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destination sustainability

Canada, Mexico and the United States, the parties to the North American Free Trade Agreement (NAFTA), face two interlocking challenges, one environmental and one economic. From an environmental perspective, the livability and sustainability of...

Canada, Mexico and the United States, the parties to the North American Free Trade Agreement (NAFTA), face two interlocking challenges, one environmental and one economic. From an environmental perspective, the livability and sustainability of our region is under strain from population growth and concentration, from climate change, and from the impact of how we currently live and trade within and among our three countries. From an economic perspective, we face competitive pressure from other global trading blocs. While trade within the NAFTA bloc has grown by a seemingly impressive 42% since 2000 (from $700 billion to $1 trillion annually), trade with countries outside the region has doubled (from $1.5 trillion to $3 trillion).

Freight transportation figures prominently in both of these challenges. Transportation is second only to electricity generation as a source of greenhouse gas (GHG) emissions and freight transportation is the fastest rising component in that category. While emissions from passenger vehicles grew by 33% between 1990 and 2008, freight-related emissions grew by 74%. In the next two decades, that imbalance is predicted to remain, with emissions from private and light-duty vehicles actually dropping by 12%, while freight-related emissions are expected to rise by a further one-fifth.

In the freight field, these two issues-GHG emissions and competitive advantage-are linked by the factors of efficiency and expense. Freight operations that are run inefficiently tend to burn more fossil fuels (the freight sector as a whole is 98% dependent upon petroleum). Burning more fuel creates more GHG emissions-and costs more money. An inefficient system also slows the movement of goods, compromising NAFTA’s trading advantage relative to more innovative foreign competitors.

With those challenges in mind, the Secretariat of the trinational Commission for Environmental Cooperation (CEC) set out in the fall of 2009 to prepare an independent “Article 13” report on the options and implications of reducing freight-related greenhouse gas emissions within the NAFTA bloc. Article 13 is the section of the North American Agreement on Environmental Cooperation (NAAEC) that mandates the CEC Secretariat to study issues of environmental importance and to present its findings to the governments and people of Canada, Mexico, and the United States. (NAAEC is the environmental side agreement to NAFTA, representing the signatories’ commitment to protect and enhance the environment of North America in the realm of continent-wide liberalized trade.)

In preparing its report, the CEC Secretariat established an advisory group comprising industry stakeholders, experts, academics, representatives from civil society groups, from the OECD and from the respective governments. The group then guided a series of public consultations, as well as government consultations with ministries or departments of environment, trade and commerce at the federal, state and provincial levels.

The result is Destination Sustainability: Reducing Greenhouse Gas Emissions from Freight Transportation in North America, and it confirms that the policies and investments for reducing freight-related GHG emissions are, in many cases, the most effective measures for driving improvements to efficiency and economic competitiveness.

The report’s first recommendation urged governments in all three countries and at every level to cooperate more extensively and effectively in the effort to create an integrated North American production and distribution network. A cogent, current example of the potential for future cooperation might be found in the recent initiative by US President Barack Obama and Mexican President Felipe Calderón to resolve a long-standing dispute that has blocked Mexican truckers from operating in the United States. An agreement to resolve this dispute, arising out of the Obama/Calderón negotiations from early March 2011, could clear the road for additional cooperative efforts that will help create a borderless supply chain among the three countries.

Another aspect of the first recommendation called for the parties to embrace the vision of an integrated, intelligent transportation system uniting our three countries. North America, and especially the United States and Canada, have consolidated a competitive economic position, in part by making visionary investments in transportation infrastructure, of which the US Interstate highway system is a good example. But future success will depend equally or more on making the system more intelligent, through the use of sensors, computers and communication technology. Information technology can play a key role in the safety, efficiency and convenience of transportation-for cars, trucks and mass transit. Intelligent transportation systems (ITS) may include on-board, real-time traffic and transit information, new types of road pricing, adaptive traffic signal timing, and better safety warning systems.

While many nations have made significant investments in ITS, the NAFTA bloc currently trails world leaders in this category, potentially giving up an advantage that could solve environmental and economic problems by making existing infrastructure operate to its optimum capacity-and pointing out where improvements will be most cost-effective.

Summary of key recommendations

1. Coordination and Networking. The NAFTA partners should consider forming a ministerial-level North American Transportation Forum that will work in cooperation with an industry, expert and stakeholder group to foster an integrated, intelligent freight transportation system, a more seamless and efficient set of linkages that bring the three countries-functionally if not literally-closer together.

2. Carbon Pricing and System Efficiency Strategies. Canada, Mexico and the United States should consider putting a price on carbon to give everyone a clear signal that they should be investing in efficiency and in low-carbon fuel alternatives.

3. Investments to Improve the Efficiency of the Freight Transportation System. The three countries should re-invest in the transportation system itself – in road, rail and waterway infrastructure that is, in many places, congested and deteriorating. The countries should provide meaningful incentives for advanced fuel-saving technologies and the adoption of intelligent transportation systems.

4. Supply Chain Management. Transportation agencies, and businesses operating nationally and across international borders, could reduce costs and GHG emissions by managing the transportation system more efficiently. For example, emissions go down (and profits up) if fewer long-haul trucks return empty or travel over routes that are better served by more carbon-efficient rail.

5. Training Eco-drivers. Each jurisdiction can improve the training and equipping of drivers to optimize their environmental and economic performance by driving in ways that conserve energy.

6. Gathering and Sharing Data. Transportation, environmental and statistical agencies in all three countries should work through the North American Transportation Statistics Interchange (NATS-Interchange) to enhance the quality and comparability of freight data, including the measurement of environmental impacts, to better manage freight transportation as a continent-wide system.

For more information about Destination Sustainability: Reducing Greenhouse Gas Emissions from Freight Transportation in North America and the CEC’s initiative on sustainable freight transportation in North America, please visit: Printed copies of the report are available on request to

Evan Lloyd is the Executive Director of the Commission for Environmental Cooperation (CEC) Secretariat. The Secretariat of the CEC-a trinational commission established as part of the North American Free Trade Agreement (NAFTA)-examines environmental matters arising as part of continental trade and makes occasional recommendations to the governments of Canada, Mexico and the United States through the CEC Council of cabinet-level (or equivalent) environmental authorities.

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