Albania plans significant investments in the transport sector to mitigate climate change
Analysis by Dr Lorenc Gordani
Head of the Department of Professional Masters
Tirana Business University (TBU)
Climate change represents an urgent and potentially irreversible threat to human societies, especially for the Mediterranean area. Thus, the development towards a low carbon economy is key for the achievement of global mitigation objectives and for allowing an adaptation response of future generation at a reasonable environmental, economic and social costs.
With the signature of the Paris Agreement by the Government (New York, 22 April 2016), Albania has entered in the new era of the climate international policy process, where all parties collectively aim to hold the increase of global temperature to 2°C above the pre industrial level. Now the country is working for its National Mitigation Strategy and Action Plan (NMS&AP), in order to respond to the need of alignment to EU requirements, as Albania currently holds since June 2014, the status of official candidate country for the accession to the EU.
The NMS&AP, currently under preparation by the Ministry of Environment, focuses on four reporting sectors of the greenhouse gas inventory of Albania with a special impact on the transport one. The energy sector shows an increasing share of emissions from 2000 (43.57%) to 2009 (56.92%) among which the energy sub-sectors, the transport contributes the most, with about 45% of share.
The transport sector plays an important role in the consumption of energy sources developed with fast growth rate after ’60, with an exponential increase of road transport after the years ‘90. Today the roads and motorways comprise the predominant mode of land transportation and provide essential links for freight and passenger mobility. Despite some recent investments, the quality of road transport remains low and there is a considerable regional variation in term of accessibility to market and to basic services.
Transport trends is growing steadily while public transport lost more than the 50% of the passengers during the last two decades. The increase in the number of road vehicles, with about 4.5 million of vehicle for km/y, was accompanied by an evident increase of fuel consumption, mainly diesel and gasoline.
The Ministry of Transport and Infrastructure is recently working on two main strategies and plans: the Albanian Sustainable Transport Plan and Transport Sector Strategy. The two documents, still in the process of elaboration, aiming the defining a pathway for the streamlining of the transport sector with the EU Acquis and standards, as well implementing fundamental strategic directions provided by the Energy strategies and plans for the mobility network.
Since the Albanian Council of Ministers and the relevant ministries have already prepared or are currently working on Strategies and Plans of actions on climate change for the main sectors in Albania, the NMS&AP represent an overall inter-sectorial strategy and plan that foreseen the most of measures focus in the energy sector (77) and in the transport sector (71), followed by LUCF (53) and Agriculture (17) with 5 measures that are cross sectorial.
The Albanian Government is committed to introduce energy efficiency policies and practices as part of its National Energy Strategy, also aiming at promoting harmonization with EU requirements, as part of the wider pre-accession process. Within this framework, a Sustainable Transport Plan (STP) is under preparation by the Ministry of Transport and Infrastructure (MTI) to help meeting the targets of reducing energy consumption and improve overall sustainability in the transport sector.
Sustainable transport policies shall be focused on reducing the need for travel and shifting travel to the most social, economic, and environmentally efficient mode, as well as putting technological improvement of vehicles and fuels in the spotlight. This means that transport policy should reduce the need to travel and shorten trip lengths, promote a shift to sustainable modes, and improve the sustainability of all modes, using technologies that are more energy efficient. A detailed program and a definition of a potential financial budget is developed for most of the proposed measures.
The overall objective of the Transport Sector Strategy and Action Plan (TSSAP) 2016-2020 is to further develop Albania’s national transport system, and to significantly improve its sustainability, interconnectivity, interoperability and integration with the international and European wider transport system and region. It provides for the development of an efficient, sustainable and environmentally friendly transport system, able to support the key objectives of economic and social development of Albania and the country’s future integration to the European Union.
Strategic priorities for road transport are about legal and governance conditions, completion and modernization of Albania primary and secondary network, also in order to strengthen regional cooperation through road connections. The general approach is to reach a road transport market in line with EU standards. Strategic priorities for rail transport are related to set up an open market for investors and increase visibility of SEETO (South-east Europe Transport Observatory) area.
Strategic priorities for maritime transport aim at enhancing the regulatory system in accordance with EU/IMO (International Maritime Organization) regulations, to sustain growth for maritime and port markets. Concerning air transport, the development of a new airport infrastructure in the south of the country should be instrumental to increase tourism; a more competitive market with liberalized air service, implementation and unification of international air standards as well as a reduction in travel fees for passengers are the priorities for the period of validity.
The documents spells out each of the above strategies in specific, detailed policies, setting milestones, indicators and targets. The thirty-nine Policies (Priority Actions) identified for the five-year period are deeply interlinked, striking a balance between soft measures and investments, and have been selected in order to define a solid National Transport Strategy and Action Plan.
The total costs needed to implement the National Mitigation Action Plan (NMAP) up to 2020 are assessed, as well as the financial resources allocated and/or committed so far from state budget, donors and other sources. The total cost for implementing the NMAP is estimated to be approximately 418.4 billion Albanian Leks (ALL), or approximately EUR 3 billion up to 2020.
The figure shows the total needed expenditures in % according to the sectors. Most of the funds are needed for the Transport Sector (with 81.25% of the total expenditure). Energy and Agriculture requires respectively 9.05% and 8.29% of the total expenditures. The transport sector is the sector with the highest share of funding from donors, while the energy sector is funded mainly from other sources such as RES’s investors, Local self-Government Units (LGUs), private contributions.
In the total funds needed to implement the measures related National Mitigation Action Plan, the state budget contribution is about 11.75%, the budget from donors covers 13.54% and 14.05% is from other sources. The funding gap is 60.66% of the total expenditures. This gap is planned to be covered by donor funds as well as by the state budget. The funding gap to be covered belongs mainly to the transport sector, in fact the source of funding for some measures in the transport sector is not identified. Due to this reason the costs are considered as a gap seeking donor funding.
The successful implementation of the NMAP is likely to face challenges due to specific risks, which should be taken into consideration so as not to create real difficulties in the process of implementation. The main risks that may affect the successful implementation of the NMS&AP are related to the two tiers of government: Central Government (Ministries responsible for the implementation of the Action Plan) and Local Self-Government Units.
Risks at the central government level are mainly related to the commitment of all relevant institutions involved in this NMS&AP in supporting the NMAP implementation with the necessary funds to enable a full execution of the planned activities. Local government related risks are mostly linked to the Local Government Units’ commitment to implement measures that are part of the NMAP and their commitment to contribute with their revenues to funding the planned activities and/or services.
Disclaimer: All opinions expressed pertain to the author. While all efforts are made to ensure this publication’s accuracy, it is not intended to provide legal advice as individual situations may differ and should be discussed with an expert. For any specific technical or legal advice on the information provided and its related topics, you can contact us through “email@example.com”.
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