Will cheap oil threaten the climate deal?

Nearly 2 months ago, a climate deal is reached in Paris, which was  translated by many experts to mark the end of fossil fuel and a full transformation to renewable energy. Looking at the current situation of the oil market, it might be too early to conclude that the fossil fuel era is coming to an end. The oil price has reached its lowest in more than a decade. In the past two years it has fallen from above $100 a barrel to below $30, a decrease of more than 70%. As there is no sign that oil producing countries in the Middle East will lower their oil output, it is believed that the world is currently ‘drowning in oil’.

This situation can threaten the succes of the climate deal as it reduces the incentive to combat climate change. In terms of transportation, it is now cheaper to run a diesel vehicle than purchasing an electric vehicle, while until recently electric vehicles are believed to be cheaper in the long run. It is more likely that oil will stay cheap in the coming years, something that might not have been expected by many institutions and individuals when calculating the total cost of ownership of electric vehicles.

I have been supporting electrification of urban mobility as one of the many ways to combat climate change, since greenhouse gas emissions from transport are a key contributor to this. However, it is worth to think in a bigger perspective than only replacing fossil fuel. There are other policy areas that are mostly forgotten when it comes to emissions reduction from the transport sector, while if these policy areas are strengthened, it can greatly contribute to reach the goal. Some of them are housing policy and planning for the young.

Housing policy

Today more than half of the world’s population live in cities and this figure is expected to reach 75% by 2050, creating more megacities in the world. It is not surprising that many people want to live in cities, where the best jobs exist. As a result, housing in megacities has grown costlier and migration toward suburban areas is unavoidable. It generates longer daily commuting trips between residence and workplace and puts much burden on the existing transport infrastructure and environment.

In many countries, housing policies are hardly targeted and linked with transport policies. Besides the policies of accommodating the commuters’ journeys, the government should also find solutions to provide affordable housing to meet the housing needs and eventually reduce the travel needs.

Planning for the young

When we discuss about world urbanisation, we cannot avoid to consider the young generation. They prefer to live in the city. They grew up in the era of internet and smartphones, which make them more interested in new gadgets, apps, online shopping and social media, than having a car. Cities give them endless opportunities to perform their mobility in sustainable ways by sharing cars, using public transport and bikes.

Unfortunately, policy makers have paid little attention to this huge opportunity. Relating this to the housing policy described above, constraints on the housing supply make it hard for young people to live in the city, especially because they mostly have just entered the job market and cannot afford to buy or rent a house in the city. And this discourages their sustainable life style.

Comprehensive approach, a key to sustainable transport

In conclusion, electrification of urban mobility is a way to combat climate change, but having a comprehensive planning approach will create a robust and sustainable transport system. Housing policy and planning for the young are just two out of many areas (i.e. transport network, land use planning, fiscal measures to reduce motorisation, etc) that need to be coordinated and integrated. Policy makers have the most important role to play. They need to find a window of opportunity instead of being dragged down by the oil-price drop. In this way, we should not be afraid of cheap oil, should we?

Photos courtesy of the official website of Depositphotos

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