By Categories: Economy

One of the toughest environmental and social challenges of our time is managing the mobility of people and goods. By 2030, passenger traffic will exceed 80,000 billion passenger-kilometers—a fifty percent increase—and freight volume will grow by 70 percent globally.

In fast-growing places like India, China, sub-Saharan Africa, and Southeast Asia, billions of people will have higher lifestyle expectations, and new mobility aspirations. Mega projects like the China’s One Belt, One Road will connect more than half of the world’s population and roughly a quarter of the goods and services that move around the globe through maritime links and physical roads. Globally, the number of vehicles on the road is expected to double by 2050.

Having a long-term term perspective which focuses on sustainability is a defining factor in the future of mobility. And yet, transport was not endorsed as a distinct global Sustainable Development Goal (SDG), largely because the sector could not talk with one voice to influence this global process.

Some elements of transport were included in various SDGs, (e.g., road safety, carbon emissions, etc.) and over the past two years, the international community made several commitments related to transport. For instance, transport is a key policy component of the action program that landlocked developing states have agreed upon, evolving them toward land-linked states. Also, the international community adopted the New Urban Agenda at the Habitat III conference in Quito, Ecuador, which outlined the importance and imperative of improving the sustainability of transport systems to mitigate the challenges of rapid urbanization.

Transport provides a critical enabling environment to support economic and social development necessary to reach the SDGs. For example, transport is a primary consumer of fossil-fuel energy, so it is critical to the achievement of SDG 7 on energy.

Likewise, transportation is indispensable to achieving SDG 9 (building resilient infrastructure) and SDG 11 (sustainable cities and communities, realized through improvements in road safety and by expanding public transportation).

In addition, rural road access is highly correlated to poverty incidence. There is also a strong association between transport activity and economic development.

The transport sector has the potential to improve the lives and livelihoods of billions of people—their health, their environment, their quality of life—and stabilize climate change. But today it is stuck going in the wrong direction, with transport contributing to gross inequalities in access to economic and social opportunities, rising numbers of deaths resulting from transport-related accidents, intensive fossil fuel use, massive emissions of greenhouse gasses, as well as air and noise pollution.

The social, environmental and economic challenges are clear. However, a leadership vacuum still exists at the global level, without a clear set of principles to transform the sector. There is a way forward, but it requires all the stakeholders to work together to achieve it:

First, the sector can no longer afford a fragmented approach. It is time to bring greater coherence and talk with one voice to influence global and country processes. The approach adopted so far, in which a multitude of actors—UN agencies, multilateral development banks, the manufacturing industry, civil society, etc.—all acting independently has failed to bring the scale of actions and financing to transform mobility. Pulling these different actors together is not impossible. The energy sector partners embarked on this same journey in 2010, enabling energy to be mainstreamed into all global agreements on sustainable development and to possess the credibility and reliability required to attract private and development finance partners.

Second, we need to clearly define the objectives underpinning sustainable mobility. In this vein, the SDG framework does not provide a clearly defined trajectory for mobility, but rather includes elements to build on. For example, the SDGs embody the notions of “universal access,” road safety, energy efficiency, and deaths from air pollution. From there, it is possible to define a vision for sustainable mobility, around four global goals: (1) equitable access; (2) security and safety; (3) efficiency; and (4) pollution and climate-responsiveness. Under this vision, sustainable mobility would include a better provision of infrastructure and services to support the movement of goods and people. This outcome would be achieved only because the four goals are pursued simultaneously and trade-offs among them are managed.

Third, the economic evaluation of transport projects should be radically transformed. Traditional cost-benefit analyses of those projects focuses on travel time reduction—a proxy for efficiency. However, there is a trade-off between speed and fatalities, for example. The costs of crashes can actually reverse expected efficiency benefits from increasing transportation speeds. Integrating other sustainability dimensions, like safety, green characteristics, and inclusivity, will significantly affect project evaluation, and therefore transform project design — and this is the right way forward. No road project, for example, should be financed without due consideration for safety, equity, and climate impact.

How can technology help the future of mobility?

Technology will form the backbone of mobility in the future. By 2020, a large portion of mobile devices and connections will be in Asia Pacific, the Middle East, and Africa. More data and connectivity can lead to more efficient and convenient mobility, offering great opportunities for developing countries to leapfrog existing legacy technologies and practices. For example, advances in analytics, automation, and the “Internet of Things” are already showing great promise in reducing consumption, including the consumption of energy.

Additional mobility services provided to users on smartphones have already started a move away from vehicle ownership toward shared vehicle usage in many mega cities, as technology-enabled services like car-sharing, ride-hailing, and carpooling are mainstreamed. Connected and autonomous vehicle technology could help optimize roadway utilization, potentially saving billions for future infrastructure expansion.

But the risks associated with new technology must be considered along with the potential benefits. Fundamentally, the car remains the core element of the foreseeable future of mobility. The world could thus end up with congested cities that have a dearth of tax revenues to maintain roads, along with massive job losses pegged to automation. While decision-makers have so far focused on how to improve mobility and shift towards public modes of transportation, the next frontier will be defined by actions to avoid unnecessary physical movement of people and goods, through the use of technology.

Under the Sustainable Mobility for All platform, the World Bank Group has brought together a diverse and high-level group of transport stakeholders committed to transforming mobility, including multilateral developments banks, United Nations bodies, government donors, non-governmental organizations, global civil society, and academia.

These partners will: rally around a common vision, with clearly defined objectives; develop a mechanism of accountability for the sector, with metrics to measure progress; and articulate a program of action and financing to transform the sector. The World Bank Group is already embedding this vision for sustainable mobility in its transport lending. In addition, within the new environment and social safeguards Framework, safety assessments must be considered in the design of all new transport projects.

It is crucial that transport be a part of the global conversation around SDG implementation. This July at the United Nations headquarters, countries will come together for the second annual High Level Political Forum, and share how they are implementing the SDGs at the national level.

At the Forum, the World Bank Group and the UN Department of Economic and Social Affairs are planning to convene a broad group of stakeholders to share and receive feedback on the draft of the Global Mobility Report, which is the first-ever attempt to examine performance of the transport sector globally, and its ability to support sustainable development. The final report will be released in October.

All of the partners can contribute their unique expertise and perspective to change transport for the better. If these stakeholders work together, they can shape the future of mobility, while also ensuring that all of the SDGs move in the direction of ending poverty and building shared prosperity.


 

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  • Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.

    Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.

    The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.

    Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.

    In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.

    Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.

    “Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.

    India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.

    With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.

    They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.

    India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.

    As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices

    The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).

    The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.

    Here is an approximate break-up (in Rs):

    a)Base Price

    39

    b)Freight

    0.34

    c) Price Charged to Dealers = (a+b)

    39.34

    d) Excise Duty

    40.17

    e) Dealer Commission

    4.68

    f) VAT

    25.35

    g) Retail Selling Price

    109.54

     

    Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.

    So the question is why government is not reducing the prices ?

    India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.

    However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.

    That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.

    Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.

    Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.

    But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.