Railway's long-awaited renaissance
Today, thanks to new high-speed technologies and a pressing need to cut emissions, an old mode of transport is finding relevance in a new age
Train travel has been with us for two centuries. Its explosive growth in the 1800s transformed landscapes and forever altered the geography of London and other great world cities. But the advent of the car meant that in many regions it spent the last century in retreat. Now, powerful factors are coming together to revive the fortunes of railway.
A need to limit emissions and congestion and at the same time secure reliable access to resources in undeveloped regions – such as Africa – are among these drivers. And new technologies add to the appeal of trains.
High-speed rail is increasingly viewed as a solution to one of our biggest crises: climate change. This is because transport accounts for such a high proportion – around one third – of all energy demand. It is also responsible for a quarter of global carbon dioxide emissions arising from fuel combustion, according to the International Energy Agency, a global body established in the 1970s to promote global energy security.
In comparison with other transports, railway's sustainability credentials are impressive.
The graph, below, compares different modes of transport, based on passenger numbers and freight volumes, on the equiavlent basis of oil consumed.
Energy intensity of different types of transport
Comparing transport modes on the basis of equivalent oil consumed
The trend in rail investments is already clear (see below). China is an astounding outlier, laying tens of thousands of kilometres of track in under a decade.
High-speed track length by region
China's high-speed network has dwarfed the rest of the world's – in under a decade
The final graph, below, shows the IEA's view of the future of rail. Its "base" scenario extrapolates from policies and projects already announced. The "high" rail scenario envisages a potentially "significant shift of passengers and goods to rail transport" depending on "policy instruments which might be deployed".
Projected growth in rail energy demand
Just how fast could railway grow?
Source for all graphs: International Energy Agency, Future of Rail report, 2019
The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Limited 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored.