Transportation Research Part D 10 (2005) 111

www.elsevier.com/locate/trd

Energy and environmental implications of NOx emission

reduction from the transport sector of Beijing:
a least-cost planning analysis
Ram M. Shrestha
a

a,*

, Gabrial Anandarajah a, Sushil Adhikari a,

Kejun Jiang b, Zhu Songli b

Energy Program, Asian Institute of Technology, P.O. Box 4, Klong Luang, Pathumthani 12120, Thailand
b
Energy Research Institute, B-1407, Jia 11, Muxudi Beili, Xicheng District, Beijing 100038, China

Abstract
This paper determines cost eective passenger transport technology and energy options at selected targets for nitrogen oxides emission reduction from the transport sector in Beijing, China during 20052020
using a long-term least cost vehicular mix model. It also examines the implications of the nitrogen oxides
emission reduction targets (NERTs) for greenhouse gas and other local pollutant emissions. The study is
limited to the passenger transportation in the city and does not consider freight transportation options.
A key nding of this study is that the liqueed petroleum gas buses would replace diesel buses in Beijing
at NERT of 10% while the shares of other transport options would remain unaected. At higher NERT
of 2050%, hybrid cars and electric trolley buses would be cost eective. It is also found that total cost
would increase only marginally (by less than 0.1%) up to the emission reduction target of 10% whereas
it would increase by as high as 31.7% when the target is increased to 50%. Total energy requirement would
not change much at lower values of NERT (e.g., 10%). However, it would decrease as the emission reduction target is set at 20% or higher.
2004 Elsevier Ltd. All rights reserved.
Keywords: Emissions targets; Environmental cost-benets; NOx abatement

Corresponding author.
E-mail address: ram@ait.ac.th (R.M. Shrestha).

1361-9209/$ - see front matter 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.trd.2004.08.007

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

1. Introduction
Transport is a major source of air pollutants emission in cities of developing countries (Energy
Sector Management Assistance Programme, 1999). At the end of 2001, the total vehicle stock in
Beijing was about 1.7 million; more than four times than that of 1991 and with an annual growth
rate for private cars of 38.5% over the period (Zhu and Jiang, 2003). Like cities of most developing countries, the rapid growth of passenger transport vehicles has been a major cause of air pollution in Beijing. Ambient nitrogen dioxide concentration in the city has substantially exceeded
World Health Organization guidelines (Economic and Social Commission for Asian and the
Pacic and Asian Development Bank, 2000). Road transportation is a major source of nitrogen
oxides (NOx) emissions in the city (Carslaw and Beevers, 2002); it has been estimated that
the transport sector was responsible for about 40% of NOx emission in Beijing in 2000 (Jraiw,
2002).
Seika et al. (1998) estimated changes in the concentration of NOx and other pollutants from
vehicle emission under dierent trac control strategies, e.g., changes in vehicle technology
(i.e., replacing non-catalyst- by catalyst-cars). According to Newmark (2001), higher emission
standard for buses, and switching to the alternative fuel (i.e., liqueed petroleum gas) for buses,
taxis and trucks are appropriate measures for mitigating NOx emission in the city. The cost of
reducing NOx, however, was not analyzed in their studies.
Lachance and Mierzejewski (1998) studied the cost eectiveness of vehicle inspection and maintenance (I/M) program for reducing air pollution including NOx emissions. The estimated annual
cost of reducing volatile organic compounds (VOC) and NOx varied from $2210/ton to $6466/ton.
Shao and Zhang (2001) and Shao et al. (2001) suggested dierent measurese.g., strengthen vehicle emission standards, gasoline quality improvement, and I/M programto control NOx emissions. According to Shao et al., NOx vehicle emission control is likely to be expensive with the
per ton cost of NOx reduction at about $818.
The paper focuses on determining cost eective passenger transport technology and energy options for selected NOx emission targets reductions for Beijing during 20052020 using a long-term
vehicular mix model. It also examines the implications of imposing similar policies for other local
pollutants and carbon dioxide emission in Beijing. It estimates the average incremental cost of
NOx abatement at dierent nitrogen oxides emission reduction targets (NERTs).

2. Methodology
A least-cost vehicular mix model is used to determine the options available to meet the projected passenger kilometer requirement for transport services (Shrestha and Anandarajah,
2002). The model is a supply-side planning framework. The modeling framework for analyzing
the least-cost vehicular mix model with NOx emission targets is shown in Fig. 1.
The objective of the model is to determine the type and stock of vehicles as well as their level of
operation in order to meet the total projected passenger transport service requirement during the
planning horizon 20052020 at minimum total cost. Total cost includes, the costs of the new vehicle stocks that should be added during the planning horizon as well as the costs of fuel, operation
and maintenance (O&M) of the existing and new vehicles. The objective function (i.e., total cost

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

Existing and candidate
transport options

Related cost of existing and

candidate transport options

Transport demand
data

Vehicle availability

Least cost vehicular mix model

Annual emission NOx
targets

Vehicular mix

Total cost

Vehicle-km by
mode

Emission factors

Fuel economy
NOx, CO, PM10, SO2 and CO2
emissions

Fuel mix

Fig. 1. Framework for analyzing the least-cost vehicular mix.

function) comprises capital cost minus salvage value of the new vehicles, and operation and maintenance cost including fuel cost of existing and new vehicles. It is expressed as:
Minimize

I X
J X
V
X
i1

j1

v1

X ijv C ijv  S ijv

I X
J
t
T
X
X
X
i1

V ijvt  Oijvt

j1 vv t1

where, Xijv is the number of vehicles type i, fuel type j to be commissioned in year v; Cijv is the
discounted capital cost of vehicle type i, fuel type j, and vintage v; Sijv is the discounted salvage
value of vehicle type i, fuel type j, and vintage v; Vijvt is the kilometers traveled by vehicle type
i, fuel type j, vintage v, and year t; and Oijvt is the operating cost including fuel cost of vehicle type
i, fuel type j, vintage v, and year t.
The minimization of the total cost is subject to the following constraints:
Travel requirement constraints: Total travel requirement in the passenger kilometers in year t
must be greater or equal to the forecast passenger kilometers (p-km) requirement in the year t, i.e.,
!
I X
J
t
X
X
V ijvt  OCijt P TDt 8t
2
i1

j1 vv

where OCijt is the average occupancy rate of vehicle type i and fuel type j in year t; and TDt is the
total projected travel requirement in p-km in year t.
Due to the limitation of infrastructure and narrow roads, some of the technology options (e.g.,
mass rapid transit or bus) cannot be deployed everywhere and other technology options (e.g., cars
and two-wheelers) could become essential in the city. Therefore, the maximum projected travel
requirement has been set for certain types of motor vehicles, i.e.,
!
J
t
X
X
V ijvt  OCijt 6 TDmax
8i;t
3
it
j1 vv

is the maximum projected travel requirement using vehicle type i in year t.

where TDmax
it

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

Similarly, the minimum travel requirement has been dened for selected types of transportation, i.e.,
!
J
t
X
X
V ijvt  OCijt P TDmin
8i;t
4
it
j1 vv

is the minimum travel requirement using vehicle type i in year t.

where TDmin
it
Due to lack of information for the estimation of travel demand functions for dierent types of
transport, the study has embraced exogenously determined forecasts for travel requirements in future years.
Capacity constraints: The total kilometers traveled by any type of vehicle cannot exceed its
capacity, which depends on the vehicle utilization rate (dened as the average annual vehicle
kilometer traveled). That is,
!
!
t
t
t
X
X
X
V ijvt 6
X ijv 
RVijt  vavg
5
ijt
vv

vv

t1

where, RVijt is the total retired number of vehicles type i and fuel type j in year t; and vavg
ijt is the
average kilometers traveled by vehicle type i and fuel type j in year t.
The total number of retired vehicles is:
t
X

RVijt

tL
Xijv

X ijv

vv

t1

where, Lijv is the life period of vehicle type i, fuel type j, vintage v.
Then, Eq. (5) can be written as:
!
!
tL
t
t
X
X
Xijv
V ijvt 6
X ijv 
X ijv  vavg
8i;j
ijt
vv

vv

vv

Emission constraint: The total emission of a pollutant by all types of the vehicles in a year cannot exceed the target emission level in the year i.e.,
I X
J
t
X
X
i1

V ijvt  EFpijt 6 Ept

8t

j1 vv

where, EFpijt is the emission factor of pollutant p of vehicle type i using fuel type j in year t and Ept
is the target level of emission of pollutant p in year t from all vehicles.

3. Data and assumptions

Data on vehicle occupancy rate, specic fuel consumption, vehicle utilizations, emission factors,
cost of vehicles as well as their operation and maintenance costs are taken from Energy Research
Institute (2000, 2001). They are assumed to be the same throughout the planning horizon of 2005

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

2020. Emission factors for electric trolley buses, mass rapid transit (MRT) and electric cars are
taken as zero for all local pollutants as electricity is not produced inside the city.

4. Scenario description
A base case and ve NERT scenarios are considered in this study. There is no restriction on
emission level in the base case. In the base case, total projected travel requirement (i.e., total pkm) considered during the planning horizon is the same as that in Energy Research Institute
(2001). Fourteen candidate technologies are considered covering ve modes of passenger transport (i.e., bus, MRT, private car, commercial car and two wheelers); they are: gasoline, diesel,
compressed natural gas (CNG), liqueed petroleum gas (LPG), and electric trolley buses;
MRT; gasoline, diesel, hybrid, LPG, and electric-private cars; gasoline- and LPG commercial
cars; and two wheelers. Due to limitations of infrastructure and narrow roads, buses cannot be
operated in all places, indicating that some use of cars and two wheelers cannot be avoided. Furthermore, it would not be realistic to have an extreme type of urban vehicle mix that allows no
personal vehicles like cars or motorcycles. Therefore, certain minimum stocks are set for private
cars, taxis, and two wheelers. According to a study of 45 international cities by Kenworthy et al.
(1999), car ownership per thousand people was found to be lowest (43 passenger cars per thousand people) in Hong Kong during 19901991. This minimum passenger car ownership gure
(i.e., 43 passenger cars per thousand people) is used as the minimum private car requirement in
Beijing. Similarly, ownership of taxis and motorcycles per thousand people were also found to
be the lowest in Hong Kong (i.e., three taxis and four motorcycles per thousand people) among
the cities studied by Kenworthy et al. These gures have been used as the minimum for taxis
and motorcycles in Beijing. A maximum limit on the number of electric trolley buses is set at
3863 million passenger-kms based on the infrastructure considerations (Energy Research Institute,
2001).
In the NERT scenarios, the NOx emission reduction target is set at ve dierent values; 10%,
20%, 30%, 40% and 50% of the NOx emission in the base case. All other factors remain as in the in
the base case.

5. Results
5.1. Vehicular mix and passenger-kilometer mix implications
Table 1 shows the composition of vehicular stocks in the base case and NOx emission reduction
cases. As can be seen, private and commercial cars together would account for about 89% of total
vehicle stock in the city during the planning horizon while the share of buses would be around 3%.
Gasoline cars would have the predominant share (around 53%) in the total vehicle stock in 2010 in
the base case but would be completely replaced by LPG cars by 2015. The share of buses would be
around 3% during the planning period. Buses using gasoline, diesel, CNG and LPG, as well as
electricity trolley buses, would be cost eective until 2014 in the base case while there would be
a shift to diesel buses thereafter.

Modes

Fuel

Actual share in 2000a Base case

NOx emission reduction targets

10%

30%

50%

2010

2015

2020

2010

2015

2020

2010

2015

2020

2010

2015

2020

Bus

Gasoline
Diesel
LPG
CNG
Electricity

0.20
0.16
0.26
0.12
0.04

0.06
1.71
0.36
0.17
0.01

0.00
2.73
0.00
0.00
0.00

0.00
3.05
0.00
0.00
0.00

0.06
1.03
1.03
0.17
0.01

0.00
1.95
0.79
0.00
0.00

0.00
2.22
0.83
0.00
0.00

0.06
0.30
1.63
0.17
0.16

0.00
0.96
1.63
0.00
0.14

0.00
1.12
1.80
0.00
0.13

0.06
0.07
1.85
0.17
0.16

0.00
0.40
2.20
0.00
0.14

0.00
0.44
2.48
0.00
0.13

Subway (MRT)

Electricity

0.05

0.15

0.21

0.29

0.15

0.21

0.29

0.15

0.21

0.29

0.15

0.21

0.29

Private car

Gasoline
64.33
LPG
0.0
Electricity 0.0
Hybrid
0.0

Commercial car Gasoline

LPG
Motorcycle

Gasoline

Total (million vehicles)

a

53.44 0.00 0.00 53.44 0.00 0.00 53.44 0.00 0.00 2.98 0.00 0.00
30.44 83.47 83.12 30.44 83.47 83.12 1.61 55.76 56.45 0.00 5.73 8.27
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 6.24 5.99 5.77
0.00 0.00 0.00 0.00 0.00 0.00 28.83 27.70 26.67 74.66 71.74 69.08

5.25
0.95

5.85

5.82

5.80

5.85

5.82

5.80

5.85

5.82

5.80

5.85

5.82

5.80

28.64

7.80

7.76

7.74

7.80

7.76

7.74

7.80

7.76

7.74

7.80

7.76

7.74

1.05

0.76

0.79

0.82

0.76

0.79

0.82

0.76

0.79

0.82

0.76

0.79

0.82

Source: Energy Research Institute (2001).

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

Table 1
Shares of dierent types of vehicles in total vehicle stock in the base and selected NOx reduction cases, %

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

It is found that the modal composition would remain almost unaected even at NOx reduction
target of 50% but that a relatively low NOx reduction target of 10% could be achieved cost eectively through a shift from diesel buses to LPG buses. If the NOx target were increased to 20%,
hybrid cars would partly replace LPG cars while LPG buses and electric trolley buses would replace some of the diesel buses. Raising NOx reduction targets to 40% would be met similarly
through greater shifts to hybrid cars as well as LPG and electric trolley buses. If the NOx reduction target is increased further to 50%, electric cars could become cost eective and as a result, the
shares of LPG and hybrid cars would decline.
5.2. Energy implications: fuel mix and energy intensity
Table 2 presents the energy mix under the base and selected NERT cases during selected years.
In the base case, the share of gasoline would fall signicantly after 2014 while that of diesel, LPG
and electricity would increase. LPG would have the highest share on total energy requirements in
2010; its share would increase from 40.8% in 2010 to 62.3% in 2020 mainly due to the high share
of LPG cars. With the restriction on NOx emission, LPG and electricity requirements would increase while the use of diesel, CNG and gasoline would decrease. At 50% NERT, the share of the
electricity in the energy requirement of the sector would be 11% in 2020. Total energy requirement
(TER) in 2020 would be 54.5 million GJ in the base case. TER would not change much at lower
values of NERT (e.g., 10%). It would, however, decrease if NERT were set at 20% or higher.
When NERT is set at 50%, TER would be reduced by 21% mainly due to the use of energy ecient vehicles, i.e., hybrid and electric cars and electric trolley buses.
The overall energy intensity (energy requirement per passenger-kilometer) would decrease from
0.53 MJ/p-km in 2010 to 0.44 MJ/p-km in 2020 under the base case. This is mainly due to the shift
from gasoline to LPG cars. The overall energy intensity declines at higher values of NERT20%
and aboveand it would be less than 0.4 MJ/p-km at a 50% NOx reduction target. This decline
can be attributed to the use of energy ecient hybrid cars as well as LPG and electric buses.
The overall energy intensity of passenger transport services in Beijing is much lower than that
Table 2
Fuel mix under base- and NERT cases in selected years, %
Fuel

Actual
Base case
share
in 1998a
2010 2015

Gasoline
92.6
Diesel
6.5
LPG
0.0
CNG
0.0
Electricity
0.8
Total energy
50.96
(million GJ)
Energy intensity, 0.96
MJ/p-km
a

34.5
19.3
40.8
2.3
3.1
46.7
0.54

Source: Zhu and Jiang (2003).

0.7
29.8
65.5
0.0
4.0
50.1
0.48

NOx emission reduction targets

10%

30%

50%

2020

2010

2015

2020

2010

2015

2020

2010

2015

2020

0.7
31.8
62.3
0.0
5.2
54.5

34.6
11.7
48.3
2.3
3.1
46.6

0.7
21.3
74.0
0.0
4.0
50.0

0.7
23.2
70.9
0.0
5.2
54.4

46.8
3.7
41.8
2.5
5.1
42.4

9.0
11.5
73.6
0.0
5.9
45.8

8.2
12.7
71.9
0.0
7.1
50.2

32.7
1.1
53.8
3.1
9.4
34.3

26.1
5.6
58.6
0.0
9.7
38.6

23.5
5.8
60.0
0.0
10.7
43.0

0.45

0.54

0.48

0.45

0.49

0.44

0.42

0.40

0.37

0.36

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

Table 3
Local pollutants emission under base- and NERT cases in selected year, 103 tons
Local
Estimated Base case
pollutants values
in 2000
2010 2015
CO
PM10
SO2

257
0.46
0.39

NOx emission reduction targets

10%
2020

2010

30%
2015

2020

2010

50%
2015

2020

2010

2015

2020

92.05 27.93 29.85 95.11 31.64 33.92 128.03 65.85 68.86 118.69 116.46 120.15
0.80 1.12 1.30 0.53 0.80 0.95
0.30 0.46 0.55
0.21
0.33
0.35
0.96 1.41 1.63 0.62 1.00 1.19
0.28 0.52 0.63
0.11
0.27
0.31

of average energy intensities in 1990 in cities in industrialized countries; 0.78 MJ/p-km in Amsterdam, 1.6 MJ/p-km in Boston, 0.63 MJ/p-km in Singapore and 1.46 MJ/p-km in Washington (Kenworthy et al., 1999).
5.3. Environmental co-benets of NERTs
The eects of NERTs in Beijing on local or regional level pollutant emissions are mixed. With
NERTs, CO would increase but SO2 and PM10 (particulate matter whose diameter is less than
10 lm) would decrease compared to the emission level in the base case. Table 3 presents the
CO, PM10 and SO2 emissions under the NERT scenarios for selected years. Emissions of CO
in the base case would decrease by two-thirds during 20102020 due to increasing share of diesel
buses and LPG cars and replacement of gasoline cars after 2014. As a result, CO emissions per
passenger-km would decrease from 1.06 g/p-km in 2010 to 0.25 g/p-km in 2020 in the base case.
Introduction of NERT would have an adverse eect on CO emissions from the transport sector
as compared to that in the base case. At 50% NERT, CO would increase by three times in 2020
compared to base situation as diesel buses are replaced by LPG vehicles.
Emissions of PM10 in 2020 would be 60% higher than that in 2010 in the base case mainly because of an increase in diesel buses. This implies an increase in PM10 emissions intensity from
0.009 g/p-km in 2010 to 0.01 g/p-km in 2020. Under selected NERTs, PM10 emissions would be
lower than in the base largely due to the replacement of diesel by LPG and electric trolley buses.
At 50% NERT, total PM10 emission would be reduced by 73% in 2020 as compared to the base.
Emissions of SO2 would increase by more than 65% during 20102020 under the base case
again mainly due to the increase in diesel buses. In the NERT cases, total SO2 emission would
also be lower than that in the base case. With 50% NERT, total SO2 emission would be reduced
by 80% in 2020 as compared to that in the base case. Thus, a reduction of NOx emission would
have signicant co-benets in terms of lower PM10 and SO2 emissions. Although a NERT would
help reduce NOx, SO2 and PM10 in the city, the increase in electricity consumption with the use of
electric trolley buses and electric cars in NERT cases would shift the emission of these pollutants
from Beijing to other areas where thermal power plants are located 1. For example, in 2020 at 50%
NERT, the SO2 and NOx emission from power plants due to electricity use in Beijings transport
sector would be 60% more than that in the base case assuming average emission factors for coalred power plants in China.
1

Thermal power generation accounted for more than 80% of electricity production in China in 2000.

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

30
25

US$/kg

20
15
10
5
0

10%

20%

30%

40%

50%

NOx reduction target

Fig. 2. Average incremental cost of NOx abatement.

The eect of NERT in terms of CO2 from the transport sector is mixed. Cumulative CO2 emissions during the planning horizon increase by 1.1% and 1.3% under 10% and 20% NERT respectively mainly due to increases in the stock of LPG buses, but it would decrease by 4.9% at 30%
NERT and 12.2% at 40% NERT because of the use of hybrid cars. At 50% NERT, CO2 would
be 18% less than that in the base case.
5.4. Cost implications of NOx emission reduction
The total cost of transport services without restrictions on NOx emission during the planning
horizon would be $16.77 billion (at 2000 prices). The total cost of transport services would be
$16.78 billion at 10% NERT to $22.08 billion at 50% NERT. It is found that the cost would increase by less than 0.1% at an emissions reduction target of 10% whereas it would increase by
as much as 31.7% when the target is increased to 50%. The cost of supplying transport services
ranges from 3.5 cents per km in the base case to 4.7 cents per km at 50% NERT.
Fig. 2 shows the average incremental NOx abatement cost (AINAC) at dierent NOx reduction
targets. The AINAC is very small up to NERT of 20% but then increases rapidly until NERT of
40% and at a slower rate thereafter. AINAC would increase from $0.15 per kg at 10% NERT to
$22.63 per kg at 50% NERT. At higher NERTs the AINAC would be higher mainly because of
the larger share of hybrid cars in the vehicle stocks. The AINAC at lower values of NERT (i.e.,
10%) is found to be less than per ton of NOx reduction cost associated with the use of individual
mitigation options like catalytic converters, fuel quality improvement and vehicles conrming
Euro 1 and Euro 2 standards (Lachance and Mierzejewski, 1998; Shao et al., 2001). This is because
of the adoption of fuel switching and modal shift options to achieve aggregate city level NERT.

6. Conclusions
A key nding here is that the LPG buses would replace diesel buses in Beijing at 10% NERT
while the shares of all other transport options would remain unaected. At higher emission reduction targets of 2050%, electric trolley and LPG buses would be cost eective, and would partly

10

R.M. Shrestha et al. / Transportation Research Part D 10 (2005) 111

replace diesel vehicles. Hybrid cars would play a major role at higher emission reduction targets to
meet the NERT. The selection of energy ecient and environmentally friendly modes under NOx
reduction target would bring down PM10 and help improve local air quality. Furthermore, there
would be benets in terms of lower emissions of acid rain causing pollutants (i.e., SO2 and NOx)
and CO2 (a major greenhouse gas). Emissions of CO, however, would increase while meeting the
NERTs. It is also found that total cost of the transport sector would increase by less than 0.1% at
NERT of 10% whereas it would increase by as much as 31.7% when the target is set at 50%.
Due to lack of relevant data, the study focused only on supply side planning and does not consider changes in travel demand that could occur due to changes in transport service prices resulting from changes in costs of services. Further, the study has considered only the passenger
transport modes in Beijing and does not include freight transportation options. The vehicle
mix model used does not consider the cost of travel time and congestion. In fact, there could
be signicant dierence in travel time and congestion level between MRT and traditional vehicle
modes. Also to be noted is that the objective of the vehicle mix model is to minimize the total cost
of meeting passenger travel requirements rather than welfare maximization. Personal vehicles may
be preferred to public transport services on other grounds; e.g., personal vehicles provide personal
exibility and freedom of use. Vehicles like cars are even considered as a status symbol in the society in developing countries (Sperling and Salon, 2002). Vehicles like motorcycles are easy to park.
These factors are not, however, considered in the present study. There could be some variation in
the results, if these factors are taken account.

Acknowledgments
This paper is a part of a study, Analysis of Technical Options for Mitigating Environmental
Emissions from the Urban Transport System in Selected Asian Countries, funded by Swedish
International Development Cooperation Agency (Sida). The authors would like to thank two
anonymous referees and the editor of the journal for their helpful comments. However, the
authors are responsible for any remaining errors.

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