In Australia transport accounts for 18% of anthropogenic CO2 emissions. Although we anticipate that the number of cars owned and the distance driven by cars is likely to increase in the future, we are less certain if carbon emissions from the transport sector will increase, decrease or plateau out.
Scenarios can help us engage with uncertainties about the future. While scenarios will not resolve uncertainties, they can help us make better decisions in the face of uncertainty.
Scenario development can involve many people and/or require sophisticated modelling; but it doesn’t have to. Very simple scenario analysis can provide powerful insights and useful information for decisions. But how?
This example is adapted from recent research on the development of sustainable transport policy. We developed an understanding of the risks and vulnerabilities faced by the Australian society under two key global future uncertainties (the timing of peak oil and a global carbon price) and under two scenarios (early and late adoption of policy to reduce the footprint of urban cars).
We undertook a thought experiment to investigate the consequences of policy timing to reduce the footprint of urban cars on the:
- annual investment required ($M: low, $$M: medium, $$$M: high)
- ability of policy makers to plan strategically (↑: high, ↔: medium and ↓: low)
- cost of adaptation to climate change ($A: low, $$A: medium, $$$A: high)
- the degree of human suffering (☹:low, ☹☹:medium, ☹☹☹:high)
This is what we found:
If a nation chooses an early transition away from a carbon intensive transport sector and peak oil occurs early (boxes a & b) we are likely to see significant early investment for transition away from a fossil fuel intensive transport sector. Because we plan transition, policy is pre-emptive rather than reactive. At the same time our time available for preparation is short. This means an intermediate ability for society to plan for the transition. Costs for adaptation to climate change will be lower relative to other scenarios because all nations must transition to less oil intensive transport sectors, thus slowing carbon emissions. Overall societal vulnerability is low.
When the nation chooses an early transition away from a carbon intensive transport sector and peak oil occurs later (boxes c & d) we see medium societal vulnerabilities overall. Because the transition away from a fossil fuel intensive transport sector is planned (not imposed by factors such as peak oil) this means an intermediate ability for society to plan for the transition. This is especially true for the case where a global carbon price is implemented late. When the carbon price is implemented early, policy needs to be more reactive and investment is more likely to be concentrated over a shorter period of time. This results in higher annual investment. Intermediate costs are expected for adaptation to climate change because not all nations are likely to plan ahead.
Early peak oil and late transition to a less carbon intensive transport sector (boxes e & f) will likely result in intermediate overall societal vulnerability. An energy crisis is likely because a transition away from a fossil fuel intensive transport sector will be imposed at short notice. Because all nations face peak oil together, large increases in financial (e.g. oil prices, new infrastructure costs) could occur because of competition. Cost associated with adaptation to climate change are likely to be intermediate because carbon emissions reduce earlier, but competition between nations escalate prices. The additional influence of an early carbon price will not have significant effects because transition is already forced by restrictions in oil availability.
If a nation chooses a later transition away from a carbon intensive transport sector and peak oil occurs later (boxes g & h) we see high overall societal vulnerability. In the absence of a carbon price the future is likely to entail high financial and non-financial costs (life, well-being, oil prices etc.) associated with adaptation and defence against the consequences of climate change. If a carbon price occurs early then we are likely to see high per annum cost associated with reactive policy to transition to a non-oil based transport sector in response.
The scenario analysis indicates that a pre-emptive policy strike is justified for transport policy development. A nation choosing to undertake an early transition to lower its transport footprint reduces the vulnerability of its economy, society and environment to future uncertainties associated with the timing of peak oil and the introduction of a global carbon price.