Intrastructure to 2030 – Volume 2 - OECD.org

1 To 2030 Volume 2 MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORT-:HSTCQE=UXVXV^:The full text of this book is available on line via these links: with access to all OECD books on line should use this link: is the OECD s online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials, ask your librarian, or write to us at 978-92-64-03131-903 2007 03 1 PInfrastructure to 2030 Volume 2 MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORTI nfrastructure systems play a vital role in economic and social development. Increasingly interdependent, they are a means towards ensuring the delivery of goods and services that promote economic prosperity and growth and contribute to quality of life. Demand for infrastructure is set to continue to expand significantly in the decades ahead, driven by major factors of change such as global economic growth, technological progress, climate change, urbanisation and growing congestion.

2 However, challenges abound: many parts of infrastructure systems in OECD countries are ageing rapidly, public finances are becoming increasingly tight and infrastructure financing is becoming more complex. The looming infrastructure gap needs to be closed. Where will new sources of finance come from and what role will the private sector play? How can infrastructure systems be managed more effectively and efficiently? Will the financial, organisational, institutional and regulatory arrangements (the business models ) currently in place be able to respond adequately to the complex challenges they face, and are they sustainable over the longer term? This book assesses the future viability of current business models in five infrastructure sectors: electricity, water, rail freight, urban public transport and road transport.

3 It proposes policy recommendations that aim to enhance capacity to meet future infrastructure needs, including measures that could be taken by governments both collectively and individually to create more favourable institutional, policy and regulatory frameworks. This book is the second of two publications on the future of infrastructure development. It follows Infrastructure to 2030: Telecom, Land Transport, Water and Electricity published in 2006. Infrastructure to 2030 Volume 2 MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORTI nfrastructure to 2030 Volume 2 MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORTORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENTThe OECD is a unique forum where the governments of 30 democracies worktogether to address the economic, social and environmental challenges of OECD is also at the forefront of efforts to understand and to help governmentsrespond to new developments and concerns, such as corporate governance, theinformation economy and the challenges of an ageing population.

4 The Organisationprovides a setting where governments can compare policy experiences, seek answers tocommon problems, identify good practice and work to co-ordinate domestic andinternational OECD member countries are: Australia, Austria, Belgium, Canada, theCzech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland,Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand,Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey,the United Kingdom and the United States. The Commission of the EuropeanCommunities takes part in the work of the Publishing disseminates widely the results of the Organisation s statisticsgathering and research on economic, social and environmental issues, as well as theconventions, guidelines and standards agreed by its available in French under the title:Les infrastructures l horizon 2030 Volume 2 LECTRICIT , EAU ET TRANSPORTS : QUELLES POLITIQUES ?

5 Cover photo credits: Getty Images/Digital Vision (for wastewater treatment plant, electricity pylons,freight train) and Ron Garnett, AirScapes International (for The Confederation Bridge, Canada). OECD 2007No reproduction, copy, transmission or translation of this publication may be made without written should be sent to OECD Publishing or by fax 33 1 45 24 99 30. Permission to photocopy aportion of this work should be addressed to the Centre fran ais d exploitation du droit de copie (CFC), 20, rue desGrands-Augustins, 75006 Paris, France, fax 33 1 46 34 67 19, or (for US only) to Copyright ClearanceCenter (CCC), 222 Rosewood Drive, Danvers, MA 01923, USA, fax 1 978 646 8600, work is published on the responsibility of the Secretary-General ofthe OECD.

6 The opinions expressed and arguments employed herein do notnecessarily reflect the official views of the Organisation or of the governmentsof its member TO 2030: MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORT ISBN 978-92-64-03131-9 OECD 20073 ForewordThis publication is the final report on the two-year OECD Futures Project GlobalInfrastructure Needs: Prospects and Implications for Public and Private Actors . Itpresents the main findings and policy recommendations from the project, as well asexpert papers that assess the future viability of current business models in electricity,water, rail, road and urban public transport infrastructure an extensive international consultation process with governmentdepartments and agencies, corporations and research institutes, the global infrastructureneeds project was carried out over 2005-07 with the purpose of taking stock of thelong-term opportunities and challenges facing infrastructures world wide, and topropose a set of policy recommendations to OECD governments that aim to enhanceinfrastructures contribution to economic and social development in the years to project had a time horizon out to 2020-30 and covered electricity.

7 Surface transport,water and telecommunications. The focus was on OECD countries, with the so-calledBRICs (Brazil, Russian Federation, India, China) included in some of the project was funded by voluntary contributions from governments, publicagencies and corporations, who were represented on the Steering Group. The SteeringGroup advised the OECD Project Team on the content and direction of the project. (Thereader will find a list of the Group s members at the end of the book.) Countriesrepresented were Canada, Denmark, France, Mexico, the Netherlands, Norway, Portugal,Spain, Sweden, Switzerland and the United Kingdom. The Steering Group met four timesbetween June 2005 and December 2006. An interim report was published in 2006 as anOECD book under the title Infrastructure to 2030: Telecom, Land Transport, Waterand Electricity, reflecting the findings from the first stages of the project andestablishing a broad picture of trends and developments likely to impact oninfrastructures and infrastructure investment over the next few the chapters in this Volume have benefited from expert advice and commentfrom the Steering Group.

8 The conclusions and policy recommendations contained herebuild on a wide range of research, discussions and exchanges of views conducted withinthe project. These include primarily the papers written by the OECD InternationalFutures Programme Secretariat and outside consultants; materials supplied byparticipants in the Steering Group and OECD specialists from other Directorates involvedin the project; the rich discussions conducted during the Steering Group meetings; anddetailed written comments provided by Steering Group members. The recommendationsFOREWORDINFRASTRUCTURE TO 2030: MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORT ISBN 978-92-64-03131-9 OECD 20074are addressed primarily to policy makers in OECD countries, and also to those in thelarger non-OECD economies.

9 However, many of the conclusions and recommendationshave implications for decision makers in the private project was led by the OECD s International Futures Programme, a forward-looking multidisciplinary unit which provides the OECD Secretary-General and theOrganisation with early warning on emerging policy issues. It does this by identifyingmajor developments and analysing key long-term concerns to help governments mapstrategy. Its role is also to promote horizontal, cross-Directorate themes in the , the work was conducted in co-operation with several OECD Directorates andAgencies, notably: The European Council of Ministers of Transport (ECMT) and the JointTransport Research Centre (JTRC); the Environment Directorate; the Directorate forScience, Technology and Industry; the Statistics Directorate; and the International EnergyAgency (IEA).

10 The project has benefited substantially from inputs and comments fromcolleagues in those parts of the house. A list of contributing experts, both in-house andoutside, involved in the project appears at the end of the Stevens directed the work of the authors and the preparation of the twopublications in this project. Pierre-Alain Schieb was initiator and co-ordinator of theproject. Michael Oborne was Chairman of the project s Steering Group. Anita Gibson,Manon Picard, Emilie Goux and Concetta Miano provided technical support over thecourse of the project; and Belinda Hopkinson, the editing for this thanks are extended to all those who contributed to the project over thecourse of the two , June 2007 TABLE OF CONTENTSINFRASTRUCTURE TO 2030: MAPPING POLICY FOR ELECTRICITY, WATER AND TRANSPORT ISBN 978-92-64-03131-9 OECD 20075 Table of ContentsExecutive Summary.