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
This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.