European Investment Bank lending in the transport sector ...


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European Investment Bank lending in the transport sector ...

  1. 1. European Investment Bank lending in the transport sector - Climate impacts For more detailed information and references see the full report entitled: Lost in Transportation: The European Investment Bank’s bias towards road and air transport The European Investment Bank (EIB), the European Union’s ‘house bank’ and the world’s largest public bank, gives loans and guarantees on a not-for-profit basis using funds contributed and guaranteed by member states. Between 1996 and 2005 the bank provided loans over EUR 112 billion for trans- port projects. This factsheet considers the climate impacts from the EIB’s transport investments. Transport deserves a promi-  Stepping up investment into The external costs of GHG emis- nent place in EU climate policy innovations eg. the introduction sions are included in the EIB’s eco- and legislation, as in 2004 it and manufacture of climate- nomic analysis of projects and it was responsible for 29.8% of the friendly engine technology and states that because of this, “some EU-15’s CO2 emissions, and it is fuel cells of these projects may not pass one of the few sectors in which  Maintaining lending for sus- the economic test and thus would CO2 emissions have risen rapidly tainable transport (public trans- not be financed by the Bank.” since 1990. Thus the ability of port systems, rail, etc.) No lim- However the economic analysis the EU to bring its CO2 emis- its are placed on projects with does not appear to be sufficient sions under control largely high greenhouse gas emis- to exclude airports and motor- depends on its ability to curb sions. ways from financing in spite of the growth of transport emis- their established climate-damag- sions. The EIB states that “all projects ing properties. Indeed it is hard are screened for their poten- to imagine a project which the Although the EU has not yet tak- tial to contribute to the climate EIB would refuse to finance due en adequate legislative action in change policy objective, includ- to its climate impact. this area, the 6th Environmental ing projects that generate car- Action Plan and the 2001 Trans- bon credits, or energy efficiency Without any commitments to port White Paper provide a use- or renewable energy projects”. avoid financing climate-de- ful basis for the EIB to develop However it appears that those structive industries, the EIB’s a transport strategy leading to which do not contribute are more positive investments will reductions – not increases – in rarely if ever rejected, imply- remain a drop in the ocean. greenhouse gases (GHG) from ing that contributing to climate transport. objectives is an optional extra, Air transport rather than something that all However, the EIB’s statement projects must do. While the EIB Between 1996 and 2005 the on climate change is insuffi- is ‘interested’ in financing posi- EIB lent EUR 16 billion for the cient. The only points on trans- tive projects, unfortunately its aviation industry. Although port are: impact is severely reduced or aviation may seem to make up  Stepping up lending for en- eliminated by its financing of a relatively small proportion of ergy efficiency eg. more efficient climate-damaging projects. the EU’s CO2 emissions – 3.6% cars and public transport for domestic and international
  2. 2. European Investment Bank lending in the transport sector - Climate impacts aviation combined – CO2 emis- EIB airport expansion the new capacity is fully used sions from the EU 15’s inter- projects (45.15 mt), are: national aviation activities in-  More than the three most creased by 86% between 1990 Based on UK government fig- climate-damaging power sta- and 2004 – much more than in ures, economist Brendan Sewill tions in Europe combined any other sector. Other studies has calculated that each pas-  More than New Zealand, have estimated that because of senger taking off from UK air- Switzerland, Ireland, Norway various effects caused by avia- ports is responsible for 300 or Slovakia’s total CO2 emis- tion emissions being released kg of CO2 emissions. From sions for 2003 (34.7/44.72/ high up in the atmosphere, the the National Inventory report 44.45/43.22/43.05 mt) contribution of aviation to cli- of Netherlands 2005 it can be mate change is currently 4 to 9% calculated that the 2003-2004 at the global level and 5 to 12% average for the Netherlands is Schiphol Airport 5th within the EU. Between 1996 and 220.75 kg. These figures have Runway, Amsterdam 2005 the EIB lent approximately been used to make a theoretical In 2002 the EIB approved a EUR EUR 16 billion for air transport estimation of the likely addition- 150 m loan for the construction and EUR 1.5 billion for aircraft al annual CO2 emissions from a of a fifth runway at Schiphol manufacturing. selection of EIB-financed airport Airport, in spite of the airport’s expansion projects: large contribution to Dutch C02 emissions (around 3.79 per cent The total likely CO2 emissions of the Netherlands’ total emis- from the EIB’s above selected sions in 2003, compared to 2.05 airport expansion projects, if per cent in 1990). The project cost Selected EIB-backed airport expansion projects and estimated additional CO2 emissions per year Capacity Extra capacity Additional CO2 Percentage increase Airport Project before (passengers per if capacity used in airport’s CO2 expansion year) (estimated) emissions 2 869 750 tonnes Schiphol 5th Runway 45 million 13 million 32.5% per year Warsaw Airport new 1 690 000 tonnes 3.5 million 6.5 million 185.7% passenger terminal per year Prague Airport new 910 000 tonnes per 6.5 million 3.5 million 53.8% passenger terminal year Cork Airport new 2.18 780 000 tonnes per 3 million 137.6% passenger terminal million year Beijing International ‘almost double’ 7 800 000 tonnes Airport 3rd runway and 35 million (additional 30 85.7% per year new terminal million assumed) 9 000 000 tonnes Heathrow 5th Terminal 60 million 30 million 50% per year Paris Roissy-Charles 6 500 000 tonnes 30 million 25 million 83.3% de Gaulle 3rd runway per year Munich 6 500 000 tonnes 20 million 25 million 125% Terminal 2 per year Madrid Barajas 9 100 000 tonnes 42 million 35 million 83.3% Terminal 4 per year 2)
  3. 3. European Investment Bank lending in the transport sector - Climate impacts EUR 382 million and increased the airport’s capacity from 45 million passengers in 2001 to 58 million in 2005. If this capacity is to be fully used, the extra 13 mil- lion passengers will be respon- sible for approximately 2 750 000 tonnes of new CO2 emis- sions per year – an increase of 32% compared to the airport’s 2003 emissions. Climate change considerations barely featured in the project’s development. Staggeringly the EIB approved the loan before the full Environmental Impact Assessment process – for the whole airport, not just the new runway – was even completed. Airline expansion ratory in 2005 showed that al- The EIB’s use of public money though jet planes have increased projects to finance this project is par- in efficiency since they were in- ticularly questionable since it is The EIB’s project information troduced, claims about the de- likely that funding could have suggests that airline expansions gree of increased efficiency been found from other sources. have been financed, but the rel- have been exaggerated and Although it can be claimed that evant airlines (surveyed for this also fail to take into account that the EIB was following EU policy report) have not replied to in- the pre-jet planes of the early in the sense that Schiphol is formation requests and it is not 1950s were as fuel-efficient as part of the TEN-T network, at clear which projects were for re- today’s aircraft. the same time the project con- placements and which involved tradicts the 6th EAP and trans- fleet expansion. The climate im- Such factors need to be taken port White Paper. Rather than pacts of such projects are there- into account and thorough cal- limiting transport demand, pro- fore not clear. culations need to be made, in moting a shift to railways, and place of the current situation internalising the external costs The EIB has taken the view that where the EIB and others sim- of transport, the EIB has encour- replacing aircraft achieves low- ply assume that controversial aged the growth of aviation and er emissions and greater fuel projects lead to positive climate its inevitable emissions. economy. Yet this approach ig- impacts. nores some important climate For more information, see the impacts: Road transport 2003 report “Flying with Big Busi-  Even if there is no expan- ness: The European Investment sion involved, there may still Road transport alone counted Bank & The Aviation Industry”, be an overall increase in CO2 for 21.3% of the EU 15’s CO2 available for download at: www. emissions because older emissions in 2004. The EIB pro- planes may be sold and may vided loans of approximately ation_report_11_03.pdf well continue to be used for sev- EUR 37 381.4 million for roads eral years. globally between 1996 and This publication also provides  Any improvement in ef- 2005, of which EUR 26 508 mil- more information about the EIB’s ficiency must be compared lion went to mostly new or ex- role in the highly controversial with any rise in the number of panded motorways. It also pro- 5th Terminal for Heathrow Air- flights caused by the same or vided EUR 8 947 million in loans port in London, a project that is other EIB projects. to the car manufacturing and likely to result in an extra 9 000  Research undertaken by the tyre industries, representing fur- 000 tonnes of CO2 per year. Dutch National Aerospace Labo- ther support for road transport. 3)
  4. 4. European Investment Bank lending in the transport sector - Climate impacts While some of the traffic us- optimisation of usage of the ex- cies of the EU, fully integrates ing new roads is simply moving isting infrastructure have not environmental considerations from more congested roads, the been seriously examined. They into transport financing and phenomenon of ‘induced traf- point out that the A5 would in- contributes to developing more fic’, identified in the landmark duce additional traffic through sustainable transport. UK 1994 SACTRA study, means Vienna, creating a bottleneck. that constructing new roads The EIB must: directly leads to an increase in The cost-benefit analysis for the 1. Call a halt to investments CO2 emissions, as more people project is unrealistic as it states into the already heavily subsi- choose to use road transport that with the A5 there would dised aviation industry. because of the new capacity be fewer traffic kilometres per 2. Ensure that investments in available. person per day than without rail, urban public transport, and the A5. The Austrian Ministry of inter-modal transport continue On toll roads with direct tolls the Environment questioned this to increase and make up the vast – several of which have been fi- and stated in its official Environ- majority of the EIB’s transport nanced by the EIB as public-pri- mental Impact Assessment com- investments in each country. vate partnerships in which the ments that the A5 would lead to 3. Make maintenance or safety private partner obtains a propor- an additional 40 000 tonnes of improvements a priority for the tion of its income based on traf- GHG emissions annually. Since EIB financing in the road sector. fic demand – high traffic levels, Austria’s GHG emissions rose by By 2010 the share of road trans- and therefore CO2 emissions, around 15.2 per cent between port investments in the EIB port- are actually needed to recover 1990 and 2004 and that those folio should be halved to make the road investment, thus re- from road transport rose by 88 space for the development of moving any incentives for traffic per cent, further increases are a sustainable transport modes. reduction. matter of serious concern. 4. Increasingly support projects In 2002 the EIB announced that that limit transport growth. The project is an example of it was starting to quantify the 5. Only loan to the car industry poor strategic transport plan- climate impacts of its projects. for R&D that secures more ef- ning and the failure to take cli- It regrettably remains unknown ficient, cleaner and safer tech- mate change objectives into ac- whether this is having a signifi- nologies, and not for manufac- count. The fact that it has been cant impact on the EIB’s deci- turing. approved by the EIB shows that sions to finance road projects. 6. Set year-on-year limits and the bank’s policies are insuf- targets for reductions in the ficient to verify that transport greenhouse gas emissions from projects are justified and that Vienna-Mikulov-Brno its projects. they will not entail excessive Motorway (A5 motorway GHG emissions. Austria/R52 high-speed For a full set of recommenda- road Czech Republic) tions, see Bankwatch’s new report “For further information, see on the EIB’s lending for climate- the NGO letter sent to EIB Presi- In August 2005 the EIB approved damaging transport projects. dent Maystadt (October 4, 2006) a loan of up to EUR 350 million CEE Bankwatch Network, for the Ostregion Autobahn sec- Jicínská 8, Praha 3 - 130 00, room/documents.shtml tion of the controversial A5 mo- Czech Republic, torway in Austria, which would Telephone + (420) 274 816 571,, connect with the R52 express Climate-related road in the Czech Republic to recommendations: form the Vienna-Mikulov-Brno motorway. The loan has not yet The EIB needs to dramatically been disbursed, as there are improve its project selection ongoing legal cases against the procedures to transform itself motorway project. from a client-driven bank that finances a series of transport Critics of the project argue that projects into a truly policy-driv- the A5 is unnecessary, and that en bank that succeeds in balanc- the alternatives, including the ing the different transport poli- 4)