed less than 5 mphand has an acceleration or deceleration less than 0.5 mph/sec.

Truck Idling Emissions at the El PasoCiudad Jurez Border Location57

55 Stephen Blank and Barry E. Prentice, Greening North Americas Trade Corridors, slide deck presentation at the 43rd Annual Conference of the CanadianTransportation Research Forum, 2009.

56Transportation for Tomorrow, Report of the National Surface Transportation Policy and Revenue Study Commission, Volume 1, Recommendations, December 2007,, p. 1.

57 Josias Zietsman, Juan Carlos Villa, Timothy L. Forrest, and John M. Storey, Mexican Truck Idling Emissions at the El PasoCiudad Jurez Border Location,Texas Transportation Institute, November 2005, Executive Summary, pp. viiviii.

BORDER REGIONS HAVE BECOME AN INCREASING SOURCE OF FREIGHT-RELATED GHG AND

CRITERIA POLLUTANT EMISSIONS DUE TO BORDER DELAYS AND RELATED TRUCK IDLING.


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the uneven impacts of heavy-dutytrucks versus passenger vehicles onroad maintenance. To the extent thatbroad-based gas taxes are currentlydedicated to road maintenance inthe US, a response to continuing fuelconservation measures, includingvehicle electrification, may beto increasesuch taxes and fees,elevating the debate on the sub-sidization by personal vehicles ofinfrastructure maintenance.

Rail freight infrastructure invest-ments are predominantly determinedby private corporations and, as illus-trated previously in Figure 8, for theUS, capacity constraints may occur in

the near future if significant additionalinvestments are not made.

The challenge of financing newtransportation infrastructure invest-ment is daunting. A paper issued bythe National Chamber Foundation ofthe US Chamber of Commerce esti-mated that by 2015, the cost just tomaintain US pavements, bridges, andtransit infrastructure would amountto $295 billion. To improve thesesystems would cost $356 billion.

The report concluded that the totalcost to improve the entire transpor-tation system for the period from2005 to 2015 would be $3.4 trillion,but that total revenue would only be

$2.4 trillion, leaving a cumulative gapof approximately $1.0 trillion.59

3.4.7 Lack of essential freighttransportation data

Transportation is one of the majorcontributors to GHG emissionsin North America. However, theproportion of emissions that canbe attributed to the movementof freight is not accurately docu-mented. The absence of sufficient

evidence to support policy makinghas hindered progress towardsmitigation of emissions from freighttransportation modes.60

58 See .59 Stephen Blank, with Malcolm Cairns, Drivers of Change: Envisioning North Americas Freight Transportation System in 2030, Working Paper No. 7, North American

Transportation Competitiveness Research Council, August 2008.60 Juan C. Villa and Annie Protopapas, Sustainability and Freight Transportation in North America: Foundation Paper, Texas Transportation Institute, The Texas A&M

University System, College Station, Texas, March 2010.

The Interchange is a forum established in 1991 for theexchange of information and the initiation of collaborativeactivities among the transportation and statistical federalagencies in Canada, Mexico, and the United States. Itsmission is to raise the general awareness of and improvethe quality, relevance, and comparability of transportationdata and information in North America. The overarchinggoal of the Interchange is to promote and develophigh-quality, relevant, comparable data and analysis thatprovide information necessary for an efficient and fullyintegrated transportation system for North America.

One of the key results of the Interchange was thetrilateral development and release of the North AmericanTransportation in Figuresreport in 2000. Canada, Mexico,and the United States have updated this information asinputs to the North American Transportation StatisticsDatabase, which supplies public access to relevant, timely,and comparable transportation indicators forNorth America, released in September of 2004. The leadagencies for the Interchange are the US Census Bureau,US Army Corp of Engineers, US Department ofTransportations (DOT) Bureau of Transportation Statistics(BTS), Ministry of Communications and Transport (MX),Mexican Institute of Transport, National Institute of

Geography and Statistics (INEGI), Statistics Canada, andTransport Canada.

There are four working groups as part of the Interchange: North American Transportation Statisticsworking

groupdeveloping a core set of comparable and timelytransportation performance measures forNorth America and the inclusion of these in an onlinedatabase developed by Mexico.

Maritime and Tradeworking groupdealing withvessel and port classification issues and consistency inthese for North America, customs issues, trade datareconciliation, and support of maritime data needed forthe online database.

Environment and Energyworking groupdevelopinga comparable set of indicators in environmentand energy as they relate to transportation acrossNorth America, and the exchange of best practiceand program updates.

Surface Transportationworking groupfreightsurveys and collection approaches in North America,and the expansion of these across all three countries;measurement of border delays and efficiencies, hazmatfreight issues, North American geospatial data, andNorth American passenger travel data.

North American Transportation Statistics Interchange (NATS-Interchange)58


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Better-quality data, evalua-tion frameworks, and indicators arerequired to develop and shape poli-cies, as well as to analyze impacts,assess strategic initiatives, and makeinformed decisions. Currently, theonly coordinated effort to collect anddisseminate transportation informa-tion at a North American level is beingcarried out by the North AmericanTransportation Statistics Interchange(NATS-Interchange). NATS-Interchangeis a coordinated effort to shareinformation on how each countrycollects, analyzes, and publishestransportation data. The Interchangeproduct is an online database thatcontains data already collected andpublished by government agenciesin each of the countries, and that are

comparable for publication (includingtechnical notes to explain differencesin methodology).

This study observes that statis-tics prepared by NATS-Interchangedo not cover with sufficient detailthe information required on freighttransportations broader impacts onsociety, such as pollutant emissions,GHG emissions, and sustainability ingeneral. Data-gathering authoritiesare focused on national priorities, andthe tables and indicators provided

by the Interchange are built from

different methodologies and defini-tions. As a result, there are limitationson the comparability of the data,as well as on the type of trilateraltables and/or indicators that can bemade available.

The US National SurfaceTransportation Policy and RevenueStudy Commissio

Destination Sustainability Reducing Greenhouse Gas Emissions From Freight

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