Smart meters revolutionize transport in Europe

Smart metering is as valid a cleantech strategy for driving as it is for electricity.

It is also a considerably higher impact strategy in transport than in electricity. ‘Pay for what you use’ is common sense for electricity, where meters are over a century old. In driving, road-use meters are an emerging technology and ‘pay for what you use’ is still a novel and controversial concept—meaning that massive efficiency gains are still possible from metering road transport.

No plan to reduce global greenhouse gas emissions can succeed without targeting road transport—the fastest-growing category of emissions in many countries, and the source of half of all emissions from most cities. Conventional wisdom is that there is a two-part solution—efficient vehicles and alternate fuels—as embodied in President Obama’s May 19 announcement on federal fuel efficiency standards, and the enthusiastic VC investor support given to firms like Zenn Motor, Think and Better Place (see Project Better Place pulls in Project Cash and Think says U.S. electric car market is overtaking Europe).

A third major cleantech transport theme is emerging in Europe: Efficiency in the use of vehicles, as embodied in, for instance: (1) the forthcoming ‘Eco-royalty’ on trucks announced in 2009 by France’s Ministry of Sustainable Development, (2) in Milan’s 2008 ‘Ecopass’ for cars, or (3) in the ‘congestion charging’ system installed in Stockholm in 2006 as a condition of the city’s Green Party joining the government.

All three systems are designed to have drivers change their behavior to benefit the environment (see Europe may need more cuts in transport emissions). In Milan and Stockholm, drivers pay to enter the city center, with Milan’s fees depending on the emissions class of the car, and Stockholm’s fees varying depending on the time of day. In France, all trucks will be asked to pay per kilometer to drive on French highways, with the fee to be calculated with an in-truck, GPS-based, smart meter.

This policy has been proven to be dramatically, and immediately, effective. In Milan, CO₂ emissions fell immediately citywide by 14 percent, while Stockholm’s citywide greenhouse gas emissions fell 10 percent to 14 percent when they started asking drivers to pay to enter the city.

That’s citywide emissions!! Falling 14 percent in one day!! How many years will it be until ALL existing U.S. cleantech activities have the same impact in any U.S. city?

The concept is not new to the United States. The U.S. Department of Transport’s landmark 1998 study on ‘Transportation and Global Climate Change’ highlighted the importance of pricing to transport greenhouse gas reduction a decade ago. That was years before the first European systems were installed, and in parallel with the world’s first all-electronic congestion charging system—in Singapore. In this past decade, Europe and Singapore have acted, while the U.S. has not.

The charging of cars or trucks to use roads is often controversial. Electricity provides a useful parallel. The cleantech sector has rightly identified smart metering of electricity as a major source of savings in urban centers. We understand that charging more for electricity at peak times will result in fewer emissions and greater efficiency. We don’t even question the fact that charging for electricity is good for the environment—and that giving away electricity for free (funded by the taxpayer) would result in waste and regular power blackouts.

Roads are a utility grid, just like electricity. Free-at-point-of-use roads result in waste, and regular transport ‘blackouts,’ i.e., traffic jams. Even worse, an unfortunate ‘congestion paradox’ means that jammed roads carry fewer cars per hour than freely-flowing roads, while causing more emissions per vehicle-mile traveled.

Just when we need our roads the most, they carry the least. And stop-and-go driving on clogged roads can cause even hybrids to burn more fuel than an SUV cruising at optimum speed.

Clearly, eliminating traffic has an immense environmental, as well as economic and driver benefit. There was a detailed, 600-page RAND Corporation study on traffic in Los Angeles in late 2008 that examined how to reduce traffic in that city. After evaluating every alternative they could find—including strategies such as intelligent traffic systems, embodied by VC-backed firms such as Inrix—they concluded that the only way to have a lasting impact is pricing.

This seems commonsensical: Imagine trying to manage electricity consumption in a world where electricity was given away free.

It is also commonsensical to say that if drivers pay for roads drivers will drive less and share cars more, resulting in lower emissions (and less traffic).

That returns us to our starting point: Smart metering in transport. Reducing greenhouse gas emissions from transport will require the same strategy as we use to manage electricity use. It will require pricing. And pricing requires metering.

What about the technology to use for smart metering? Why did the French ‘eco-tax’ specify GPS when Stockholm and Milan did not? Why has GPS not been used widely before? What about the political hurdles? Can privacy be protected? What are the trends in the U.S., where smart metering has powerful supporters in Congress for reasons that have nothing to do with emissions reductions?

Those are subjects for another day. We first need to acknowledge that smart metering of transport is a cleantech strategy and sector in its own right. That ‘pay for what you use’ does impact the environment. And that a strategy that has been shown, in multiple cities, to reduce city-wide emissions by 14 percent literally overnight is worth taking notice of … and maybe even investing in.

Kamal Hassan is the CEO of Skymeter, a global startup in the emerging cleantech sector of smart metering for transport. Find out more about the company here, or contact him at khassan@skymetercorp.com.

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