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Transportation is a major sticking point in carbon reduction efforts. The sector accounts for around 13 percent of total global greenhouse gas emissions, according to Greenpeace, with two-thirds of transport emissions coming from the world’s roads.

In developed economies with relatively large shares of low carbon power, the transport problem becomes even more acute. Earlier this year the U.K. government confirmed transport is responsible for around 26 percent of the U.K.’s greenhouse gases, giving it the largest share, ahead of the energy sector’s 25 percent.

So making road travel greener and more efficient is an increasingly vital challenge to address in the battle to avert dangerous climate change. The good news, however, is that the auto industry is working on many technologies that could help curb transport emissions, with hopes largely pinned on electric and autonomous electric vehicles (AEVs).

new report (PDF) last week from consultancy PwC suggests AEVs could help close the current road transport emissions gap between climate ambition and on-the-ground action.

The PwC analysis suggests historically global decarbonization rates have averaged 2.7 percent a year, but predicts a rate of 6.3 percent a year will be needed to keep global warming to “well below” 2 degrees Celsius, as set out in the Paris Agreement.

“Our analysis shows that under some scenarios AEVs could drive a swift and substantial shift towards achieving the Paris Agreement’s 2 degrees objective,” confirmed Ping Low, assistant director of climate change at PwC.

PwC modeled the impact of renewables-powered AEVs on emissions across a number of demand scenarios set out by a range of analysts, including BP, Bloomberg New Energy Finance (BNEF) and Wood Mackenzie. The projections varied significantly, from plotting a future course for AEVs according to current industry trends to scenarios based on meeting climate policy goals. However, all scenarios predicted AEVs will drive a reduction in global oil demand, and all suggested AEVs could have a “noticeable impact” upon global carbon intensity. One — the RethinkX scenario, which predicts that by 2030, 95 percent of U.S. passenger miles will be served by on-demand AEVs — reveals such technology could bridge the global emissions gap by one-third.

But Low warned AEV development is so nascent, and projections of their use varies so wildly, that any potential climate benefit is far from guaranteed. For example, not all autonomous cars will be electric, while projections differ over whether the number of petroleum cars will rise as AEV numbers grow.

The reputational impacts and technical viability of AEVs are also an unknown — a fact vividly underscored recently by the death of a woman in Arizona following a collision with a self-driving car.

“The range of uncertainties and possibilities remain wide and they come with potential risks of disruption to business and the economy,” Low admitted. “There are likely to be winners and losers as AEVs are increasingly deployed. It’s vital that businesses start preparing by understanding how AEV deployment can affect their operations.”

Despite the uncertainty, major car giants continue to invest heavily in autonomous and electric vehicle (EV) development. For example, at its recent annual conference, German car giant BMW promised to plow $8.62 billion into electric and autonomous vehicle research in 2018, up from $7.51 billion in 2017.

That kind of ramp-up in spending is necessary, both to accelerate commercial and regulatory progress for autonomous technology and force the cost of EV batteries down. New data from Bloomberg New Energy Finance (BNEF) also released last week suggests battery powered cars could be cheaper than petroleum alternatives as soon as 2025, so long as battery pack prices continue to fall.

The challenge, however, will be to maintain the downward price trajectory as demand for the metals to go into the units rise, BNEF noted. That means more innovation in battery technology and manufacture will be essential. “Electric vehicle sales will continue to ramp up in the coming years, but battery prices still need to decline further for real mass market adoption,” BNEF transport analyst Colin McKerracher told Bloomberg. “If battery material costs keep rising sharply, this could push back the crossover point.”

Moving from a world where large numbers of people own private, petroleum or diesel-fueled passenger cars to get around to one where fleets of AEVs can be summoned at a moment’s notice fundamentally will change the lives of millions of people, and significantly could shift the world’s climate outlook. But although the potential for a green mobility shift is there, its scale and reach depend on a whole host of interwoven factors, from public transport use to business investment levels and policy goals. Smart businesses nevertheless should prepare for the coming disruption.

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