Getting the Green Light: How can we fairly share the costs of decarbonising transport?

The next big hurdle on Britain’s path towards a green economy is decarbonising every-day travel. Emissions from getting around – from cars, vans, buses, trains and planes – make up the greatest share of the country’s carbon footprint, and have hardly shrunk in the past decade. So, if we want to go green, we need to overhaul the ways in which families get from A to B. Moving from polluting petrol to cheaper electric vehicles (EVs), ensuring lower income families can access EVs or affordable public transport, and that flying pays its way, are vital if the transition is to achieve widespread public consent and support.

1. Getting the green light Sharing the costs, and benefits, of low carbon travel Dr Caroline Mullen, Associate Professor, Institute for Transport Studies, University of Leeds Ruth Cadbury MP, Chair, Transport Select Committee Jonathan Marshall, Principal Economist, Resolution Foundation Chair: Lord David Willetts, President, Resolution Foundation October 24 @ resfoundation

2. 2 Historical greenhouse gas emissions from transport and projections under CCC balanced pathway, by transport category: UK   Notes: Dark shaded indicates historical emissions, light shaded indicates projections based on net zero consistent emissions savings. Transport share of total emissions excludes the removals sector, to show transport’s share of positive emissions. Source: RF analysis of DfT transport emissions data, DESNZ emissions data, and CCC Carbon Budget 6 data. @resfoundation Emissions from transport need to start falling rapidly

3. 3 Monthly household expenditure on cars by income deciles, and monthly lease costs for selected electric cars: UK 2023-24 Notes: Vehicles in the cluster of lines are the Dacia Expression, MG EV4, Dacia Spring, Fiat 500, Suzuki Swift, Citroen C3 and Hyundai i10, with monthly payment figures taken from manufacturer websites or leasing.com. Household spending on vehicles uprated from 2022-23 LCFS data in line with CPI. Source: RF analysis of ONS Living Costs and Food Survey, ONS CPI indices, vehicle manufacturer, leasing.com data. @resfoundation EVs are getting cheaper, so we are in a new area for policy

4. 4 Proportion of households in each income decile eligible for different electric car salary sacrifice discount rates, based on a £200 monthly lease cost: UK 2022-23 Notes: Figure shows the proportion of households that would eligible for discounts at the whole rate shown (i.e. without falling into a lower marginal tax band) if £200 per month was paid out of the highest paid resident’s gross (pre-tax) salary. Working-age households only. Source: RF analysis of Households Below Average Income data. @resfoundation EV purchases are still incentivised through arbitrary and regressive tax breaks

5. 5 Proportion of households with access to off-street parking, by income quintiles, tenure, and age: England 2021-22 Notes: Off-street parking defined as having a garage or ‘other off-street parking’. Source: RF analysis of MHCLG, English Housing Survey. @resfoundation Those who can charge at home will see bigger benefits from EV driving

6. 6 Number of on-street (kerbside) electric car chargers installed, by income deprivation quintile of the neighbourhood in which the charger is located, and need imparted by the housing stock: England and Wales, Q1 2022-Q2 2024 Notes: For more details see: A Corlett et al, Getting the Green Light, Resolution Foundation, October 2024.. Source: RF analysis of Zapmap ; ONS, 2021 Census;, ONS, National Statistics LSOA IMD lookups 2019; Settlement types are from C Baker, City & Town Classification of Constituencies & Local Authorities, House of Commons Library, June 2018. @resfoundation The public charging network is growing, and the right chargers are going in the right places

7. 7 Average EV charging prices by charger type (left panel), and change in price between January 2023 and June 2024, by charger type (right panel): UK Notes: Charging prices shown are based on flat rate pricing. Source: RF analysis of AA Recharge data. @resfoundation But the cost of using public chargers is too high

8. 8 Marginal real cost of car and public transport journeys: 2010 to 2050: UK, 2010=100  Notes: For more details see: A Corlett et al, Getting the Green Light, Resolution Foundation, October 2024.. Source: RF analysis of DfT , Transport Analysis Guidance data book; Office of Road and Rail, Rail ticket statistics; CCC, Sixth Carbon Budget data; DfT , Bus Price Index Statistics. @resfoundation Driving will get cheaper, but public transport is unlikely to follow suit

9. 9 Proportion of people in each income quintile eligible for a railcard (left panel) and the proportion in each income quintile eligible for a concessionary bus pass (right panel) UK, 2022-23     Notes: For more details see: A Corlett et al, Getting the Green Light, Resolution Foundation, October 2024.. Source: RF analysis of ISER, Understanding Society. @resfoundation We should think about how we offer travel discounts

10. 10 Annual household emissions from selected sectors in 2019 (left) and projected for 2040 (right), by income quintiles: UK​ Notes: Sectors are included where emissions are relatively easy to attribute across UK households. Source: RF analysis of HMT Net Zero Review, CCC Sixth Carbon Budget data.​ @resfoundation Emissions from flying will get even more top heavy in the future

11. 11 Approximate carbon prices in 2024 Notes: *Carbon removal cost based on Google’s $280 contract. ETS and CORSIA market prices as of 21 September 2024. ​ BOT excludes flights to Gibraltar, which are part of the UK/EU ETS. Electricity cost includes the Carbon Price Support, and would include VAT in the case of cars charged away from home. Fuel Duty rates excluding temporary 5p discount. CORSIA pricing applies only beyond a baseline of 85 per cent of 2019 emissions. Source: RF analysis. @resfoundation We have an inconsistent approach to pricing flying emissions

12. 12 Transport is a big deal for both emissions and household finances Cutting these emissions will bring costs, but also large benefits – these need to be shared fairly EV upfront costs are falling, and all drivers should be able to access low cost chargers Those reliant on public transport should not be excluded from big savings Carbon taxes on flying should be expanded to cover all flights @resfoundation Key takeaways

13. Getting the green light Sharing the costs, and benefits, of low carbon travel Dr Caroline Mullen, Associate Professor, Institute for Transport Studies, University of Leeds Ruth Cadbury MP, Chair, Transport Select Committee Jonathan Marshall, Principal Economist, Resolution Foundation Chair: Lord David Willetts, President, Resolution Foundation October 24 @ resfoundation