Edge 1 Winter 08

EDGE issue#1/06.08_0�

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THE JOURNAL OF JACOBS CONSULTANCY,TRANSPORT AND INFRASTRUCTURE

also in this issue

Carbon foCus:

The importance of sustainable transport

HigH speed rail: is this really the answer to

increasing passenger demand?

EnvironmEnt or

Economy Is it a

choice?

0�_EDGE The Journal of Jacobs Consultancy, Transport and Infrastructure

THE JOURNAL OF JACOBS CONSULTANCY,TRANSPORT AND INFRASTRUCTURE

Environment or economy – is that the choice we have to make? It need not be so. While some commentators suggest that financial challenges will undermine plans for ambitious action on climate and the environment, the reverse is possible: the simultaneous occurrence of financial and environmental crises offers a fundamental opportunity to lay the foundations for a new form of sustainable growth that can transform our economies and societies.

Reflecting our broad expertise in transport and infrastructure, the following articles address the challenge of integrating both economic and environ-mental considerations in developing solutions to some of the major issues facing road, rail and air transpor-tation. By examining the case for (and against) high speed rail systems; the effects of aviation fuel pricing; airport design and energy usage; innovations in carbon emission reduction; and the effectiveness (or otherwise) of congestion charging, this issue of Edge proves that the environment and the economy are not mutually exclusive.

Through Edge we aim to give you access to research conducted by our economists, planners and financial analysts. The articles are written by our leading thinkers and we hope this and future issues will provide a useful and insightful platform for debate on the practical means of achieving sustainable growth. We believe that creatively addressing these issues is especially important as we face simultaneous economic and environmental challenges. And we hope you share our concern. Each article includes email addresses for our expert authors; please contact them for more information or to take up the debate.

For information about Jacobs Consultancy, contact Nick Davidson, Vice-President [email protected]

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Prague, Czech RepublicJacobs Consultancy spol s.r.oZlatnická 10/1582110 00 Praha 1Czech RepublicTel: +420 251 019 231Fax: +420 224 810 799

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New Delhi, IndiaJacobs Consultancy, a Division of Jacobs Engineering India Private Limited242, Okhla Industrial Estate, Phase IIINew Delhi, 110 020, IndiaTel: +91 (0)11 2684 6500Fax: +91 (0)11 2631 1747

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Bologna, ItalyVia De’ Pignattari, 1Palazzo dei Notai40124 - BolognaItalyTel: +39 051 22 30 61Fax: +39 051 23 82 56

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04 Aviation fuel prices We look at the problems airlines face with rising fuel costs.

07 High speed rail debate Is a new high speed rail network really the answer?

11 Passenger driven terminals We consider the role of the customer in airport design.

14 Carbon focus Drastic action is needed to lower carbon emissions.

18 Airport diversification Why airports should be investing in renewable energy sources.

21 Congestion charging Combating congestion: approaches from around the world.

Published by:© 3Fox International Limited 2008. All material is strictly copyright and all rights are reserved. Reproduction in whole or in part without the written permission of 3Fox International Limited is strictly forbidden. The greatest care has been taken to ensure the accuracy of information in this magazine at time of going to press, but we ac-cept no responsibility for omissions or errors. The views expressed in this magazine are not necessarily those of 3Fox International Limited or Jacobs Consultancy.

Images: David Fernandes, David Gray, Terry Hawes, Shutterstock, SXC.

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Airlines around the world saw their fuel bills spiral out of control in the first half of 2008 and oil prices have been highly volatile throughout the year. This situation has a significant impact on the profitability of carriers and new models of business must be put in place if they are to retain their ability to compete. By Tom Walsh, Director, from original material by Linda Perry, Associate Director.

FUEL FOR THOUGHT

The most recent International Air Transport Association (IATA) forecast for the world’s airline business (September 2008) expects fuel to account for 40% of

airline budgets in 2009, up from 36% in 2008 and an enormous increase on the 10% share back in 1998. The business models for many airlines, especially in the USA, were designed for oil prices of around $65 per barrel. The situation in mid-2008 when the price peaked at $147 was new and worrying territory for air travel operators. As Richard Anderson, CEO of Delta Airlines, said in the summer, “You can’t underestimate the spike in fuel prices and how it is fundamentally changing the industry.” While oil prices have fallen in the second half of 2008, the consensus remains that economic growth, when it resumes, will inevitably cause all energy prices to rise significantly. Price volatility in the short-term and rising prices over the longer-term together create many difficulties for the traditional airline business model.

CHaLLEnGEsJet fuel prices follow the crude oil trend very closely and it has been a rollercoaster ride during 2008. Particularly damaging for airlines has been the fact that fuel costs rose at the same time as global passenger growth started slowing. IATA believes its member airlines will suffer a collective deficit over two years as high as $9.3 billion – broken down

that equates to $5.2 billion in 2008 and $4.1 billion in 2009. If, as some analysts believe, passenger numbers actually fall next year, then the level of losses will be even worse. The pressure has already started to put airlines out of business – over 25 of them between January and August 2008. Market conditions have therefore become bleaker than in recent memory. Giovanni Bisignani, the director-general at IATA, describes the situation: “The toxic combination of high oil prices and falling demand is poisoning the industry’s profitability.”

Fuel costs have risen dramatically before, of course. An ‘oil price shock’ is defined as a 50% or more increase sustained over at least four quarters and, since 1970, there have been four such events. In 1974 OPEC’s politically inspired cutback in production caused prices to more than double. Airline deregulation and the Iranian revolution coincided to bring about the rises of 1979-1981. Then, from 1998 to 2000 the cost of crude oil went up two-thirds as a result of further OPEC cutbacks. All three of these earlier shocks created big problems for

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airlines, but, unlike the present situation, they were relatively short-lived and prices fell and then steadied after each spike. The dramatic fuel cost rise during the first half of 2008, however, followed steep and steady increases in oil prices since 2004. The underlying reason appears to be a change in market structure rather than, as before, temporary distur-bances. Oil supply and refining capacity have not kept pace with growing demand, notably from China and India. Such a situation cannot easily be rectified in the short-term, so airlines have to face a future of high fuel costs over a longer period than previously experienced.

Prolonged high fuel prices pose a particular problem for airlines not just because of the high proportion of operating costs, but because airline profitability is historically fragile. The chart on the previous page tracks net annual profit of US airlines against the fuel share of their operating costs (1970 to 2007). It shows how low profit levels can quickly turn into deep losses. The timeline shows the fuel cost share at just below 30% in 2007. Living with a level of 40% is going to be very hard.

sOLUTiOnsOne longstanding technique that has been much deployed recently is to use hedging to lock in the prevailing price for future deliveries of jet fuel. Southwest Airlines in the USA has reportedly hedged 70% of its fuel costs for 2008, while British Airways and Lufthansa have taken out contracts for even higher proportions. Fuel hedging however, has significant upfront transaction costs and, like all such trading, runs the risk of future prices falling. Currency rates are also a hazard, though European airlines will this year have

benefited from the relative strength of the Euro against the US dollar.

Apart from trying to buy fuel at the best available price, airlines can also reduce their costs by improving their fuel efficiency. In this respect, as the chart below shows, they have a good historical performance on their side. Data from US airlines for 1970-2007 reveals a steady and ongoing improvement in passenger miles per gallon of fuel consumed. US airlines continue to retire older aircraft such as the DC-9 and A300 and replace them with more fuel-efficient jets. European carriers are doing the same, by also trying incremental technology changes such as winglet refits for existing aircraft. All operators are looking hard at their routes and cutting out those with thin demand. Short-haul flights in Europe are especially vulnerable to cutbacks because of the success and growth of the high speed rail network.

Improving efficiency is being accompanied by a wide variety of techniques to increase revenues, wherever possible. After years of reductions and the inexorable growth of low-price airlines, fares are on the rise. Fuel surcharges are commonplace, with US carriers expected to impose an average of $50 per round trip on domestic flights and international flights attracting surcharges of up to $250. European-based airlines such as Lufthansa and British Airways introduced surcharges on a monthly basis through the summer of 2008 and the trend is not diminishing despite falling fuel prices.

Baggage fees have long been a feature of low-cost carriers such as Ryanair, but they are now being introduced by mainstream airlines. Similarly, many operators are either bringing in

or increasing their charges for priority seating. All airlines can be expected to find ways of charging for as many services and facilities as they can. In this respect, of course, they will be matched by airport operators, who are also facing higher costs at the same time as flight and route reductions are hitting their revenues.

Lastly, however successful individual airlines are in reducing costs and increasing revenues, a solution for many will be mergers and acquisitions. Bigger networks exploit cost synergies, as is being shown by Air France/KLM in Europe and Delta/Northwest in the USA. Political factors and anti-trust legislation can make it difficult for some carriers to consolidate their operations. But with airlines going out of business and fuel prices staying high, the case for appropriate mergers and acquisitions will become stronger and more difficult for governments to refute.

Volatile fuel prices for the foreseeable future will have profound effects on the global airline sector and the sustainability of many carriers would certainly be threatened if operating costs were to return to the level of the spike in summer 2008. On the positive side, the air travel business has coped in the past with other drastic changes. The past 15 years have seen airline deregulation, low-cost competition and increased aircraft costs. There have also been, apart from oil prices, external shocks from war, terrorism, and health scares. But air travel remains on a long-term growth trend and, even if its cost stays higher than in the past, passenger numbers will rise again. With the right strategies, airlines can succeed in meeting their demand. ❑

Contact Jacobs Consultancy to discuss the issues raised here: [email protected]

The sustainability of many carriers is certainly threatened if operating costs return to the level of the spike in summer 2008

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tHe greater goodFaster for few, or better services for many? The case for high speed rail in the UK is not as straightforward as it might seem. By Mike Lampkin, Director.

continued overleaf ➸


Rail travel is now widely accepted to have sustainability advantages over other modes of transport. The main reason is concern about climate change and

the consequent need to reduce carbon emissions, but rail in the UK has also been boosted by the success of the high speed Channel Tunnel link. Many commentators are urging support for a new high speed line on the UK mainland network and they claim its economic gains would substantially exceed the construction cost.

At first glance, such a scheme does appear to have many advantages. Recent reports, including those by Greengauge 21, conclude it could improve north-south travel times, enable a shift to public transport and spark regeneration in lagging towns and regions along the route. There is also the background of rising rail use in the UK.

Passenger numbers have soared by 40% in the past decade – the 1.13 billion journeys made in 2007 were the most since 1946, when the network was twice its present size. Rail freight has increased even more, with tonnage up 60% since 1997. Long-distance rail travel has grown by one-fifth in just the past three years and passenger numbers on the West Coast Mainline alone are forecast to double between 2006 and 2026. If demand continues to rise at recent rates, Network Rail say many lines in the UK will be full to capacity by 2025.

HigH speed means HigH costsBut before we all get carried away by the glamorous prospect of new high speed lines, it might be better to pause and consider whether we can really afford the investment. Railways are expensive items and the cost would be huge, perhaps even unaffordable.

Besides the substantial physical construction of the route, the cost of all the necessary equipment, both lineside and rolling stock, is significant. Then there is the planning process. Heathrow’s fifth terminal took eight years from first application to government approval and the inquiry alone took 524 days to hear 700 witnesses and go through 100,000 pages of transcripts. That inquiry cost £80 million and it could prove to be a simpler proposition than agreeing a new rail route running the length of Britain.

There are also environmental costs. Rail supporters highlight the benefits of road and air traffic reduction and improved air quality, but there are downsides if the new line damages landscape, biodiversity and heritage assets. Britain is a crowded island and a new route would have adverse effects on people, buildings and landscapes. If the line only has limited stops, then many of those affected

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would not directly experience the associated benefits. Inescapably, there will be winners and losers, and there could well be more of the latter.

are tHe benefits wortH it? Ratcheting up costs even further is the fact that the ‘easy wins’ in increasing rail capacity have mostly been taken already in the UK. Unlike the SNCF’s TGV projects in France, where space for development is cheaper and more easily available, new railway lines serving British cities will be much more expensive. They will have to run through the Home Counties and suburbs into new terminal capacity in London. New infrastructure is needed in the centre of London and other route cities to entrain and disperse passengers and possibly freight. The Channel Tunnel link showed clearly how high costs can go when you have to build in city centre

locations, especially with tunnels.High speed supporters claim a new rail

line will improve journey times, attract more passengers (especially from air) and increase capacity. But even if these prove true to some extent, there are still two key questions that need answering. Is speed really so important? And is a high speed line the best answer to the capacity problem?

One thing is clear. Rail users do not actually rate speed as a significant priority. According to the National Passenger Survey conducted by Passenger Focus, they are much more concerned with punctuality of trains and overcrowding. This is not surprising when you consider that one of rail’s key advantages, especially over car travel, is that the time spent travelling can be put to effective use. Provided the train is on time and not too crowded, the journey is an opportunity to work, relax, eat and drink. Mobile technology

such as Wi-Fi brings even more such opportunities for rail travellers. Interestingly, these time-use advantages are not taken into account by conventional economic appraisals undertaken to date.

In addition, a real assessment also has to consider that the in-vehicle time for a train journey is only one component of a passenger’s overall trip. Most inter-urban rail journeys will include at least an extra hour travelling to and from the main station and waiting for the train. Higher speed on the main journey, therefore, must be seen in the context of the time required for the whole trip.

The question of capacity is perhaps even more important than the question of speed. There are many practical alternatives to a dedicated high speed line that can provide much additional capacity at a considerably lower cost. Targeting capacity, where it is needed, and focusing on bite-sized

Rail users do not actually rate speed as a significant priority. They are much more concerned with punctuality and overcrowding

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HIGH SPEED RAIL:UK passenger numbers have gone up 40%

in the past decade1.13 billion journeys were

made on UK lines in 2007

Rail freight tonnage has increased by 60% since

1997Network Rail says many UK lines will

reach capacity by 2025

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010_EDGE The Journal of Jacobs Consultancy, Transport and Infrastructure

chunks of the rail network would probably be more affordable and manageable than concentrating on one high speed line.

There are several schemes identified and costed that can help in this respect. A capacity improvement of 20% on the London-Dartford route, for example, could be made by spending £57 million on longer platforms and increased power supply enabling 12-carriage trains. Another feasible project, costing £412 million, would remove capacity constraints on much of the East Coast Mainline by speeding up timetables, increasing train numbers and improving freight access between Finsbury Park, Peterborough and York. More generally, across all existing inter-urban routes, capacity could be greatly improved by using longer trains (12-13 car rather than 4-car Voyagers) and optimising timetables (more trains per hour). Track utilisation on inter-urban lines can be maximised nearer the level of commuter routes. Bottlenecks such as those regularly experienced at Milton Keynes and Reading can be helped by enabling parallel-platform working. Above all, these alternatives mean focusing expenditure where it will bring the most benefits. Such practical solutions achieve both economic and environmental benefits.

tHe real capacity problemThe main capacity issues occur not on the lengths of plain track connecting cities, but on the approaches to them and at their main stations. The infrastructure in these locations has to be shared with many other local services and this is particularly the case in London. It should be remembered that more than two-thirds of all UK rail journeys originate and end in London. Regional transport authorities are all keen to enhance the frequencies of their local services, thereby exacerbating the capacity squeeze on inter-urban routes.

Urban capacity problems are best solved by local schemes focused on the inner approaches to cities. Such schemes target the extra capacity where it is needed and can provide additional longer distance services on the existing network. They do not need to be propped up by city-centre distribution measures, since they are actually providing this function themselves.

This strategy may not improve train speeds, but it does help reduce the station access component of passengers’ journeys. Perhaps most important of all, new urban rail routes provide much more capacity than high speed lines. The relevant comparison is between hourly services of up to 30 normal trains, each carrying 1,000 passengers, against 12 high speed trains, each with only 500 passengers.

Numerous examples exist of urban schemes that target capacity increases at terminal stations and their approaches. There are heavy rail schemes such as Thameslink and Crossrail, as well as conversion schemes such as Manchester’s Metrolink that change routes from rail to tram. The Cathcart Circle project in Glasgow, if implemented, is another example of the conversion approach. There are also intermediate schemes such as the Tyne & Wear Metro and Merseyrail. Alternative light rail schemes using ‘tram-trains’ have special advantages, allowing trains to leave the heavy rail network before the terminus approach and use street running to either access the city centre or pass through to rail routes on the other side.

tHe network is tHe priority It can of course be argued that not all the increased demand for urban rail travel is economically or environmentally beneficial for the country as a whole. There has been a huge surge in long-distance commuting around London in the past 15 years, caused partly by planning issues and house price differentials, but also by a pricing structure for season tickets that is no longer appropriate. If these long-distance fares were increased to help pay for new rail infrastructure, it would help redistribute passenger demand and reduce both commuting trip lengths and the

The main capacity issues occur not on the lengths of plain track connecting cities, but on the approaches to them and at their main stations.

longer-term capacity requirement.High speed rail is an extremely long-term

investment. It has recently been estimated that the cost of a full West and East Coast high speed rail network would be £31 billion. Private sector funds will be hard to attract, especially in present circumstances, and much of the burden would fall on a reluctant treasury. It has to be concluded that there are many other rail schemes that would help solve the key problem of capacity at lower cost. Those improving rail access to city centres and at key nodes on the existing network are likely to prove the most suitable and manageable. Such schemes may be individually less substantial than a high speed line, but that new line would itself require improvements to the existing local network to allow access to the route. The first priority has to be to improve capacity and services across the existing network. It is understandable that high speed rail has strong supporters, many of them romantics and visionaries. But the more attention that is paid to their proposals, the more distraction there is from the fundamental needs of the whole network. The realistic view for the benefit of most people is that speed should be afforded a lower priority. ❑

Contact Jacobs Consultancy to discuss the issues raised here:[email protected]

Shiny new airport terminals are opening around the world. But while some offer an experience of functional 21st century design, others are still making the mistakes of yesterday. By Gordon Hamilton, Managing Director.

attention to detail



Air travel growth has brought about a flurry of new and expanded terminals around the world, but all too many of them still do not meet the needs and

wants of air passengers. Too often, terminal design appears to be more about making an architectural statement than satisfying even the most basic requirements of their millions of users. This lack of attention to passengers raises stress levels and causes ongoing problems in traffic handling and amenities management. The result, of course, is to raise costs and produce lower than optimum revenues for airport operators. Design that ignores passengers always ends up being bad for business.

The world’s airports are an enormous business and, despite the current difficult economic conditions, traffic continues to grow year on year. The International Air Transport Association (IATA) forecasts that global passenger numbers will rise by over 3% in both 2008 and 2009. The Airports Council International (ACI), whose 1,600 member airports are the world’s busiest, reported no less than 4.8 billion passengers and 77 million aircraft movements in 2007. Larger planes mean that movement growth is rising less than passenger numbers, but the important trend is that all major airport terminals have to process a growing number of people.

The basic requirements of terminals for passengers are well understood and documented. IATA’s comprehensive Airport Development Reference Manual lists five essentials: simplicity of flows, good wayfinding, minimal queuing, well-sited food and shopping facilities and, last but certainly not least, adequate space and seating. Simple enough needs, one might think, but there have been many terminal developments in the past five years that do not even meet IATA’s seating requirement for 70% of planned peak hour demand.

CUStoMeR SatiSFaCtionPassenger wants are more subtle than their needs, but meeting them will go a very long way to ensuring a terminal is highly rated by its users. The annual Skytrax survey ranking customer satisfaction with the world’s airports makes interesting reading in this context. The top four airports in the 2008 survey are all in the Far East (Hong Kong, Singapore, Seoul and Kuala Lumpur), but not a single airport in the USA (home to more airports than any other country) made it into the top ten. New terminals have recently been built at all the winning airports, but they have also been appearing across America. London’s

Heathrow, where the recent opening of Terminal Five was plagued with problems, is nowhere in the rankings. What passengers want, it seems, is much more complex than just a modern building. Important features will include food facilities, baggage delivery, security processing, duty-free shopping, terminal cleanliness, leisure amenities and friendly staff.

Sometimes determining what passengers want is as easy as asking them. Jacobs Consultancy has been closely involved with the continuing development of Norman Manley Airport in Kingston, Jamaica. A large sample of passengers there gave a strong preference for the new terminal to reflect Jamaican culture and this was used to guide both architects and concession planners. Such survey information is of immense use, but its input has to be early on at the design and planning stage. Passenger surveys also need to go well beyond the typical questions about satisfaction with concessions such as shopping and food. Passenger responses should be identified across the full range of services and facilities in a terminal. These include airline services such as check-in and baggage handling and government services such as security, customs and immigration.

A particularly important feature of recent passenger surveys undertaken by Jacobs Consultancy for clients in North America and Europe has been the strong desire for stress reduction. It is a sad necessity of our times that airports have become high security environments and the whole enplaning procedure can be long, stressful and sometimes unfamiliar for travellers. Anything that can reduce stress will be warmly welcomed and this can apply to the design of the terminal as well as its facilities and services. Passengers respond well to a calming ‘club’ atmosphere encouraged by warm colours, soft furnishings and green plants. In contradiction to these wants, the contemporary architectural language of airport terminals is all too often a clinical style of bright white spaces and stainless steel.

Features and improvements that build up the pleasure and excitement of air travel will also always be a good idea. Travel is still an adventure for many passengers. The large Solari Board flight information system at Frankfurt Airport is an example of this approach, reinforcing the concept of airport as gateway to the world.

SUCCeSSFUl deSiGnHow can passenger needs and wants be translated into successful terminal planning and design? Jacobs Consultancy’s

Anything reducing stress will be welcome – this can apply to terminal design, facilities and services

IATA forecasts global

passenger numbers will rise by

3% in 2008 and 2009The ACI reported 4.8 billion

passengers in 2007The USA has more airports than

any other countryThere are 49,000 airports in the world

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experience suggests that three proven steps are required. First of all, there has to be a clear statement of operational requirements and it has to be signed up to by all parties, not least the relevant government agencies. One such basic requirement would ensure that planning, design, staffing and operation are all suitable for a specific volume of peak hour international arrival demand. Secondly, a complete space and system programme has to be established and agreed before even the preliminary terminal design is prepared. This programming must follow industry best practices, including the IATA Manual’s baseline specifications. The third step is to appoint a ‘passenger and concessions champion’ right at the start of development. This person’s role is to focus on how to integrate passenger satisfaction into the design process. Satisfying passengers with the facilities and services they want will, almost without fail, have the happy result of maximizing revenue from the concessions.

When planning and design are properly passenger-driven, terminals tend to exhibit similar and successful features. One of the most important is a significant shift of volume and activity airside of the security process. When the greater majority (70-90%) of the

food and concession area is shifted post-security, passengers are more relaxed and also have more time to spend their money. Seattle-Tacoma Airport is proving a good model of this approach. Its central terminal, handling over 30 million travellers a year, has four concourses and two satellites, yet there are only three security checkpoints and, once through security, passengers have access to all the gates.

Passenger information systems constitute another key feature. Inbound passengers need information about concessions and facilities available, plus assistance on what to expect when they return to the airport to depart. All travellers need easy access to clear information on flights and timelines. Then the information boards themselves can help give the terminal a strong sense of place, along with other crucial features such as comfortable furnishings and relaxing colour schemes.

A successful terminal also has to respond to future requirements and challenges. In this respect it helps to have a deeper than normal core area both landside and airside. Security may need even more space in future and there will also be different space requirements as self-service check-in becomes more

common. Then the terminal must cope with developments in aircraft size and type. Future flexibility will be at least as important as the ability to satisfy current demands.

The single most important lesson of successful terminal development, however, is ensuring the commitment of all major stakeholders (airport owner, airlines and government agencies) to meet the level of service standards agreed at the programming stage. Changing the goalposts at later stages will not work with a project as complex as a modern airport terminal. Getting it right for passengers is fundamental. Successful terminal design and operation are vital for air travel and will become even more important in the future. The world already has the staggering total of 49,000 airports, so there is no shortage of work to be done. ❑

Contact Jacobs Consultancy to discuss the issues raised here: [email protected]


CARBON CRUNCH

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The worldwide focus on cutting carbon emissions is nothing new. But as time goes by, the need to go from meaningful discussion to successful implementation becomes ever more urgent. By John Palmoski, Principal Consultant.

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In December the UN’s Climate Change Conference in Poznan will outline a new structure to replace the Kyoto Protocol. Kyoto was adopted back in 1997 and a more coherent and stringent approach

on climate policy is now likely to emerge, not just because of the influence of new US President-elect Barack Obama but also because there is a growing international consensus on the need for change.

Future economic stability and growth will depend on how organisations adapt to the changes. There is evidence already of an increasing responsiveness to carbon dioxide reduction obligations, driven by regulatory obligations, financial concerns and the need to meet corporate social responsibility targets. Organisations are reducing their emissions by using renewable energy, improving workplace efficiency, consuming less and encouraging staff to travel by sustainable transport.

Travel Plans have successfully reduced vehicle movements and carbon output. But government policies have not as yet given substantive focus to the carbon reduction benefits of Transport Demand Management (TDM). Similarly, most organisations could do more to link their Travel Plans to their carbon reduction strategies. A clearer connection is needed if transport policy for more sustainable travel is to succeed. Additionally, a case needs to be made for the benefits of integrating Travel Plans with other strategies into a successful Carbon Reduction Plan.

tRAvel demANd mANAgemeNt ANd tRAvel plANsTDM has been a mainstay of transport and land use planning in the UK since the mid-1990s. Developed in the USA, its traditional uses have been planning compliance,

congestion reduction and better parking provision, as well as prompting healthier lifestyles for staff and reducing the environ-mental impact of transport. TDM focuses on four areas: physical changes like cycle lanes, traffic calming and improved public transport; legal measures including bus priority, parking management and planning constraints; economic measures like road pricing that make car use more expensive compared with sustainable transport; and, fourthly, information and education to show the benefits and opportunities of sustainable travel.

The effective use of TDM brings positive social, economic and environmental benefits (including carbon reduction) and Travel Plans are among the most popular tools for delivery. The main aim is to reduce car use, especially in single-occupancy, and it works through ‘Smarter Choice’ measures such as better bus services, tighter parking controls, improving cycling/pedestrian facilities and encouraging car sharing and the use of car pools.

Research suggests that Travel Plans can achieve an average 18% mode shift from cars in transport to and from specific sites. Their success, however, is less clearly proven on a larger scale and they have not delivered the widespread mode shift away from cars that many proponents had believed. There are several reasons why this might be so. Firstly, car culture retains its mass appeal and the transport infrastructure still favours private cars. Then there are as yet no strong imperatives on either public or corporate policy to force a switch away from cars. Politicians, experts and the media have still not reached a consensus on the carbon benefits of sustainable travel. In terms of implemen-tation, there is often a lack of enforcement of planning obligations.


the UK government, more ambitiously, wants a 20% reduction by 2010 and 60% by 2050. The two charts above show the sources of CO2 emissions in the UK (Figure 1) and the share of emissions from the UK’s transport sector (Figure 2). Homes are responsible for almost 40% of total emissions, followed by transport at 24% and business premises at 16.5%. Within the transport sector, by far the largest volume of CO2 emissions (90.1%) comes from road transport – equivalent to 21.6% of UK emissions from all sources.

Travel Plans have great potential to influence transport emissions and there is a wealth of constructive policy and empirical evidence in support of their potential for carbon reduction. Assuming substantial

forward investment in ‘Smarter Choice’ initiatives, one report has estimated Travel Plans could save 2.0-2.5 MtC (million metric tonnes of carbon) per year in the UK by 2015. Given that total UK emissions in 2005 were 46.3 MtC, this is a large-scale reduction. It would, of course, require major public and private investment, as well as the removal of the current barriers to successful Travel Plans.

FROm tRAvel plANs tO CARBON RedUCtiON plANsThe benefits of Travel Plans include reducing traffic congestion and carbon emissions, as well as the land area needed for parking. Their quantifiable CO2 reduction benefits, however, have only received minimal attention. By

Carbon dioxide is one of the fundamental environmental, social and economic problems of our time

Another factor may be that Travel Plans cannot work on their own and need to be coordinated with other social and environ-mental initiatives. One way forward might be to integrate them with other policies for reducing carbon output into a Carbon Reduction Plan. This could achieve significant mode shift by using a holistic series of processes to steadily channel all an organisation’s activities towards reducing its carbon emissions. To succeed, the organisation has to make a key paradigm shift in attitude towards TDM and all related environmental measures.

CORpORAte sOCiAl RespONsiBilityCorporate Social Responsibility (CSR) is about how businesses respond to the economic, social and environmental impacts of their activities. Many large companies produce annual CSR reports for their shareholders and, ideally, a commitment to CSR will make an organisation more sustainable. Carbon reduction, through the use of more sustainable transport, should be a significant part of CSR policy, but in practice it often plays only a minor role. Several factors could be behind this. There might be an institutional lack of awareness about the CSR benefits of Travel Plans. Other CSR issues may be considered more important and an organi-sation could simply not have the policy or legislative structures to implement transport-related carbon reduction. More fundamentally, there may be the fear that sustainable transport would prove too costly and be detrimental to both operations and margins.

CO2, tRANspORt ANd tRAvel plANsCarbon dioxide is the most important cause of climate change, one of the fundamental environmental, social and economic problems of our time. The EU target for 2010 is to reduce CO2 by 12.5% below 1990 levels and

Figure 1 - provisional 2006 UK emissions of carbon dioxide by source

Figure 2 - 2006 estimate C02 emissions from the UK transport sector Source: DEFRA (2008)

Agriculture

Waste management

Industrial process

Residential

Public

Transport

Business

Energy supply

%

0.80.12.514.61.92416.539.7

Aviation

Shipping

Aircraft support vehicles

Railways

Military aircraft and naval shipping

Railways-stationary combustion

Road

1.74.10.3

1.62.1

0.0

90.1

%

winter 08_017

n carbon focus

putting carbon reduction at the heart of Travel Plan development, their positive implemen-tation will be more likely. Policy makers need to link sustainable transport measures with other initiatives to reduce emissions and, by centralising all initiatives, create an umbrella Carbon Reduction Plan. Moving the core of Travel Planning towards a carbon focus will keep it fresh and dynamic, as well as maximising the potential for reducing carbon emissions.

For this to happen, there needs to be better understanding and coordination of acceptable policy. This could be through better regulation of carbon outputs through operational transport linked to wider reduction quotas. The concept would most likely fall within an organisation’s Environmental Management System processes and be tethered to its wider CSR policy.

tHe CARBON RedUCtiON plAN AppROACH CAN Be dRiveN tHROUgH tHe FOllOwiNg mAiN meAsURes:

RAisiNg ORgANisAtiONAl ANd iNdividUAl CARBON CONsCiOUsNessThe public now knows about global warming and carbon reduction, but there is a big need for personal travel choices to address the carbon problem. Improved marketing and communications are required to show exactly how transport choice by organisations and individuals correlate with emissions reduction.

iNtegRAtiNg CARBON tRAdiNg ANd tRAvel plANsThe carbon trading approach incentivises businesses to reduce their emissions. The ‘cap-and-trade’ scheme of the EU’s Emission Trading System is subscribed to by the UK, but currently it covers only aircraft and not cars. Incorporating the emissions reduction benefits of Travel Plans into the carbon trading system would be an important additional incentive.

mONitORiNg CARBON OUtpUts ANd RedUCtiONsThe net carbon reduction benefits of Travel Plans need to be better accounted and tabulated, along with all other emissions. This means greater integration is necessary between departments and individuals, as well as taking a more universal approach to the calculation of any staff surface travel emissions.

UsiNg tHe CARBON CAlCUlAtiONA useful way of monitoring carbon outputs is available with the new Carbon Calculator developed by Jacobs for the UK’s Environment Agency (UKEA). It was commissioned to help make decisions on the sustainability of the UKEA’s construction activities, worth £200 million in 2007-08. The built environment accounts for around 50% of all greenhouse gas emissions and UKEA is keen to lead by example and demonstrate the reality of sustainable construction. The carbon footprint of construction work, however, is more difficult to measure than the operational footprint of a working building. The innovative

Carbon Calculator is pre-loaded with information to make an accurate assessment of carbon output from construction projects, including travel-related ones.

iNtegRAtiNg AppROpRiAte stAFF ANd depARtmeNtsMany organisations keep staff involved in Travel Plans but not those aspects instru-mental in reducing carbon emissions. Work may be spread among departments such as human resources, facilities management, operations and environmental assurance. Closer co-ordination of both individuals and departments relevant to carbon reduction would be a significant aid to success.

CONClUsiONsThere is a strong case for integrating Travel Plans into the wider concept of Carbon Reduction Plans. Such a strategy provides a much better opportunity to link CO2 reduction and Travel Plans within the overall policy structure of businesses and other organi-sations. CSR would be greatly enhanced by an umbrella plan that links travel and emissions reduction. There are also good prospects for maximising synergies and efficiencies across an organisation that adopts a holistic approach to transport and carbon use.

Success, however, requires change and improvement to the current situation. There have to be stronger legislative measures than at present in the UK. TDM policy has not yet properly addressed the concept of the Carbon Reduction Plan and much of the literature on this subject is out of date and now needs refreshing. Then there is an urgent requirement for a proper cost benefit analysis of how Travel Plans can be extended to cover Carbon Reduction. This last could prove especially important, since cost is so often the main driver of policy change. Putting the focus on the costs of not reducing carbon could well prove decisive in securing a goal we all need to see achieved. ❑


winter 08_019

Amid the growing debates regarding rising fuel prices and the impact of aviation on global warming, one aspect of the multi-billion-dollar world aviation industry has received significantly less coverage – the economic role of airports and their energy use. By Cheech Ong, Associate Director.

THE CORRIDORS OF POWER

n airport diversification

➸

this respect. On the other hand, environmental and cost pressures are now encouraging airports and their tenants to reduce energy usage. A balance has therefore to be found between the commercial desire for profit, the business case for cost saving and the requirement for environmental protection.

The old model of relying on traditional contracts for electricity, gas and oil supply is no longer good enough for airports in a world of high energy prices. Diversification of energy supply is the answer, especially together with a successful programme for reducing energy use. So far it has been European airports, particularly in Scandinavia and Benelux, that have been leading the way with diversification, but there are now signs that US operators, especially on the east and west coasts, are becoming more progressive and enlightened. Airports in the Middle East’s oil producing countries are taking the issue seriously and starting to focus on renewable energy and energy efficiency.

One of the best diversifications, certainly for the longer-term, is for airports to invest in renewable energy sources. Airports lend

themselves ideally to these since they typically have lots of flat roofs and large areas of level land. These can be used for photo-voltaic generation using solar arrays on the land and panels on the rooftops. Wind turbines are also a possibility, though the height restrictions necessary at airports means they may need to be custom-designed and will not generate as much power as they can in other locations. Potentially more useful is to take the waste heat from existing central heating systems (often ageing) and convert it into power in a process called co-generation.

THE COMING BREAKTHROUGH Then there are new techniques that are becoming more economically viable with every rise in the oil price. An obvious choice for airports is fuel farms, where conventional fuel is mixed with biofuel.

There are already fuel farms in action in Europe and North America, but the breakthrough will come when the mixed fuel becomes suitable for aviation use. That offers substantial opportunities for airports to sell energy to their client airlines.

Besides processing passengers and airlines, major airports are economic hubs in their own right. They are also significant energy users and, with the increase in oil

costs, need to think much more about their energy consumption.

CHANGING TIMESThe cheapest way to save money on energy may be to use less of it, but a little appreciated feature of the airport business is that airports already rely on energy use for a considerable part of their revenues. A large airport buys electricity wholesale or directly from the grid and, with good procurement policy, can resell it on to its many concessions and airline customers. This is, in effect, a local monopoly and can provide between 2% and 9% of an airport’s income stream, depending on the level of customer demand and the charges that can be set.

The higher the use of electricity, the more potential there is for profit and the increased switch to electric vehicles (for environmental reasons) is good news for airport owners in


An important commercial goal for energy diversification is to enable airports to become energy producers as well as energy re-sellers. By using renewables and biofuels, airports can develop a profitable business at the same time as showing their environmental stewardship. Community responsibility and income generation can go hand in hand.

Energy diversification requires consid-erable investment and, especially, a long-term approach. Detailed planning is crucial from the earliest stage and the timeframe needs to be a minimum of 20 years. With such short-term volatility in energy markets, this may seem difficult, but both the investment schedule and pay-back period for major energy projects are inescapably long-term. The capital costs of energy supply and demand infrastructure are considerable and it is vital to make the right choices from the beginning.

ENERGY MASTERPLANJacobs Consultancy has been selected to develop an Energy Masterplan for a major American port authority that is based precisely on this need to evaluate energy diversifi-cation over the longer-term. This authority is a forward-thinking organisation that operates aninternational airport hosting 50 airlines with 28 million passengers a year and two other airports, in addition to maritime port facilities.

The project is centred around three themes – developing an energy procurement

strategy, managing energy demand and reducing greenhouse gas emissions. Energy diversification was a clear priority from the outset, determined by the need to protect the security and resiliency of the authority’s energy supply and to manage risks in an operating environment where conditions would change considerably over a 20-year period. Diversification is to be focused on clean renewables as well as implementing co-generation projects on airport facilities.

It became clear early on that the Energy Masterplan would have to balance business considerations with energy-saving ambitions. The authority already earns a significant percentage of its revenues through purchasing energy utilities wholesale and then selling them retail to its tenants. By becoming an energy producer, the authority can still protect these revenues while at the same time achieving the main goal of reducing electricity, gas and water consumption by both itself and the tenants. The first stage is for 15% of electricity to come from renewables by 2010 and also for using carbon offsets to make the authority carbon-neutral by the same time.

Jacobs Consultancy has applied a technical approach to the preparation of a strategic and implementable Energy Masterplan with a 20-year time frame. In order to succeed, the plan has to work on three levels. Firstly, the plan must provide a framework for the authority to assess and

control the development of its own projects to diversify energy used by the organisation itself. Secondly, it must effectively guide the tenants’ energy behaviour and all other users of its facilities. And finally, in a wider context, the authority can use its energy policies to influence others and be held up as an example of leadership in the field.

This positive attitude to energy diversi-fication will undoubtedly help protect its business and technical operations in coming years. By reducing exposure to volatile markets as well as minimising environmental damage, all major airports can benefit from diversifying their energy supplies. A long-term view has to be taken and the investment required will be considerable, but total dependence on single utility suppliers is no longer sustainable. In a world of expensive energy, major airports have to take more control of their supply and make as many economies as they can in their demand. ❑


An important commercial goal for energy diversification is to enable airports to become energy producers as well as energy re-sellers

Gridlock is a problem faced in urban areas around the world. But the introduction of carefully considered congestion charging is helping remedy the situation. By Stephen Rutherford, Managing Director.

TAKING CHARGE OF CONGESTION


Congestion charging, often seen as a modern innovation, has in fact been on the UK transport policy agenda for almost 50 years.

Professor Ruben Smeed’s report for the Ministry of Transport in 1964 proposed a charge in urban areas to establish a closer relationship between the costs that are paid by drivers and the costs that are imposed on the community as a whole. Smeed advocated the proceeds from the charge should be used to finance improvements to urban roads as well as supporting alternatives to private car use.

The first congestion charging actually introduced was the Singapore Area Licensing Scheme in 1975, covering six kilometres of the Central Business District and using a paper-based system with 34 gantries. It was part of a stick and carrot approach that included very high car tax and vehicle quotas alongside one of the world’s best public transport systems. The scheme succeeded in reducing vehicle trips into the ‘Restricted Zone’ by 76% in the first year of operation and has proved highly flexible in its subsequent development. The zone was extended in 1995 to cover all major freeways within Singapore and three years later the whole scheme was converted to Electronic Road Pricing (ERP).

There are three main groups of congestion charging schemes:

n Charging an area (e.g. Oslo and London)n Charging a particular route (e.g. Highway

407 in Toronto, Melbourne’s City Link and Dubai’s Salik Freeway)

n Charging some lanes on a route (e.g. the HOT lanes in Los Angeles and San Diego)

In each category, the schemes are best defined flexibly to suit the circumstances of different cities. After Singapore, area charging was introduced in Norway in Bergen (1986), Oslo (1990) and Trondheim (1991). Then came a gap before the recent celebrated introductions in London (2003) and Stockholm (2006).

LONdON ANd STOCKHOLMThe Central London scheme is well documented. It covers an area of 24sq km with cameras at 167 entry points registering the licence plates of incoming vehicles. Charging was predicted to reduce entering traffic by 15% and congestion in the zone by 30% and, for once, transport planners got the forecasts dead right. Subsequently, however, the reductions have been eroded by roadworks and the transfer of road space to pedestrians and cyclists.

Implementing London’s congestion zone was certainly made easier and quicker


pro-active government. By contrast, since 1986, Hong Kong has seen two proposals for Electronic Road Pricing stymied by opposition from both the media and the District Boards. In the UK, public consultations have rejected schemes for Birmingham, Coventry and Edinburgh. Edinburgh’s 2007 referendum saw three-quarters of the city’s residents turn down the council’s proposed zone, broadly similar to London’s but with much lower charges.

In this context, it is interesting to see what has happened in New York, arguably a prime candidate for congestion charging. Mayor Bloomberg, like Ken Livingstone, has been strongly pro-charging and the city, besides having good public transport, also already has a ‘cordon’ of water around Manhattan. In December 2006, Bloomberg proposed a weekday scheme south of 60th Street with charges of $8 for cars and $21 for trucks. The major freeways around the zone would continue to offer free passage for all vehicles. Studies backed the scheme and the US Department of Transportation offered $354 million to implement it. The plans were approved by the NYC Council and Congestion Mitigation Commission and then went before the State Assembly. But on 7 April 2008, the very day that was the deadline for committing the federal funds, the Assembly decided not to vote on the project and the $354 million has been reassigned elsewhere.

Why the change of heart in New York? There had been no formal consultation, but some powerful lobby groups were against the plans. These included the Boroughs of Brooklyn and Queens, which unlike New

because it had been a central element of Ken Livingstone’s manifesto for his election as the first Mayor of London. Once voted in n, there was subsequently no public consul-tation that could have delayed or derailed the project. Nor, therefore, did the problem arise of knowing which would be the ‘right’ and ‘wrong’ questions to ask the public at the consultation stage.

In our opinion, the London scheme has been a success for three reasons. It had a strong political champion in Ken Livingstone, who had the courage to see it through. There were reasonable existing and improved public transport alternatives with buses, trains and the tube. And thirdly, there was a reasonable alternative road route around the zone for diverting drivers. London also has flexibility with its exemptions for certain vehicle types and outside the charging period of 7am-6pm Monday to Friday. The 136,000 residents of the zone are also given a 90% discount.

Transport for London (TfL) raised the congestion charge for cars from £5 to £8 per day in July 2005 and then, in February 2007, introduced the ‘Western Extension Zone’ (WEZ) into Kensington and Chelsea. Jacobs Consultancy forecasted the impact of both these changes very accurately, particularly in terms of the very low price elasticity response to the new charges. Many permutations of the WEZ scheme were considered before it was finalised, including its boundary, the discount to its relatively well-off residents and whether Park Lane should be defined as a ‘free route’.

Ken Livingstone planned to extend charging into congested parts of the suburbs

across Greater London, as well as levying a £25 charge on the gas-guzzling cars known locally as ‘Chelsea tractors’. In the event, Boris Johnson became London Mayor in July 2008 and scrapped the ‘tractor charge’ proposal. Johnson also promised a review of the WEZ and Jacobs Consultancy has been commissioned to forecast the impact of its possible removal as well as the introduction of different charges at different times of the day. In the Mayor’s ‘Way To Go’ strategy report published in November 2008, the existing charging scheme is held to have worked and its continuance seems to be assured.

The Stockholm scheme offers no resident discounts and has a much finer-tuned charging system than London. Fully introduced after a six-month trial in 2006, it covers the central area of the city except Lidingo Island and along the Essingeleden motorway. Stockholm’s zone has 11 different charging periods and a cost range of 10-20 SEK (1.06-2.11 Euros).

IMpLEMENTATION London, Stockholm, Singapore and other cities show that flexible charging schemes can be devised to fit different congestion situations, as well as varying political circumstances. Yet despite the evidence of many studies, relatively few schemes have been implemented. Almost certainly, the reason is a lack of political will coupled with poor public consultation. All too often, the wrong questions are asked in the first place. Perhaps it is no surprise that the first scheme came in Singapore, with its strong-willed and

London, Stockholm, Singapore and other cities show that flexible charging schemes can be devised to fit different congestion situations, as well as varying political circumstances

winter 08_023

n congestion charging

Jersey currently enjoy some free routes into Manhattan. There was criticism that drivers would park in neighbourhoods just outside the boundary, although no such effects have been observed in London. Another objection was that congestion might be reduced in rich downtown Manhattan but would go up in poorer Harlem and the South Bronx. The charge was also viewed as a tax on poorer residents, its cameras seen as a potential threat to civil liberties and car park owners within the zone said they would lose revenue.

Over in Scandinavia, however, the Stockholm scheme made the successful transition from trial to implementation during 2006 and 2007. The public referendum of 17 September 2007 covered residents of both Stockholm Municipality and the Stockholm Urban Area and there was an interesting difference in wording for the two areas. Residents of the municipality, site of the zone, were presented with: “Environmental fees/congestion tax means that fees will be charged in road traffic with the purpose to reduce queuing and improve the environment. The incomes will be returned to the Stockholm region for investments in public transport and roads.” Those living in the wider urban area, on the other hand, were asked more simply: “Do you believe that congestion tax should be permanently introduced in Stockholm?” They then voted 60:40 against the scheme, while the municipality residents approved it by 53% to 47%. The mixed result seemed to make it unclear how to proceed, but the government ruled that the views of those living in the city itself should prevail and the scheme made permanent from August 2007. It was also decided politically that the scheme’s revenues should go to new road building in and around

Stockholm, rather than spent entirely on public transport, as envisaged at the trial stage.

MANCHESTERIn the UK, the current ‘live’ consultation is in Manchester, where a group of authorities are bidding for a £3 billion package from the Department for Transport’s Innovation Fund (TIF), to be spent on a charging scheme as well as extending the city’s Metrolink. The congestion scheme is proposed with two cordons – £2 to enter the outer zone bordered by the M60 motorway and a further £1 to go inside the inner ring road. Unlike Stockholm and London, the Manchester scheme will only charge in peak hours and in peak directions (7-9.30am inbound and 4-6.30pm outbound). There are also recently announced exemptions and discounts, including 12 months for goods vehicles and 20% off for low-paid workers. Employees working in Trafford Park will get a three-year exemption until public transport has been improved there and there has also been a reduction in the maximum daily charge for everyone from £10 to £5.

Manchester’s scheme went out to public consultation in the summer and there have been 85,000 respondents. A referendum is scheduled for December 2008 and surveys suggest support ranging from 36% to 55%. Crucially, support appears to depend on both the question asked and the group questioned. The local returning officer has suggested the referendum question is: “Do you agree with the TIF proposal?” But this has been criticised for not mentioning the words ‘congestion

charging’. Three of the ten councils involved (Stockport, Bury and Trafford) are still against the plans, which require a majority of 7:3 to be implemented. Roger Jones, chairman of the Greater Manchester Passenger Transport Executive and a strong supporter of the scheme, was voted out in July by an equally firm opponent. So it’s very much a case of ‘watch this space’ on what happens next to congestion charging in Manchester.

Elsewhere, around the world, environ-mental considerations are an obvious impetus for congestion charging. Schemes that are flexible in their area, charge levels, exemptions and discounts can be designed for most cities and many are in the process of proposals and trials. They include places like Los Angeles that do not conform to the stereotype of congested city centres. Perhaps the most vital lesson to be learnt from past experience is the importance of the public consultation stage. Schemes can be easily scuppered by minority lobby groups, poor media coverage and, especially, an ill-informed public. The wrong questions all too quickly produce negative answers. Ask the right questions, however, and the public can see the point of a well-designed charging scheme. ❑


CONGESTION

CHARGING:

London’s congestion zone:

Covers 24sq km

Has cameras at 167

entry points

Has reduced congestion

by 30%

Costs £8 per day

EnvironmEnt or

Economy

Edge 1 Winter 08

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