16 Aug 2019 Story Transport

The Global Fuel Economy Initiative and the Global Climate Partnership Fund Working together towards sustainable mobility

Mobility is a key feature of modern society, and advancements in transportation technology have been an important driver for social and economic development, since the first steam locomotives started transporting people and goods in the late eighteenth century.

Nowadays, there are more than 1 billion cars on the roads. Land-based passenger travel accounts for approximately 12.5 per cent of the global CO2 emissions from fuel combustion and is the main reason for poor air quality in cities. Even with the increase in use of shared mobility solutions, private car ownership is expected to increase—current trends show the number of cars on the roads doubling by 2040—driven by fast-growing markets in India, China and Southeast Asia.

To mitigate the impacts of climate change, emissions from the transport sector should be drastically reduced in the coming years. Sustainable mobility solutions are starting to rapidly spread including hybrid and electric vehicles for both private and public transportation. Alternative fuels such as hydrogen, natural gas and liquified petroleum gas have also increased their shares in the market, and fuel efficiencies in internal combustion engines are challenging the technology limits. However, this increase in fuel efficiency is more visible in countries members of the Organisation for Economic Co-operation and Development, while in the rest of the world, vehicle fuel economy has stagnated over the last ten years.

To boost the deployment of these more efficient vehicles in developing economies, collective efforts are needed from all parties. Governments and market players need to work together in establishing an adequate regulatory framework, raising awareness on the impacts of fuel economy programmes and providing financial solutions to people to access new and more efficient means of transportation. 

The Global Climate Partnership Fund, a public-private partnership fund, has taken up the mission of combatting climate change by financing energy efficiency and renewable energy projects in developing countries, mainly in cooperation with local financial institutions. The Fund targets all investments that reduce projected greenhouse gas emissions by at least 20 per cent. To safeguard accurate recording of carbon emissions associated with investments in line with internationally recognized carbon accounting standards, investment-specific energy consumption data needs to be compared to a realistic baseline scenario. Therefore, developing representative technology and country baselines to calculate the emissions reduction of energy efficiency projects is key to scaling up investments in this sector and to properly assess low-carbon transportation solutions.

To address that challenge, the Global Climate Partnership Fund, through its Technical Assistance Facility, entered into a collaboration with the UN Environment Programme in 2017 to jointly establish country baselines for transportation. This strategic partnership allows the Global Climate Partnership Fund to obtain first-hand information on the development of sustainable energy policies in the markets it operates. It also contributes to UN Environment’s effort to expand data collection in order to advise emerging countries on fuel economy regulations that promote lower carbon mobility.

For the specific case of transportation, the Global Climate Partnership Fund has used data collected by the Global Fuel Economy Initiative to set baselines for energy-efficient vehicles in Georgia and Costa Rica. The Global Climate Partnership Fund will continue to use Global Fuel Economy Initiative baseline information to further support their local partners, and verify vehicle fuel economy fleet improvement, like in Sri Lanka and Mongolia.

In Cambodia, the Fund’s partner financial institutions are targeting the financing of original equipment manufacturer liquified petroleum gas three-wheelers or ‘tuk-tuks’, aiming to replace the less efficient petrol two-wheelers, while increasing safety and comfort in this widely used means of transport in Cambodian cities (there are more than 6,000 tuk-tuk drivers in Phnom Penh alone). In the last few months, the Global Climate Partnership Fund contributed to financing more than 2,645 new liquified petroleum gas tuk-tuks that will reduce more than 1,600 tons of CO2 per year.

Current projects include supporting transportation baselines for Vietnam. The Global Fuel Economy Initiative will develop a baseline for light vehicles in the country, including motorcycles, which account for the biggest part of the fleet, with more than 45 million registered motorcycles. In both countries, local governments have shown strong interest to the Global Fuel Economy Initiative to implement fuel economy initiatives.

The Global Climate Partnership Fund has been active in transportation since inception and has financed to date more than 3,000 efficient cars and buses that will prevent the emission of more than 85,000 tonnes of CO2. Countries which have received funds for financing sustainable transportation include Armenia, Costa Rica, Ecuador, Mongolia, Nicaragua and Sri Lanka.

Providing solutions for sustainable mobility is essential to achieve the Sustainable Development Goals. Through this collaboration, both the Global Fuel Economy Initiative and the Global Climate Partnership Fund are contributing to several Sustainable Development Goals, including Goal 3 by improving air quality, Goal 11 by providing access to sustainable transport systems and especially Goal 13 by mobilizing funds to reduce greenhouse gas emissions.



The partners

Global Fuel Economy Initiative

The Global Fuel Economy Initiative is a partnership of the International Energy Agency, the UN Environment Programme, the International Transport Forum of the Organisation for Economic Co-operation and Development, the International Council on Clean Transportation, the Institute for Transportation Studies at University of California, Davis, and the FIA Foundation, which works to secure real improvements in fuel economy and the maximum deployment of existing fuel economy technologies in vehicles across the world. The Initiative promotes these objectives through shared analysis, advocacy, and through in-country policy support. UN Environment is responsible within the Global Fuel Economy Initiative for fuel efficiency market analysis in developing countries and liaison with local governments.

Global Climate Partnership Fund

Established in 2009 by the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety and KfW Entwicklungsbank, the Global Climate Partnership Fund is a public-private partnership which aims to provide financing to low-carbon projects in developing economies. The Fund focuses on financing energy efficiency and renewable energy projects, primarily in cooperation with local financial institutions but also directly.