On the move: Reducing car usage and ownership in China, Latin America, and other developing economies
Mexico City intersection

Mexico City was one of the first cities to implement car travel restrictions – a vehicle demand management strategy steadily gaining popularity in other cities in Latin America and the developing world. Restrictions on car travel is one of many ways to limit car use and ownership in emerging economies. Photo by Steve Calcott.

This is the fifth post of the “Sustainable Urban Transport On The Move” blog series, exclusive to TheCityFix. It presents emerging, trendy, and mainstream solutions leading this transition, and tracks progress being made by cities already adopting measures to enhance accessibility. Preparation of this series was possible thanks to a grant by Shell Corporation. Its contents are the sole responsibility of the authors.

Yesterday, On The Move looked at vehicle demand management policies in developed economies. Today we shift our attention to emerging economies, with a focus on restriction to car use, and pricing for car ownership.

Status of vehicle demand management in emerging economies

Vehicle demand management – policies and strategies that seek to limit vehicle ownership and usage – in emerging economies focuses on restricting car use, and to a lesser extent, on making car ownership more expensive.

Let’s look at some examples of cities in developing countries.

Car travel restriction has received increased attention in Latin America and China, but was initially pioneered in Athens, Greece, where the first-ever restrictions to car use were adopted in 1982. Mexico City furthered existing travel restrictions in 1989 and was soon followed by nine other cities in Latin America. The Mexico City model restricts travel in a designated geographic zone, which is usually a central area of the city, for one or two days during the week based on the last digit of a vehicle’s license plate number. This strategy manages traffic congestion and air pollution from motorized vehicles.

More recently, the Chinese cities of Beijing (2009), Nanchang (2010), Changchun (2010), Lanzhou (2010), Guiyang (2011), Hangzhou (2011), and Chengdu (2011) have deployed car use restriction policies in order to relieve congestion and air pollution from cars.

Car use restriction in developing countries

Table 1. Cities in Latin America and China with vehicle travel restrictions. Table by EMBARQ.

Vehicle quota systems take off in China

Strict policies on vehicle ownership have also been gradually adopted by some cities in China. A vehicle quota system (VQS) caps the number of new vehicle registrations to control the growth in vehicle ownership at a “sustainable” rate through auction or lottery. This policy was first implemented in Singapore in 1990 in the form of quota auctions. Since then, Shanghai (1994), Beijing (2011), Guiyang (2011), and Guangzhou (2012) have adopted vehicle quota systems in an effort to cap the rapid growth of private vehicle ownership. Currently, the implementation of vehicle quota systems is restricted to China and Singapore.
License plate lottery and auction in China and Singapore

Table 2. Cities with vehicle quota restrictions. Table by EMBARQ. Data sources: Singapore Ministry of Transport, and Heshuang Zeng, “Stemming the tide of private autos in Guangzhou.”

Regulatory and economic instruments in emerging economies

The majority of vehicle demand management policies in emerging economies are regulatory instruments, largely because congestion pricing is difficult to implement because people assume they can use roads for free. Additionally, political leaders usually want to show results in a short time, so in many places restricting car use is the result of a mayoral decision. This is the case in several Latin American and Chinese cities.

Nevertheless, pricing approaches have sporadically emerged in developing economies. In China, Shanghai’s vehicle quota has been allocated through auction since 1994, which has allowed Shanghai to successfully restrain its vehicle ownership to half the level of Beijing’s, and created large amounts of revenue for public transportation in the city. Cities like Guangzhou and Beijing have introduced on-street parking management and are interested in implementing multi-objective parking management. Similarly, Santiago de Chile in Latin America has established three Parking Meter Districts (PMD), one of which uses part of its parking revenue to promote public transit.

Vehicle demand management is the path of the future

Moving forward, at least 100 cities around the world are planning vehicle demand management policies. In Europe, about 100 cities have Low Emission Zones (LEZs) planned, areas or roads where polluted vehicles are banned or charged for entering if the vehicle’s emissions are over a set level. In India, the Ministry of Urban Development promoted congestion pricing to Chief Secretaries of State and implementation is under consideration. In China, the recent clean air action plan indicated that Beijing is also seriously considering a combined policy of congestion charging and low emission zones.

Challenges still remain for cities in emerging economies to implement comprehensive vehicle demand management strategies, as their implementation can only be achieved through strong urban institutions and political will to promote sustainable urban transport usually found in more developed cities. However, developing cities are beginning to understand the high cost of free parking and unrestricted private vehicle access – a cost which at the end of the day will be paid with expanded roads and parking spaces, usually at the expense of the taxpayer no matter if he/she owns a private vehicle, or in the form of congestion, pollution, greenhouse gas (GHG) emissions, road traffic fatalities, and declining physical activity as a cost for the society at large. In the face of these challenges, comprehensive vehicle restriction systems will likely be implemented in more and more cities, especially urban areas with large populations, rapid vehicle growth, and limited road space.

Dario Hidalgo, Anjali Mahendra, Akshay Mani, Aileen Carrigan, Benoit Colin, and Kyle Mackie contributed to this blog.

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