Leading Development Banks Pledge $175 Billion to Sustainable Low Carbon Transport

by Press Release on 2012-06-26 06:17:26

25th July 2012: Global Logistics Media Press: The world’s eight leading development banks plan to invest $175 billion over a 10-year period supporting low-emission transport programs in Latin America, Asia and Africa. Programs include car sharing and rapid bus systems for these areas, whose cities are projected to experience a population growth exceeding 1 billion people over the next twenty years.

The World Bank and Asian Development Bank, along six other multilateral banks, announced plans for a $175 billion pledge of loans and grants at the U.N. Sustainable Development Conference in Rio de Janeiro. Sustainable transportation was established as a priority in the U.N.’s development agenda.

The banks say they are making financial commitment at a crucial time for the transportation sector. Cities in Africa and Asia are projected to add hundreds of millions of people to their populations. The banks explain, in a joint statement, that with rising incomes leading to a growth in the number of drivers, a shortage of efficient transportation in rapidly growing cities has creating major congestion. The result has been lost time and large costs, ranging from 2 to 5 percent of GPD.

According to the Partnership on Sustainable Low Carbon Transport (SLoCat), a partnership involving U.N. organizations, the development banks and other development organizations, the pace of urban growth with call for new transportation systems to help affected cities prevent urban sprawl and congestion.

Cornie Huizenga, an organizer SLoCaT's Rio+20 campaign, explains: "The breakthrough that we are witnessing allows us to plan for the one billion people who will move to cities over the next 20 years and the one billion people still living in poverty.”

Development banks also claim that, if current trends continue, the transportation sector will account for 46 percent of global greenhouse emissions by 2035, making it the world’s leading emitter of greenhouse gases. Joan Clos, executive director of U.N.-HABITAT, a U.N. agency centered on urban development, explains: "These unprecedented commitments have the promise to save hundreds of thousands of lives by cleaning the air and making roads safer; cutting congestion in hundreds of cities; and reducing the contribution of transportation to harmful climate change.”

The development banks estimate that developing countries in Asia will need over $2.5 trillion in transportation investment between 2010 and 2020, and in Latin American countries, $0.7 trillion will be needed. Investment banks also state that, in Africa, annual investments of $18.3 billion will be needed between now and 2020.