Delaying mass-transit investments today could mean a pricey game of catch-up for tomorrow’s projects

All aboard  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

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Tomorrow’s transit The news • Green transition. The costs of climate change will far outweigh the costs of transitioning to a low-carbon economy, the European Central Bank (ECB) announced in a recent report. According to the ECB’s modeling of a worst-case scenario in which nothing is done to limit global warming, European GDP could drop by 10%, while corporate loan defaults may increase as much as 30%. The report noted physical damage and risk as particularly concerning, given this summer’s wildfires and floods in Europe. [FT] • Transit transformation. More than half of the global population lives in cities, which emit more than two-thirds of carbon dioxide emissions worldwide. Making mass transit more efficient, more popular, and less polluting can help slow climate change. Some cities—including in Europe and South America—are cutting gas and diesel from their public-transit systems by bringing back electric tram lines, building cable cars above hills, and electrifying buses. [NYT] By 2050, an additional 2.5 billion people will be living in cities, and rail can move more people than any other kind of transportation. Our insights • Why it matters. By 2025, cities and rail operators will spend almost $100 billion on new rolling stock, including buses, railcars, trolley cars—and ferry boats. And they’ll break ground on more than $1 trillion in new light-rail and metro projects. The case for building new rail is strong: it’s enormously efficient, doesn’t emit greenhouse gases or smog-causing pollutants (if electrified), and is typically faster than other transport modes. However, rail is also expensive, and projects can be lengthy. • Mobility for tomorrow. The coming decades will be pivotal for cities’ mobility investments. It’s unclear, however, how technology, demographics, economics, and other factors that shape these cities will play out; transportation leaders may be understandably hesitant to take action. See our article for four steps that cities and rail operators can take to shape seamless mobility systems that serve passengers today and well into the next century. — Edited by Justine Jablonska    Get on board Was this forwarded to you? Sign up here. Or send us feedback — we’d love to hear from you. Follow our thinking This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2021 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007