Passenger transport demand (CSI 035) - Assessment published Sep 2010

Indicator definition

Passenger transport demand is defined as the amount of inland passenger- kilometre travelled every year in the EEA32. Inland passenger transport includes transport by passenger cars, buses and coaches, and trains. There is no agreement among the EU Member States on how to attribute the passenger-kilometres of international intra-EU flights, therefore data for air passenger travels are deemed unreliable and not included.

Modal split is defined as the proportions of total passenger-kilometre allocated to different transport modes every year.

The decoupling indicator is defined as the annual changes of the ratio between passenger-kilometres (inland modes) and GDP (Gross Domestic Product in constant 2000 EUR) growth. 

Units

The unit used to express passenger transport volume is the passenger-kilometre (pkm), which represents one passenger travelling a distance of one kilometre. It is based on transport by cars, buses and coaches, and trains. 

GDP is Gross Domestic Product expressed in constant euro indexed to the year 2005.

Passenger transport demand and GDP are shown as an index (2005=100). The ratio of the former to the latter is indexed on year t-1 (i.e. annual decoupling/intensity changes) in order to be able to observe changes in the annual intensity of passenger transport demand relative to economic growth (GDP).

Policy context and targets

Context description

The EU set itself the objective of reducing the link between economic growth and passenger transport demand ('decoupling') in order to create a more sustainable transport system. Reducing the link between transport growth and GDP has been a central theme in EU transport policy to minimise the negative impacts of transport:

• The objective of decoupling passenger transport demand from GDP was first mentioned in the Transport and Environment integration strategy that was adopted by the Council of ministers in Helsinki (European Council, 1999). Here, the expected growth in transport demand was named as an area where urgent action was needed. In the sustainable development strategy that was adopted by the European Council in Gothenburg, the objective of decoupling is set in order to reduce congestion and other negative side-effects of transport (European Commission, 2001a): “A sustainable transport policy should tackle rising volumes of traffic and levels of congestion, noise and pollution [.]. Action is needed to bring about a significant decoupling of transport growth and GDP growth, in particular by a shift from road to rail, water and public passenger transport”.
• Shifting passenger transport from road to water and rail is an important strategic element in the EU transport policy. The objective was first formulated in the Sustainable Development Strategy in 2001(European Commission, 2001a).
• In the White Paper on the Common Transport Policy "European Transport Policy for 2010: Time to Decide", (European Commission, 2001b) the Commission outlined concerns for curbing the demand for transport, which included the fact that economic growth will almost automatically generate greater needs for mobility, therefore increasing demand for goods services and for passengers. The objective of breaking the link between economic growth and transport growth was therefore considered as the basis for the White Paper for the next decade. A number of measures were subsequently proposed within the White Paper aimed at achieving mode shift and decoupling from GDP.
• In the review of the Transport and Environment integration strategy in 2001 and 2002, the Council reaffirmed the objective of reducing the link between the growth of transport and GDP (European Council, 2002a and 2002b). The review also states that modal split should remain stable for at least the following ten years, even with further traffic growth.
• In the Sixth Community Environmental Action Programme, decoupling of economic growth and transport demand is named as one of the key objectives in order to deal with climate change and to alleviate health impacts from transport in urban areas.

• The European Commission's White Paper on transport published in 2011, " Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system" acts as a framework to guide future policy developments in the transport sector over the next decade. The White Paper sets out 10 goals for a competitive and resource-efficient transport system. These goals serve as benchmarks for achieving the target of a 60 % reduction in GHG emissions from transport by 2050 target (from 1990 levels).

Targets

To decouple transport growth significantly from GDP growth in order to reduce negative environmental effects of transport and congestion.

Related policy documents

• 10917/06
  Review of the EU Sustainable Development Strategy (EU SDS): Renewed Strategy, by the Council of the European Union, No. 10917/06.
• A sustainable future for transport
  In 2001, the Commission issued a White Paper setting an agenda for the European transport policy throughout 2010. This programme was updated in the mid-term review of 2006. Approaching the end of the 10-year period, it is time to look further ahead and prepare the ground for later policy developments.
• COM (2001) 264 final
  A sustainable Europe for a better world: A European Union strategy for sustainable development. Communication from the Commission to the Council and the European Parliament. COM (2001) 264 final.
• Keep Europe Moving: Sustainable Mobility for our Continent
  European Commission, 2006. Keep Europe Moving: Sustainable Mobility for our Continent. Mid-term review of the EC’s 2001 Transport White Paper.
• Transport White paper 2011
  Roadmap to a Single European Transport Area - Towards a competitive and resource efficient transport system
• WHITE PAPER European transport policy for 2010: time to decide
  The need for integration of transport in sustainable development

Methodology

Methodology for indicator calculation

To measure the decoupling of passenger demand from economic growth, the volume of passenger transport relative to GDP (i.e. the intensity) is calculated. Separate trends for the two components of intensity are shown for the EU-32. Relative decoupling occurs when passenger transport demand grows at a rate below that of GDP. Absolute decoupling occurs when passenger transport demand falls while GDP rises or remains constant.

For EU Member States according to the Regulation No 1172/98 (European Council, 1998), road transport data are based on all movements of vehicles registered in the reporting country. All other transport data refer mainly to movements within the national territory, regardless of the nationality of the vehicle. Eurostat contains data on different transport modes. A detailed description of concepts used and data collected in the transport database can be found in Eurostat's concepts and definitions database.

Methodology for gap filling

No need for gap filling

Methodology references

• Concepts used in Eurostat's transport database
• Eurostat's structural indicators for transport
• Eurostat's web page for data and metadata on transport statistics
• European Council, 1998. Council Regulation (EC) No 1172/98 on statistical returns in respect of the carriage of goods by road, 25 May 1998.

Uncertainties

Methodology uncertainty

To answer the question of whether passenger demand is being decoupled from economic growth the intensity of passenger transport demand relative to changes in real GDP were looked at. A reduction in intensity should signal relative decoupling, as a relative break in the correlation between transport demand and economic growth would then be achieved. 

GDP in constant prices simply takes away the effect of price increases from year X to year Y but it does not guarantee that GDP in year X for country A is comparable to GDP in country B (as year X is the result of price increases from previous years etc). Therefore, cross-country comparisons of transport intensities based on real GDP may be relevant for trends (i.e. growth/changes over time) but not for comparing intensity values in specific years. In order to know whether passenger transport intensity is higher in one country than in another, GDP should ideally be measured in purchasing power parities. These are currency conversion rates that both convert to a common currency and equalise the purchasing power of different currencies (i.e. they eliminate the differences in price levels between countries).

It is arguable, however, whether purchasing power parities are the best currency unit for time-series analysis. One way to avoid such problems is to use population instead of GDP. This would in principle be appropriate for the comparison of intensities between countries as well as for looking at trends over time. It also seems to be more equitable. To respond to the question of whether or not we are decoupling transport demand from economic activity (i.e. looking at growth rates over time) we would still need to use GDP. 

A decoupling indicator compares pressures on the environment to changes in the relevant economical variables to which the environmental pressures are causally linked. The present indicator compares the pkm growth rate as a proxy of the pressures on the environment caused by transport. It is considered a good proxy for the intended analysis, even though it is known to be inaccurate, as pkm in isolation do not fully explain the level of environmental pressures. 

Data sets uncertainty

The two indicators "volume of passenger transport relative to GDP" and "modal split of passenger transport" are part of the European Commission's structural indicators. As such, their components are already calculated and downloadable in their final form from DG MOVE database.

According to the latest metadata, all data should be based on movements within the national territory, regardless of the nationality of the vehicle. However, the data collection methodology is not harmonised at the EU level. The dataset for total passenger transport demand for many countries is incomplete, mainly due to lack of data on transport by passenger car.

Vehicle occupancy is a key factor playing a key role in the assessment of whether or not there is “an effective” decoupling of passenger transport demand from GDP growth. Since occupancy rates are not available, a sound assessment of passenger transport trends becomes very difficult. One could not, for instance, properly determine what share of the trend observed for passenger-kilometres is caused by changes in the average number of passengers in the vehicle. For a complete picture of transport demand and the related environmental problems, it would therefore be valuable to complement the data on the number of passenger-kilometres with vehicle-kilometres.

Rationale uncertainty

The main policy question relates to whether passenger demand is being decoupled from economic growth. Thus, one needs to monitor trends in the intensity of passenger transport demand relative to changes in GDP at constant prices. The ratio of inland passenger transport to GDP could increase even though the actual passenger transport volume falls. Similarly, the indicator could fall despite a possible increase in the volume of passenger transport. What makes the ratio increase or decrease is the relative change in the volume of passenger transport (numerator) to GDP (denominator). As long as the numerator increases more (or falls less) than the denominator, the indicator "passenger transport demand" will increase. The indicator does indeed summarise "passenger transport intensity". From an environmental point of view, it is important not to overlook trends in the total volume of passenger transport. The actual absolute values are key to understand environmental pressures originating from increased passenger transport demand.

Intensity can be also explained using the concepts of relative and absolute decoupling. Relative decoupling in passenger transport demand occurs when passenger transport volume grows at a rate below that of GDP. In this case, however, the volume of passenger transport may well increase as long as this increase is less rapid than the one observed for economic activity. Absolute decoupling in passenger transport demand occurs when the volume of passenger transport falls and GDP increases or remains unchanged. If GDP falls, there is absolute decoupling only if the fall in passenger volumes is greater than the contraction of GDP. This is important since from a purely statistical point of view one could imagine a situation where no absolute decoupling is observed and yet this may be good for the environment. For example, both GDP and passenger volumes could fall, with the latter falling less than the former. The fact that the volume of passenger transport goes down is positive for the environment but the hypothetical situation just described does not strictly correspond to absolute decoupling.

Even if two countries have the same passenger transport intensity or show the same trend over time there could be important environmental differences between them. The link to environmental impact has to be made on the basis of the energy consumption and fuels used to satisfy passenger demand. The primary fuels today are gasoline and diesel, but other options are becoming available.