The transport sector is a major and rapidly growing source of greenhouse gas emissions. Carbon dioxide emissions from vehicles and transport equipment are rising by a significant 2.5% per year. Transportation also contributes to local and regional pollution problems through its emissions of carbon monoxide, lead, sulfur oxides (SO_x) and nitrogen oxides (NO_x). This sector’s heavy reliance on liquid fossil fuels makes controlling greenhouse gas emissions particularly difficult.

Automobiles are the transport sector's largest consumer of petroleum and its largest source of carbon dioxide emissions. The developed world has the highest per-capita ownership of private cars today (484 cars per 1,000 people in North America in 1996, compared to 32 in South America), although developing countries are expected to account for most of the future growth in automobile use.

New technologies can increase the efficiency of automobiles and reduce emissions per kilometer traveled. New materials and designs can reduce a vehicle's mass and increase the efficiency at which it converts energy, thus lowering the amount of energy required to move it. With improved transmission designs, engines can operate closer to their optimal speed and load conditions. Technological improvements in combustion-engine technology and in petroleum formulations have already started to reduce per-vehicle emissions of both greenhouse gases and conventional pollutants. Hybrid gasoline-electric vehicles now available on the market are twice as energy efficient as regular vehicles of comparable size.

Switching to less carbon-intensive fuels can also reduce carbon dioxide emissions. The feasibility of operating vehicles on fuels other than gasoline has been demonstrated in many countries. Biodiesel, supported by tax exemptions, is gaining market share in Europe. Fuel cell-powered vehicles are developing rapidly and are to enter the market in 2003. Biofuels produced from wood, energy crops, and waste also promise to play any increasingly important role in the transport sector. These fuels and technologies can offer long-term global climate benefits in tandem with immediate improvements in local air quality.

Renewable energy technologies are becoming more and more competitive. Renewable energy could one day offer cost-effective alternatives to petroleum-based fuels. Electricity derived from hydroelectric, solar photovoltaics, wind systems, and hydrogen fuel cells can power the movement of people and goods with almost zero greenhouse gas emissions. The combustion of liquid fuels derived from sustainably grown biomass does emit carbon, but an equal amount of carbon is recaptured by the vegetation grown to make new biomass. The use of renewable fuels in the transport sector can help to reduce new CO₂ emissions while delivering the degree of personal mobility that people desire.

Emissions can be further cut through changes in maintenance and operating practices. Many vehicles are not adequately maintained due to high costs or to the limited local availability of spare parts. In some areas, maintenance may simply be a low priority for drivers and vehicle owners. Studies have suggested that an average vehicle's fuel consumption can be reduced by as much as 2­10% just through regular engine tune-ups.

Policies to reduce road traffic congestion can save both emissions and costs. The energy intensity of transport and the amount of congestion on the roads are strongly influenced by the average occupancy rate for passenger vehicles. Computerized routing systems for trucks can save money and fuel by optimizing payloads and minimizing time spent in traffic. Similarly, measures to improve general traffic control and restrict the use of motor vehicles can reduce energy use significantly.

Urban planners can encourage low-emissions transport. Convincing people to switch from automobiles to buses or trains can dramatically reduce primary energy use per passenger-seat-kilometer. A vital part of encouraging this transition is providing safe and efficient public transport systems. Cities can also promote walking, bicycling, and car pooling by limiting automobile access to certain roads, increasing the fees for public parking, and converting existing roads into bicycle lanes, bus-access roads, or "High Occupancy Vehicle" (HOV) lanes during peak hours. The introduction of computerized traffic-light control systems, more informative signs, and improved network designs, especially in urban areas with a high density of vehicles during peak travel hours, can also boost efficiency. In the short term, the greatest potential that urban planning has for affecting transport is in rapidly developing cities where cars are still in limited use.

Policies to reduce air traffic congestion can cut emissions while improving safety. Present flight patterns seek to reduce fuel consumption and other in-flight costs. Nevertheless, crowding at airports leads to long holding times at many destinations and contributes to higher-than-necessary fuel emissions. Advances in booking systems, policies to increase seat occupancy rates, and efforts to discourage simultaneous, partly-filled flights on the same route could further reduce congestion, minimize landing delays, and decrease emissions. Additional aviation fuel taxes could also play a role in promoting energy efficiency.

Policies to accelerate the rate of capital stock turnover in automobile and aircraft fleets may be the quickest way to reduce the short-term rate of emissions growth. This is especially true for developed countries, where large fleets with many older vehicles are already in place. Rewards can be offered for retiring older vehicles and airplanes that do not meet current national emissions standards, or small environmental "user fees" can be imposed, with the fees proportional to the vehicle's energy consumption. Fuel-efficiency standards for autos and aircraft are vital to reducing the energy intensity of transport over the longer term, but they affect only the newest vehicles.

The appropriate mix of policies will vary from city to city and country to country. In addition, measures to reduce emissions in the transport sector can take years or even decades to show their full results. But if carried out with care, climate-friendly transport policies can play a major role in promoting economic development while minimizing the local costs of traffic congestion, road accidents, and air pollution.