new and upgraded urban roads. These investments will improve the city’s transportation system, but are costly and threaten greater energy use and air pollution.

A central issue in Shanghai’s development is the role of personal vehicles, especially cars. The city currently devotes little land to roads and has only 650,000 cars and trucks, very few of which are privately owned, placing vehicle ownership levels well below those of virtually all cities of similar income. Even with this small number of vehicles, Shanghai already suffers from serious transport-induced air pollution and traffic congestion.

Shanghai city planners project a quadrupling of cars and trucks in the city by 2020. This projected increase is premised principally on two factors: (1) rapid income growth, which will make car ownership possible for a much larger segment of the population; and (2) falling vehicle prices resulting from China’s imminent accession to the World Trade Organization (WTO). Prices are expected to fall because of increased competition, compulsory reductions in vehicle tariffs, and easier access to consumer credit.

The magnitude of the increase in vehicle use is not certain, however. Even apart from WTO membership, vehicle ownership and use—and their environmental implications—will be strongly influenced by three interrelated policy debates: industrial policy toward the automotive industry, air quality policy, and transportation and urban growth policy.

The city’s decisions about vehicle use will be critical in shaping Shanghai’s future. In this case study, which addresses the forces about to transform Shanghai’s transportation system, two transportation scenarios of the future are constructed, drawing upon extensive interviews with decision makers and experts in Shanghai and Beijing. One scenario is premised on rapid motorization, the other on dramatic interventions to restrain car use and energy consumption. Neither is a “business-as-usual” scenario, because this characterization is meaningless in a time of massive investments and policy shifts. Rather, these scenarios are meant to characterize two competing transportation trajectories, taking as given the projected strong economic growth. If the economy grows more slowly, motorization will be slower. Even in the most conservative scenario, though, vehicle travel, vehicle ownership, and energy use increase dramatically.

Caution is urged in generalizing the findings of this case study to other cities in developing nations. Shanghai is not a typical Asian city, given its surging economy and its world-class planning capabilities and strong government institutions. However, the conditions for reining in growth are more propitious here than perhaps any other megacity of the world. If the city is effective at restraining vehicle use, Shanghai may serve as a model for other cities in the developing world.

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