This report presents the objectives, methodology, procedures and main findings of the OECD project "Strengthening public finance capacity for green investments in the EECCA countries". Between 2016-19, the project aimed to help set the partner countries (Kazakhstan, Kyrgyzstan and Moldova) on a sustainable path of development by reducing the energy and carbon intensity of their economies. Working with the relevant ministry in each country, the project designed public investment programmes in line with good international practices. These programmes sought to address key objectives of the countries' environmental and climate-related policies. The Clean Public Transport Programmes focus specifically on reducing air pollution and greenhouse gas emissions from the target sector, primarily in large urban areas. They aim to demonstrate how to use scarce public funds to encourage private sector investment in projects that generate significant environmental and socio-economic benefits alike.
Promoting Clean Urban Public Transportation in Kazakhstan, Kyrgyzstan and Moldova
Abstract
Executive Summary
Moving forward on energy-efficient local transport
The governments of Kazakhstan, Kyrgyzstan and Moldova have committed to the development of energy-efficient local public transport. This includes vehicles powered by cleaner fuels or technologies, such as compressed natural gas (CNG)/liquefied natural gas (LNG), liquefied petroleum gas (LPG), diesel Euro 5/6 and electricity. However, in many cases, their programmes are overly ambitious, costing is imprecise, timeframes are unrealistic, and budgets and sources of funding are not specified. In most cases, the institutional set-ups for implementation are not well designed.
With financial support from the OECD, the three countries embarked on a project known as the Clean Public Transport (CPT) Programmes. These programmes help estimate overall implementation costs and find sources to reduce the negative environmental consequences of public transport in large urban centres. This report synthesises the objectives, methodology, procedures and main findings of the three individual country reports into a single document.
Findings
Implementation in two phases will replace many long-depreciated vehicles
In Kazakhstan, there will be 1 827 new urban public transport vehicles in 19 towns/cities (386 CNG and 1 441 LPG buses) after the scaling-up phase (Scenario 1), requiring an investment of USD 179.47 million. Assuming the more ambitious scaling-up phase (Scenario 2) is implemented, 21 towns/cities would have 2 783 new urban public transport vehicles (953 CNG and 1 830 LPG buses), requiring an investment of USD 275.89 million.
In Kyrgyzstan, both phases will result in 1 363 urban, suburban and inter-city public transport vehicles – 1 158 CNG buses, 115 trolleybuses and 90 modern diesel buses. The investment costs are estimated at USD 198.8 million.
In Moldova, the pilot and the scaling-up phase (Scenario 1) will provide 735 new urban and suburban vehicles (62 trolleybuses, 393 buses and 280 minibuses), requiring an investment of USD 150.2 million. Assuming the more ambitious scaling-up phase (Scenario 2) is implemented, Moldova would have 2 510 new urban, suburban and inter-city vehicles (62 trolleybuses, 1 456 buses and 992 minibuses with CNG, LPG and modern diesel engines) at an investment cost of USD 498.6 million.
Scenarios emphasise large buses run on electricity and natural gas
As a rule, priority is given to large (over 10-m long) buses over minibuses. Electricity (possibly generated by renewable sources) and natural gas are preferred to petroleum gas or diesel fuels.
Public subsidies will be needed to support the transition to cleaner vehicles
Public financial support (subsidies in the form of a grant) will be necessary to help public transport operators (both municipal and private) upgrade to a modern and environmentally friendly fleet.
The programme is expected to meet targets for reducing greenhouse gas and air pollution emissions
Estimates for decrease in CO2 emissions compared to baseline:
Kazakhstan: 68 367 tonnes/year (27.2%)1
Kyrgyzstan: 68 506 tonnes/year (47.3%)
Moldova: 73 944 tonnes/year (42.2%)
Estimates for decrease in NOx emissions compared to baseline
Kazakhstan: 1 724 tonnes/year (83.5%)
Kyrgyzstan: 1 236 tonnes/year (86.4%)
Moldova: 1 444 tonnes/year (83.5%)
Estimates for decrease in PM2.5 emissions compared to baseline
Kazakhstan: 50 tonnes/year (98.2%)
Kyrgyzstan: 29 tonnes/year (98.7%)
Moldova: 35 tonnes/year (98.8%)
Estimates for decrease in SO2 emissions compared to baseline
Kazakhstan: 39 tonnes/year (83.3%)
Kyrgyzstan: 27 tonnes/year (99.6%)
Moldova: 29 tonnes/year (88.9%)
Estimates for decrease in CO emissions compared to baseline
Kazakhstan: 315 tonnes/year (56.1%)
Kyrgyzstan: 307 tonnes/year (94.0%).
Moldova: 301 tonnes/year (76.3%)
The programme can achieve public service objectives
Purchasing modern (brand-new) vehicles would increase reliability and comfort. Extending/improving service delivery outside of cities would increase outreach in Kyrgyzstan and Moldova. This would be in line with the country’s transport strategies and programmes (municipal and national).
The programme can support socio-economic development
By modernising the urban, suburban and inter-city transport fleet, the CPT Programme will contribute to the socio-economic development of municipalities and, ultimately, of the country.
Better public transit can improve mobility, which fosters productivity (access to jobs, markets) and social inclusion (access to hospitals, schools) especially for low-income groups.
The programme could also stimulate the domestic market to produce, or at least assemble, modern buses and trolleybuses. Public grants for private and municipal public transport operators could help purchase new vehicles rather than modernise/convert engines of used (depreciated) vehicles. This approach could also create jobs.
Potential obstacles to implementation
Technical issues
non-existent infrastructure (e.g. public transport networks, availability of cleaner fuels/sources of power)
insufficient or not applied technical and quality standards (both vehicles and fuels)
distorted pricing signals (no support for cleaner fuels, technologies or behaviour)
Institutional issues
lack of capacity and experience in the public sector
Psychological issues
status quo lock-up and related difficulties in changing mindsets.
Recommendations
Strengthen institutions that prepare and implement programmes.
Strengthen technical regulations in transport:
Strengthen (diesel) engine emission norms and bring them closer to European standards.
Strengthen (diesel) fuel standards.
Strengthen technical inspection standards.
Introduce adequate pricing signals.
Increase support to producers of clean buses.
Adjust the fare system for urban public transport.
Improve inter-ministerial co‑operation in implementation of the transport strategy.
Change public tenders for providing public transport in urban centres.
Encourage energy efficiency in public transport.
Conclusions
Getting beyond tools: The designed CPT Programmes are more than technical tools and associated costs. They are roadmaps to bring forward a greener path of development.
Turning obstacles into opportunities: The CPT Programmes include only a limited amount of hard infrastructure investments. Therefore, obstacles can be turned into opportunities relatively quickly.
Planning beyond annual cycles: Fiscal policy should look beyond annual budgetary cycles. Environmental benefits, in particular, need time to materialise, and need to be planned sufficiently in advance. In other words, the programme should adopt medium-term expenditure frameworks.
Improving regulations and policies: Improving the regulatory framework and creating policy structures take time. However, these are critical to building transport services that are energy-efficient, environmentally friendly and economically viable.
Seizing momentum: This report summarises the main proposals tailored to the target sector (such as technical regulations or pricing signals). However, it also includes overarching challenges (inter-ministerial co-operation or public tenders) that are largely shared by the three focus countries. Each country has a similar starting position, partly based on Soviet legacy. However, the first mover in the region can still enjoy advantages over the others, which provides a strong incentive to act immediately.
Note
← 1. The values reflect only emissions of the vehicles to be replaced (baseline value) and the new fleet (target value), not the total emissions from all public transport in Kazakhstan.
