The Shanghai municipal government has invested in the construction of urban transportation by developing a rail-based MRTS in the city. Construction began in 1990, and the system went into operation in April 1995. In view of growing passenger travel demand, the low efficiency of other current transportation modes and pressing environmental requirements, a detailed plan was developed in 2001 that became the basis of a significant expansion of the system. The plan was designed by involving city government and the Urban Research and Planning Institute.

The plan’s implementation was supported by the following:

• A well-designed MRTS construction plan was modified several times to keep pace with developing trends in the economy, society and the environment in Shanghai;
• Financial innovation to fund MRTS development. A multi-entity investment system was set up, which included government investments, local bonds, loans from domestic banks and foreign governments or international financial organizations; and
• The MRTS plan was integrated with development policies along the subway lines.

Some impacts identified include reduced traffic jams in the downtown area, reduced travel time, reduced oil consumption from the operation, reduced air pollution, economic development along MRTS path and a reduced cost of congestion in the downtown area, thereby helping the central downtown core city to function fully as the service center of production. One lesson learned from this experience was that MRTS construction required thorough long-term planning due to its high construction costs, meaning that innovative measures were required to finance the system. Another lesson: a blueprint of development also needs to be prepared based on detailed feasibility studies, which will allow for future regional economic and environmental development.

Case study courtesy of the UNEP Publication, Reducing Emissions from Private Cars: Incentive measures for behavioural change.