Why we need to reduce VKT

Back in May the government released New Zealand’s first ever Emissions Reduction Plan. This was an historic moment, finally a plan with legislative weight that will help guide how we can meet our climate commitments over time.

The ERP confirms that transport needs to play a major role in reducing our greenhouse gas emissions. Transport makes up nearly half the country’s carbon dioxide emissions (around 20% of total greenhouse gas emissions) and between 1990 and 2018 transport emissions nearly doubled, which the Climate Commission says is the most rapidly increasing source of emissions in recent decades. In fact, the transport sector has been largely responsible for the increase in New Zealand’s overall emissions over the past 30 years.

The ERP is clear that emissions need to be reduced through a combination of electrifying the vehicle fleet and reducing emissions intensity of fuel, reducing freight emissions and reducing light-vehicle travel. This manifests in four key targets:

This post is going to explore how government got to that first target – around reducing VKT – and look at why we need to reduce light VKT by this much.

A key piece of work informing the ERP (alongside advice from the Climate Commission) was the Hikina te Kohupara ‘Green Paper’ that the Ministry of Transport released in May 2021 as a discussion document of the various ways in which transport emissions could be reduced over time. This work incorporated the best practice ‘Avoid, Shift, Improve’ framework for reducing emissions, before looking at what it might look like to place different levels of emphasis on each component of this framework.

The work also looked at freight separately to people, because the ways of achieving change here have some important distinctions. This led to the development of three themes:

Four pathways were developed to understand the advantages, disadvantages, feasibility and impact on emissions of placing different levels of emphasis across the three themes.

Essentially the first three pathways test different levels of emphasis on ‘avoid and shift’ interventions – which is all about impact on total vehicle travel – while all placing a high emphasis on the need to improve the vehicle fleet, not only through electrification but also reducing the energy intensity of fuels and improving vehicle efficiency (for both moving people and freight).

Pathway 4 seems to have come along quite late in the process, because the Ministry of Transport realised that none of the first three pathways would be sufficient to meet the Climate Commission’s emerging emissions budgets out to 2035. You can see this in the modelling of the four pathways:

All this technical work is then outlined in a pretty useful table, which highlights what is expected to happen to various metrics under the different pathways. Looking at pathway 4 in particular, we can see that for the Climate Commission’s 2035 budgets to be met there would need to be a 39% reduction in light VKT, 27% of the vehicle fleet would need to be electric, and 4% of medium trucks would need to be electric.

Interestingly, when you compare Pathway 4 against a pathway developed by the Climate Commission, there are some important differences. The Climate Commission assumes less of a reduction in VKT (14%), but on the flip side assumes that 41% of the vehicle fleet would be electric by 2035.

There are obviously immense challenges in achieving this quantum of change in the next 13 years – to both VKT and the vehicle fleet. We’re pretty familiar with the challenges of reducing VKT, especially with a growing population and a very car dependent transport system and urban form, so I found an evidence paper by the Climate Commission that delves a bit more into some of the challenges with transforming the vehicle fleet pretty interesting.

Firstly, over their whole lifespan, electric vehicles aren’t completely carbon-neutral anyway. Once you consider their manufacturing, shipping, battery manufacture, raw materials extraction etc., EVs reduce emissions by around 60% compared to internal combustion engines – still a big improvement!

Alongside cost, and especially relevant to the 2035 targets, is simply how much of the fleet can feasibly be changed to electric over 13 years – especially when our average fleet age is more than this. In particular, it seems like there are some critical supply constraints for used EV imports – especially relevant as we are very reliant on imports from Japan for our vehicle fleet as a whole.

When landing on the final ‘balance’ between VKT reduction and fleet transformation in the ERP, it seems the government took a middle ground between what was in Hikina te Kohupara’s ‘pathway 4’ and what was in the Climate Commission’s recommended pathway. Interestingly the overall target for emissions reductions was also changed from a 47% decrease between 2018 and 2035 in earlier work, to a 41% decrease between 2019 and 2035 in the final ERP.

It seems that in the end the ERP landed in a fairly pragmatic place on this, somewhat helped by a tweak in the final numbers around the scale of reduction needed for transport emissions overall. The assumption around fleet transformation is slightly more aggressive than pathway 4 of Hikina te Kohupara, but that means VKT reduction doesn’t have to be quite as steep (especially as bizarrely the VKT reduction target seems to be a comparison against a 2035 baseline projection, rather than a base year, just to confuse everyone).

Of course achieving a 20% reduction in VKT across the whole of New Zealand will require more aggressive reductions in some parts of the country – notably Auckland – to ‘offset’ the difficulties in achieving much change in smaller towns and rural areas. The ERP states that regional VKT reduction targets will be developed by the end of the year, to help guide future planning work. It will certainly be worth keeping an eye on this for Auckland, as I suspect we will need to (and are best placed to) do a lot of the ‘heavy lifting’ on this if the country as a whole is to achieve these goals.

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