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1 INTRODUCTION The transportation sector is a significant contributor to global greenhouse gas emissions and energy usage. Transportation as a whole accounts for 19% of global energy use1. In the U.S., with the largest transportation footprint, the sector represents 28% of total greenhouse gas emissions. The International Energy Agency (IEA) predicts emissions from transportation to grow by 50% by 2030 and by 100% by 2050 from 2007 levels2. The Energy Information Administration (EIA) predicts similar high growth in energy consumption, rising by 39% by 2030 and 92% by 2050 from 2006 levels3. Within the transportation sector, freight is expected to experience the fastest growth. Freight accounted for 27% of transportation energy use globally in 20064. In the United States it represented 28% of transportation energy use, or 8% of overall energy use. Freight is expected to grow by 30% by 2050, compared with 20% for the sector as a whole. This growth is not a new development, as emissions from transportation have been increasing for the past 30 years. From 1973 to 1992 emissions and energy use from freight transport grew faster than any other sector in an analysis of 10 industrialized countries5. The growth in emissions from freight has occurred despite improvement in the efficiency of vehicles, primarily due to increased demand and a shift to less efficient modes. The IEA projections call for a 50% increase in truck freight demand by 20506. Maritime shipping has seen a 15% decrease in emissions intensity over the last 20 years, but this has been more than offset by a doubling in the amount of goods shipped7. The IMO projects that by 2050 maritime traffic will grow by between 150% and 300% from 2007 levels, driven primarily by a 400% to 800% increase in container traffic8. The growth in demand has been coupled with a shift to less efficient modes of transport. Between 1980 and 2009 total freight toni-miles in the United States increased by 26%. Trucking increased its modal share from 18% to 31% during that time, primarily at the expense of domestic water transportation. This continues a long-term trend seen across countries, where overall freight activity and share of trucking are coupled with GDP growth9. Given the projected growth in demand for freight transportation, a number of strategies for reducing emissions must be considered. Possible approaches can be grouped into three categories: improved technological efficiency, improved operational efficiency, and shifting to more efficient modes.10 The Pew Center on Global Climate Change identified a possible 7-10% reduction in freight emissions achievable by 2030 in the United States being the result of improved logistics11. i Throughout this document, the use of the word ton shall be used to reference a short ton (2,000 lbs.). 3
In order to achieve these improvements firms involved in freight transportation need tools to measure the impacts of freight activity. Many firms measure their carbon emission at an organization level, but the methods used for organizational reporting are often inadequate to the needs of supply chains that span organizational boundaries. A number of programs have emerged to deal with these inadequacies, but as of yet no consistent, standardized approach has emerged. OBJECTIVES The objectives of this project are to (1) define a standardized, conceptual approach to assessing global greenhouse gas emissions of the transportation component of supply chains; (2) critique the current methods and data used to quantify greenhouse gas (GHG) emissions of the transportation component of supply chains; and (3) prepare a detailed work plan listing the specific tasks necessary to develop a decision tool to help estimate the carbon footprint of the transportation component of supply chains and to assess potential supply chain modifications to reduce these impacts. APPROACH To meet the objectives of this project four primary tasks were identified: 1. A state of the art practice review2. Identify the qualities of an effective tool3. Evaluate existing programs and techniques4. Develop a work plan for a decision toolIn the first part of this research we identified a list of supply chain carbon footprint measurement programs and methodologies. The list was based on previous research work at the MIT Center for Transportation & Logistics (CTL) that had identified more than 60 programs and tools, and supplemented with additional programs identified through literature review; contacts within industry, academia, government, and non-profits; and feedback from the panel. After compiling a comprehensive list of programs CTL analyzed them to develop a definition of the transportation component of the supply chain and the associated carbon footprint measurements. The results of this task are described in Chapter 2. The objective of the second phase was to identify the qualities of an effective tool for measuring the GHG emission profiles of the transportation component of major supply chains. CTL identified current performance measurement frameworks drawn from supply chain performance measurement, management accounting, and environmental reporting. Using these frameworks CTL developed a list of criteria based on analysis of the similarities and differences of the performance frameworks. The results of this task are discussed in Chapter 3. The objective of the third phase was to evaluate the programs identified in the first task using the qualities identified in the second task. The programs were evaluated using the Analytic Hierarchy Process (AHP) to help vet, rank, and prioritize the criteria at a workshop held at MIT. The results of this evaluation were a 4
quantitative evaluation used to identify the strengths and weaknesses of existing programs according to criteria prioritized by the stakeholders at the workshop. The results of this task are covered in Chapter 4. The objective of the fourth phase was to prepare a detailed work plan to develop a decision tool for estimating the carbon footprint of the transportation component of the supply chain based on the results of Tasks 1-3. CTL has developed the requirements for a decision tool based on the concept of three-tier software architecture. This includes a description of the proposed three-tier architecture with illustrative examples linking the architecture with carbon footprint calculations. A work plan was developed describing the requirements for each tier broken down in to discrete tasks, and potential timeframes for two possible development paths were created. The results of this task are presented in Chapter 5. 1 IEA (2009). Transport, Energy and CO2: Moving Towards Sustainability, OECD. 2 IEA (2009). Transport, Energy and CO2: Moving Towards Sustainability, OECD. 3 EIA (2011). Annual Energy Outlook 2011, U.S. Energy Information Administration. 4 IEA (2009). Transport, Energy and CO2: Moving Towards Sustainability, OECD. 5 Schipper, L., L. Scholl, et al. (1997). "Energy use and carbon emissions from freight in 10 industrialized countries: an analysis of trends from 1973 to 1992." Transportation Research Part D: Transport and Environment 2(1): 57-76. 6 IEA (2009). Transport, Energy and CO2: Moving Towards Sustainability, OECD. 7 IEA (2009). Transport, Energy and CO2: Moving Towards Sustainability, OECD. 8 Buhaug, O. (2008). Assessment of CO2 Emission Performance of Individual Ships: The IMO CO2 Index. Marintek. Trondheim. 9 Kamakate, F. and L. Schipper (2009). âTrends in truck freight energy use and carbon emissions in selected OECD countries from 1973 to 2005.â Energy Policy 37(10): 3743-3751. 10 Vanek, F. M. and E. K. Morlok (2000). "Improving the energy efficiency of freight in the United States through commodity-based analysis: justification and implementation." Transportation Research Part D: Transport and Environment 5(1): 11-29. 11 Greene, D. L. and S. E. Plotkin (2011). Reducing Greenhouse Gas Emissions from U.S. Transportation, Pew Center on Global Climate Change. 5