Presentation on theme: "to Low-Carbon Green City"— Presentation transcript:
1 to Low-Carbon Green City UEA/Gwangju Approachto Low-Carbon Green CityDiscussion Paper for the joint UNEP and UNFCCCworkshop for Urban Methodologies for the Built Environment, UNFCCC Headquarters, Bonn, Germany27-28 March 2014Urban Environmental Accords(UEA)SecretariatIn collaboration with
2 In Collaboration with: Research TeamSupervision and Coordination :Kwi-Gon Kim, Ph.D., UEA SecretariatLead authors :Byoungchull OH, Ph.D., UEA SecretariatSeung-Ho Seo, UEA SecretariatYoung-Du Choi, UEA SecretariatAdministrative :Jung-Sam Lee, Gwangju Metropolitan CitySang-Kap Kim, UEA SecretariatNam-Ghiu Park, UEA SecretariatAdvisory Group :International Inter-Agency Advisory Group for the Urban Environmental Evaluation Index and Urban CDMIn Collaboration with:UNEPUNFCCCWorld BankKEI
3 to Low-Carbon Green City UEA/Gwangju Approachto Low-Carbon Green CityTable of ContentsⅠ IntroductionⅡ Components of Framework for UEA/Gwangju Approachto Low-Carbon Green CityⅢ UEA/Gwangju Approach in the Context of Modalities &Procedures of CDM and NAMAsⅣ Urban CDM Program :A Mandatory Approach to Carbon FinancingⅤ GHG Projection•Diagnostics Program(GPD) and CarbonBanking System : A Voluntary Approach to Carbon FinancingⅥ Expanded PoAⅦ Conclusions & SuggestionsⅧ Proposal on New Initiative for Urban CDM - Development of a Compensation Model for Carbon Financing
4 4 | 71Ⅰ IntroductionWe live in the era of global warming which causes severe extreme weather events. Human beings are experiencing the events right now in the every corner of the planet.It has been proven that conventional urban planning fails to meet requirements and demand for the safe and comfortable globe. We, therefore, need ceaseless planning innovation. Comprehensive carbon-centered (3Cs) should be the mainstream of planning to combat climate change at the city-scale.The past decades were important time in terms of sustainability from low-carbon emission to carbon-neutral city in Gwangju. Gwangju has devotedly worked in this field with national and international partners and like-mind organizations and people.This paper highlights the initiatives and projects of Gwangju/UEA to reduce greenhouse gas (GHG) emissions towards low-carbon Green city which is one of Gwangju/UEA priority agendas.
5 Ⅱ Components of Framework for UEA/Gwangju Approach 5 | 71Ⅱ Components of Framework for UEA/Gwangju Approachto Low-Carbon Green CityUEA/Gwangju Approach to Low-Carbon Green CityTheoretical model of Urban CDMFeasibility StudyTheoretical model ofUrban CDM DevelopmentUrban GHG AccountingCity Climate PlanningCarbon FinancingGPD & Carbon Banking SystemExpanded PoAUrban CDM Feasibility StudyOutcomes of Urban CDMUrban MethodologyUrban CDM HandbookUrban CDM ToolkitCo-development of City Climate Planner Creditation Program
6 Ⅲ UEA/Gwangju Approach in the Context of Modalities & 6 | 71Ⅲ UEA/Gwangju Approach in the Context of Modalities &Procedures of CDM and NAMAs3.1 UEA/Gwangju Approach in the Context of Modalities & Procedures of CDM3.2 UEA/Gwangju Approach in the Context of Modalities & Procedures of NAMAs
7 Standardized Baseline Modelling & Regression 7 | 713.1 UEA/Gwangju Approach in the Context of Modalities & Procedures of CDMContentsConventional CDMUrban CDMGPD & CBSExpanded POAOthersInventorySelection of inventory yearSelection of scope of GHG (direct/indirect emissions)Measurement with Equipment• Calculation• Modeling Estimation by situation analysis• Billing SystemSelection of scope of GHG among expanded projects (direct/indirect emissions)Combination of Measurements with EquipmentStandardized BaselineConstant level of emission• Considerations for population and economic growth, etc.ReductionActivitiesPrioritizing reduction projectsBy projectBy sectorBy Multi-SectorExpanded or CombinedModelling & RegressionUse of existing methods approved by UNFCCCNew methodologyAnalysis on projected GHG emission by using GPDDevelopment of projection equation through analysis of electricity/city gas/drinking water consumption Approach in the aspect of urban aggregationAccountingCarbon markets implemented at the national or regional levelCarbon markets to be implemented at the city level- Compliance Market- Voluntary MarketPreparation for the access to carbon marketAdditionalityAdditional initial capital investmentMRVSubmission of MRV reportVerification/certificationNote: 1) GPD : GHG Projection & Diagnostics Program2) CBS : Carbon Banking System
8 8 | 713.2 UEA/Gwangju Approach in the Context of Modalities & Procedures of NAMAsSteps to a NAMAsFig. 1 Step to a NAMAsSource : Nationally Appropriate Mitigation Actions(NAMAs), Steps for Moving a NAMA from Idea towards Implementation Ver. 9.0, giz
9 Ⅳ Urban CDM Program : A Mandatory Approach to Carbon Financing 9 | 71Ⅳ Urban CDM Program : A Mandatory Approach to Carbon Financing Urban CDM, which was coined by Professor Kwi-Gon Kim, is a holistic forward-looking planning tool that integrates the elements of GHG analysis maximizing livability and quality of life for the people in broad terms. Good GHG accounting is a pre-requisite for good carbon planning. Urban CDM is an economic tool which helps financial analysis in a holistic manner. Urban CDM is all about return of investment, offset and benefits.What is the Urban CDM? Urban CDM is a mechanism which gives financial incentives and provides Certified Emission Reductions (CERs) as much as amount of emission reduction at the city-scale compared with baseline emissions at the city level. Therefore, it can be used as a political carbon decision support system both for green growth and economy and for urban planning and management. Rationale behind the Urban CDM- A tool for carbon financing: market-based mechanism- A tool for urban GHG accounting: urban metabolism-based mechanism- A tool for 3Cs (Carbon Centered Comprehensive) planning: land-use based mechanism
10 Why is the Urban CDM needed urgently? 10 | 71Why is the Urban CDM needed urgently?Cities are main sources of global GHG emissions and a major pollutant- 50% of the world's population now lives in cities. By 2050, three out of four people are expected to live in urban areas, due to urban migration- Urban areas currently use 67% of the world's energy and accounts for over 71% of global GHG emissions. (World Bank, 2011) Less than 1% of projects registered with the CDM are credited to cities.- Interrelated Cross-Sectoral approaches are not implemented, even in the case of reduction activities of methodologies approved by UNFCCC. Efforts to reduce GHG emissions: The impact is marginal- Due to financial vulnerability of developing countries, efforts to reduce GHG emissions and investment in environment protection are economic burden for cities in developing countriesThis is time to look at the CDM for the whole city.
11 Objectives of the Urban CDM 11 | 71Objectives of the Urban CDM To develop Urban CDM methodology to be registered in the UNFCCC To develop carbon accounting that can be used in the compliance market (CDM), the voluntary market, etc. To develop carbon reduction emission strategies To develop a low-carbon green city planning system module (3Cs) To mainstream low-carbon green city development into urban planning in a holistic way
12 12 | 71Audience/PartnersThe Urban CDM model seeks to provide a user-friendly communication in comprehensive analysis of a very wide spectrum of large-scale integration possibilities, as seen in Figure 2. Therefore, the UEA has been working closely with UNEP, Korea Environment Institute (KEI), and UEA member cities, in collaboration with UNFCCC and the World Bank.
13 Fig. 2 Integrated total Urban CDM model 13 | 71Conceptual model of the Urban CDM Here is our conceptual model for developing the Urban CDM. How we have arrived this model is a reflection process of analyzing and validating documents, which have been conducted. This model is very useful to understand inter-relationships between energy suppliers and consumers, and between built form, urban infrastructure, and CDM and technology mechanism for them, in a total holistic manner.Fig. 2 Integrated total Urban CDM model
14 Main features of the Urban CDM model include: 14 | 71Main features of the Urban CDM model include: The Urban CDM model is a new type of CDM with the combination of different categories/sectors for more than one country. It is a cross-sectoral approach to climate change. The model includes the combination of a very high number of different technologies that are relevant for urban energy grid systems. The model has a coherent documentation on the basic of procedure and standard of the UNFCCC CDM and seeks to provide a user-friendly communication in project descriptions. The model aims for calculating the cost and carbon benefits of the total system at the city-scale, which can be divided into investment costs, operation costs, and taxes, such as CO2 emissions trading costs and financial benefit such as CDM, in the course of CDM documentation. Thereby, the model can create data for further analysis of socio-economic feasibility studies, such as expanded cost-benefit analysis, including balance of payment, job creation, industrial innovation, and so on.
15 Financial modeling of the Urban CDM 15 | 71Financial modeling of the Urban CDMUrban CDM is a business case. The methodology of financial modeling of the Urban CDM incorporates the basic project approach of firstly identifying the carbon reduction solutions and quantifying the associated emissions, and then modeling the identified additional cost (additionality) to be credited with the Urban CDM and benefits, regulatory and macroeconomic influences.
16 16 | 71The following Figure 3 shows multi-layers of finance modeling by different GHG emissions sources. It involves development of cost, supporting regulatory and funding environment including CERs and credit points and macro economic scenarios.Financial calculations include internal rates of return (IRR), payback periods, net present value, cash flows and cost-effectiveness analysis.This model can be used for solution for reduction actions viability decision. If the costs of reducing CO2 emissions from the traditional technology is included in the cost calculations, an environmentally better solution would be more cost-effective than the traditional one from an economic point of view in the long run.
17 Fig. 3 Multi-layers of financial modeling by GHG emissions source 17 | 71Fig. 3 Multi-layers of financial modeling by GHG emissions sourceNote: 1) Blue line indicates the cost with traditional equipment2) Dotted redline indicates the cost with additional initial capital investment and CERs.
18 18 | 71Ⅴ GHG Projection•Diagnostics Program(GPD) And Carbon Banking System(CBS) : A Voluntary Approach to Carbon Financing5.1 Background of GPD5.2 Development process of GPD to date5.3 Purpose of GPD5.4 The GPD is being developed with the following objectives :5.5 Procedure of GPD for low-carbon green city development5.6 The application of the GPD to the Carbon Banking System5.7 Draft GHG Projection • Diagnostics Expanded Version5.8 Overall Timeline
19 19 | 715.1 Background of GPD Many GHG-related initiatives are based on Global Protocol for Community-Scale Greenhouse Gas Emissions (GPC)- To develop case studies of best practices targeting more than 30 citiesThe first GHG accounting tool for Chinese cities was also developed based on the GPC.Source: It is expected that Gwangju/UEA GPD will be spread to UEA member cities and special invitees.
20 5.2 Development process of GPD to date 20 | 715.2 Development process of GPD to dateDevelopment of the Urban CDM commenced in April, 2011, as a result of memorandum of understanding between Gwangju and United Nations Environment Programme (UNEP)Presentation of the initial draft in the 2013 UEA San Antonio SummitPresentation of the Gwangju/UEA project at the World Bank City Climate Planner Certification Program WorkshopDevelopment of GPD expanded version in 2014 with the financial support from the Ministry of Environment, KoreaPublication of the full version of the GPD in February, 20155.3 Purpose of GPDThe purpose of this program is to propose the developed system to the international society in order to seek for and utilize climate respond funds (e.g. GCF), so that wider range of GHG reduction projects becomes available thus contributing global climate change response in an active manner.
21 5.4 The GPD is being developed with the following objectives : 21 | 715.4 The GPD is being developed with the following objectives :To help cities prepare GHG inventory at a macro and aggregated manner at the city-scaleTo help cities develop effective tools for baseline scenario through the use of statistical projection methodsTo help cities have systematic planning and quantitative data support for low-carbon city developmentTo support cities to measure collective performance with systematic and credible monitoring over time; andTo facilitate access of cities to climate finance opportunities
22 Fig. 4 The GPD model for low-carbon green city development 22 | 715.5 Procedure of GPD for low-carbon green city developmentAs a first step, base year inventory puts its basis on a GHG inventory developed for GPD, which is made simultaneously with the typing of input data for development of project equation in the baseline scenario analysis without GHG reduction policy & projects.The next step consists of a series of calculations that involve projected emissions reduction based on climate action plan and observed emissions reduction on the site.Then the model is divided the in to a technical or market-economic optimizing.Fig. 4 The GPD model for low-carbon green city development
23 5.6 The application of the GPD to the Carbon Banking System 23 | 715.6 The application of the GPD to the Carbon Banking SystemThe GPD program is an urban GHG accounting and carbon planning tool which is being developed by the UEA/Gwangju and disseminated to UEA member cities. These are the interim results of the pilot-testing of the tool for the carbon banking system.
24 The Operating System of the Carbon banking 24 | 71 The Operating System of the Carbon banking1) Carbon Points Calculation ProcedureEnergy SavingConversion of Energy Savings into CO2 ReductionOffer of Carbon Points which Equal to US$ 560/tonCO2eq
25 2) Phased-in-operation 25 | 712) Phased-in-operation〈Pilot test〉a. Duration: July December 2013b. Participants: Households (single-unit/multi-unit residence)c. Target areas: Electricity, city gas, drinking waterd. Grant points based on reduction of CO2 emissions to the participants (Credits granted by Gwangju bank)*Grant points can be used for purchase of green goods/discount in park, etc.
26 26 | 71〈Main project〉a. Grant points based on reduction of CO2 emissions to the participants•Organization: Ministry of Environment (national)•Operational support: Korea Environmental Corporation•Program operation: Gwangju Metropolitan Cityb. Carbon points are issued when there is more than 5% reduction in the average energy consumption in the past 6 months (electricity, city gas, drinking water) compared to the average of the previous 2 years.c. Benefits of the 'Green Card' issued to participants: (See Figure 5)•Carbon points: incentives for reductions provided by the Ministry of Environment and the local government•Green consumption: when buying registered eco-friendly products with green card, can use the carbon points and earn additional (1~5%) points.•Discounted price in public sectors: 130 national parks, cultural facilities, art performances, etc.•Credit card function: for purchase of public transportation (bus, subway, train), in addition, earn 10-20%d. The consumption of electricity, city gas, and drinking water are monitored through the respective meters in each household (See photos 1, 2 and 3).
27 b. New card to be used from 2014 27 | 71• Photos of green cards and measuring metersa. Card used inb. New card to be used from 2014Fig. 5 Green cardPhoto 1 Electricity meterPhoto 2 City gas meterPhoto 3 Drinking water meterPhoto 4 Overview of Sinhyochon solar village, GwangjuSource: photo 1, Taken at Sinhyochon solar village, Gwangju, by UEA, on 10 January, 2014photo 2,photo 3,
28 28 | 713) Operating SystemThe operating diagram (Figure 6) maps out main steps of carbon banking system together with the roles of main actors who are engaged in the carbon banking process. The process starts with signing ceremony for agreement on the carbon-smart model city between central and local governments, and ended up with issuance of carbon points by private banks.It is a public-private partnership (PPP) project. This project has seen as a collaborative and collective effort among many stakeholders including city government, private consulting company, etc.
29 Fig. 6 The Operating System of the Carbon Banking System 29 | 71Fig. 6 The Operating System of the Carbon Banking System
30 Roles of main actors of the system 30 | 71Roles of main actors of the systema. Households•Participate in carbon banking system•Save energy (in electricity, city gas, drinking water)•Use and accumulate carbon pointsb. Gwangju Metropolitan City•Data analysis on the consumption of electricity, city gas, and drinking water•Promotion of carbon banking system, and processing new applications•Report on energy use reductions to the bank•Provision of related information to energy/city gas/drinking waterworks companies•Expansion of affiliates businesses for more use of carbon pointsc. Korea Environment Corporation :•Process data on Gwangju's electricity, city gas, and drinking waterd. Korea Electric Power Corporation(electricity company) :•Report data on energy use to Gwangju and Korea Environment Corporatione. Gas companyf. Waterworks company•Report data on energy use to Gwangju and Korea Environment Corporationg. Billing company•Issue bills for electricity, city gas, and drinking waterh. Green Start Network•Promote carbon banking system and encourage participation•Educate and promote green life, and organize green leader consultative groupI . Education center•Promote carbon banking system•Operate green leader fostering coursej. Carbon bank(Gwangju Bank in , all local banks since 2014)•Issue carbon points with green cardk. The Ministry of Environment (joined since 2014)•Organize and manage the carbon banking system•Offer carbon points, cash-back, and other incentives
31 Carbon banking inventory project 31 | 71 Carbon banking inventory projectMethod for carbon banking inventory project(1) Selection of sectors- Electricity, city gas, drinking water(2) Selection of areas- Household and expansion to commercial, industrial, public sector(3) Data collection (main data)
32 Results of carbon banking inventory project 32 | 71Results of carbon banking inventory project- GHG emissions in Gwangju for electricity, city gas, and drinking water in household, commercial, industrial, public sectors( )
33 Carbon banking baseline project 33 | 71 Carbon banking baseline projectMethod for carbon banking system baseline project(1) Selection of sectors- The same as in the inventory project method(2) Selection of areas(3) Development of projection equation for baseline scenario- Multiple regression analysis- Projection period:(4) Selected variables- Independent variables•Electricity avg. price •City gas avg. price•City gas use households •Drinking water avg. price•Drinking water leakage rate •Population•Industrial production index •Temperature•Rainfall •Heating degree days•Cooling degree days •Season dummy•Year dummy- Dependent variables•GHG emissions
34 Results of the carbon banking baseline project 34 | 71Results of the carbon banking baseline project〈1st step〉 Selection of variables & details for data analysis: electricity, city gas, drinking water
35 〈2nd step〉 Results of the projection equation 35 | 71〈2nd step〉 Results of the projection equation(1) Data accumulation on temperature, precipitation, expenditure (electricity, city gas, drinking water), and population with actual measurement value of CO2
36 (2) Results of multiple regression analysis 36 | 71(2) Results of multiple regression analysis- Development of projection equation
37 37 | 713rd step〉 Gwangju pilot baseline scenario project for selected sectors:- Application of the development projection equation- GHG emissions projection results based on electricity, city gas, drinking water usage projection results (All applied sectors: household, commercial, industrial, public sectors) •Shows GHG emissions according to usage projection from 2013~2020
38 38 | 71 Effectiveness of the carbon banking system ( ) (targeted household sector : participating households)To boost GHG emissions reduction at household level and save energy in daily life To raise public awareness for climate change, and enhance the city's brand (value) image as a leading low-carbon green city.
39 39 | 71 GHG reduction projection scenario through the carbon banking system ( )Projection Equation estimates 973,188 tonCO2 of reductions by 2020 in the household sector: Carbon financing using the 'Carbon Banking System‘* Assumption: All Gwangju households participate by 2020 Comparison of emissions with and without carbon banking system policy, and emissions reduction
40 Carbon financing using the 'Carbon Banking System' in a graphic form 40 | 71 Carbon financing using the 'Carbon Banking System' in a graphic form
43 For more information : The World Bank Series “Urban Innovations” 43 | 71 For more information :The World Bank Series “Urban Innovations”We wanted to take a bottom up approach. Carbon banking starts with households, which is important because household and commercial activities account for 39% of greenhouse gas (GHG) emissions in Gwangju. It also helps to raise public awareness for climate change, enhancing the city’s brand as a low-carbon leader.Resource:
45 Ⅵ Expanded PoA for Urban CDM 45 | 71Ⅵ Expanded PoA for Urban CDM6.1 UEA/Gwangju Approach in the Context of Modalities & Procedures of CDM6.2 Case of Iloilo City, the Philippines6.3 Future Plan
46 46 | 716.1 UEA/Gwangju Approach in the Context of Modalities & Procedures of CDM1) CDM Reform In general Increased standardization Multiple methodology approach Improved interaction of UNFCCC with stakeholders The urban context Emission reduction in specific “priority sector” Usually dispersed projects comprising different technologies Multiple stakeholders, beneficiaries Strong interrelation/mutual interference between sectors, institutions Cities rather follow holistic and policy related approach to reduce emission, “Non-technical” projects with large mitigation potential (e.g. urban planning, policy and carbon governance) Limited experience/number of CDM projects so far
47 47 | 712) Summary of Comparison of Conventional CDM and Urban CDM New MethodologyContentsConventional CDMUrban CDM new methodologyTheoretical underpinningsIsolated standalone viewHolistic, Integrated, Smart viewContextSingular project development frameworkUrban planning and development frameworkScopeTechnology and products-oriented systemExtension of CDM to include policy, planning, andGovernanceMethodsUse of existing method approved by UNFCCCCombination of existing and new MethodBaseline scenarioConstant level of emissionConsiderations for population and economic growth. etc.Measurement or calculationMeasurementMeasurement and estimation (or Calculation)CertificationTradable certified emission reduction(CERs) at single CDM project levelAggregated tradable certified emission reduction(CERs) at the city-scale and between citiesMarketCarbon markets implemented at the nation atregional levelCarbon markets to be implemented at the city levelTool for urbanplanningTool for disconnected infrastructureTool for 3Cs(Carbon Centered Comprehensive)planning, Land-use based mechanismEffectivenessanalysisProject cost-benefit analysisCarbon balance sheet analysis
48 3) Conceptual Framework for the Urban CDM Methodology 48 | 713) Conceptual Framework for the Urban CDM Methodology Project Description : Flow DiagramConventional CDMUrban CDMAM0042 grid-connected electricity generation using biomass from newly developed dedicated plantations** Ref. Kim`s UNESCO Report
49 49 | 71 Conceptual ModelComparison of Baseline Scenario of Individual CDM Project and Urban CDM PoA ScenarioConventional CDMUrban CDM※ Plantation: straws, reeds, banana peel, corns*Ref. UNFCCC CDM Methodology Booklet (Information including EB 66 May 2012)• This Urban CDM Model is based on the Urban Smart Grid System and Integrated Urban Planning and Management. It can be scaled up into the Super Smart Grid System.
50 Step & activities of conventional CDM 50 | 71 Procedures for PDD(Project Design Document)Step & activities of conventional CDMUrban CDMStepActivitiesStep 1 :Using existing single project methodologyorDevelopment of single project methodology1. Project Overview2. Baseline Methodology3. Set duration of project implementation and of CERs issuance4. Monitoring methodology5. Calculation of GHG emissions6. Environmental effect evaluation7. Comments from stakeholdersStep 1 : Development and Registration of New Methodology for Urban CDMStandardization of Urban CDM methodology and registration to UNFCCC as a CDM project(This requires development or aggregation of methodologies available to use at a city-scale.)Step 2 : Planning1. Formation of Project Team2. Capacity building/training for citiesStep 3 :Project Design (Being Planned)3. Identification of participating cities4. Establishment of baseline scenario5. Calculation of the emissions expected without PoAs6. Development of Multiple PoAs7. Formulation of policy actions and development plans at the city scale8. Preparation of PoAs management plans9. Establishment of monitoring methodology to measure the actual level of emissions with PoAs10. Establishment of aggregation methodology11. Establishment of quantification and estimation methodology for cumulative volume of the emissions reduced with appropriate levels of aggregation12. Preparation of Project Design Document(PDD)*Note: Procedure for CDM project using existing methodology*Note: Procedure for registration of new methodology
51 Step & activities of conventional CDM 51 | 71Table ContinuesStep & activities of conventional CDMUrban CDMStepActivitiesStep 2 :CDM National Approval& ValidationStep 4 :National Approval13. Approval of PDD by designated national authority(DNA)Step 5:Validation14. Validation of designated operation entity (DOE)15. Request for registrationStep 3 :CDM Registration2. Apply for registration of CDM project to CDM Executive Board (CDM EB)3. Registration fee for CDM project varies projected average annual emission reductions.※ (Maximum fee is US$ 350,000, excluding CERs issuance fees which needs to be paid even fee-free cases)Step 6 :Registration16. Registration of PDD by CDM Executive Board (CDM EB)Financial ResourcesStep7 :Construction & OperationStep5 :Monitoring4. MRV (Monitoring, Report, Verification) by CDM project implementing body or the third party (for certification).※ Submit monitoring report to CDM Designated Operation Entity(DOE)Step 8 :17. Monitoring of GHG reduction activities18. Aggregation of monitoring results of PoAs19. Quantification or estimation of the cumulative volume of the emissions reduced, compared with the BAU baseline level of emissions20. Preparation of monitoring report (MR)
52 Step & activities of conventional CDM 52 | 71Table ContinuesStep & activities of conventional CDMUrban CDMStepActivitiesStep 6 :Verification & Certification5. The purpose of verification of CDM project is to identify achievements of actual GHG emissions reduction.6. CDM Designated Operation Entity (DOE) carries out evaluation of performance outcomes such as consistence between project design document and monitoring report, method used for monitoring, identification of GHG reduction amounts, project results, etc.7. CDM DOE request for issuance of Certified Emission Reductions (CERs) in accordance with certified amount of GHG reductions.8. CDM DOE documents a certification report based on the submitted verification report.Step 9 :21. Verification/certification of monitoring report by DOE & request for issuanceStep 7 :Issuance of CERs9. CDM EB receives MRV report and issues CERs unless objections are made in 15 days.Step 10 :22. Issuance of CERs by CDM EBStep 11 :Publication23. Publication of the report on Urban CDM Joint ProgramStep 12 :Post PoA Management & Evaluation24. Selling and trading of CERs25. Post-PoA management26. Periodic evaluation27. Final Project Reporting
53 4) Development of Expanded PoA towards the Urban CDM 53 | 714) Development of Expanded PoA towards the Urban CDM Definition of Expanded PoAUrban CDM in the form of multi-dimensional programmatic CDM (Expanded or Combined PoA)Expanded PoA is new type of format with the combination of different categories/sectors that is a format of Urban CDM which UEA seeks to develop eventually. (UNFCCC, unpublished paper, 2013)
54 Conceptual Framework 54 | 71 Conceptual FrameworkComponents of Framework for the Expanded PoA- Two options are considered to combine different sectors depending on the availability of methodologies approved by UNFCCC. Option 1 is to add a new CDM program of activities (CPA) to an existing CPA. On the other hand, Option 2 is to combine two new CPAs and more.- As an example, a LED project and a solar panel project are in the same category of activities, i.e. renewable energy, but a LED project and a geothermal heating project are in the different categories. Linkages between the Selected Components
55 6.2 Case of Iloilo City, the Philippines 55 | 716.2 Case of Iloilo City, the PhilippinesThe case of Iloilo City is designed to analyze possibilities of option 2, combining two new CPAs (Solar panels and Geothermal heating) as a pilot-testing project. It is important to note that once a PoA for LED + geothermal is registered, the boundary can be expanded to cover new cities and countries. Letter of Approval (LoA) from each of the country where the country is expanded will be needed. Also the PoA for more than one country can be registered if the LoA is available from all the countries (UNFCCC, unpublished paper, 2013).
56 + Expanded PoA Methods (1) Iloilo model: An illustration of option 2 56 | 71 Methods(1) Iloilo model: An illustration of option 2As a first step, optional combination of CPAs depends heavily on practical reality. Then, the combination can be expanded to cover more categories for the implementation of Figure 2. It means that the scoping process is necessary.Expanded PoA+Solar Panels(New CPA)Geothermal Heating(New CPA)Residential: Expanded(Parking Lots in City Hall, etc.)Public: Expanded(Flats, Buildings, etc.)Residential: New/Expanded(Buildings etc.)Public: New/Expanded(Buildings etc.)
57 (2) Identification of targets and project plan 57 | 71(2) Identification of targets and project plana. In the case of option 1•CPA 11 (LED project 1) : Location, building #, size, investment plan, etc.•CPA 12 (LED project 2) : Location, building #, size, investment plan, etc•CPA 21 (Geothermal heating project 1) : Location, building #, size, investment plan, etc.•CPA 22 (Geothermal heating project 2) : Location, building #, size, investment plan, etc.b. In the case of option 2•CPA 11 (Solar panels project 1) : Location, building #, size, investment plan, etc.•CPA 12 (Solar panels project 2) : Location, building #, size, investment plan, etc.(3) Estimation of GHG emissions reduction by each CPAa. In the case of option 1•CPA 11 (LED project 1) :•CPA 12 (LED project 2) :•CPA 21 (Geothermal heating project 1) :•CPA 22 (Geothermal heating project 2) :b. In the case of option 2•CPA 11 (Solar panels project 1) :•CPA 12 (Solar panels project 2) :
58 58 | 71(4) Introduced (Adopted) technologyOn the basis of contained many examples in the UNFCCC project descriptions, the following diagrams show the process of converting traditional energy systems into renewable energy systems.
59 59 | 71a. Monitoring•Utilizing Metersb. Expected Effects•Reduce CDM-related transaction costs•Enhance regional distribution (e.g. Asia, Africa)•Consider interactions between project activities and sectors in aggregation and effectiveness of the proposed expanded/combined PoAc. Duration•28 years (renewed every 7 years)d. Implication•Registered to UNFCCC by Gwangju, then distributed to other UEA Member Cities
60 6.3 Future Plan Phased-in-development of the Urban CDM 60 | 716.3 Future Plan Phased-in-development of the Urban CDMGwangju LED PoAUrban GHG Projection · Diagnosticsprogram, GPD (Gwangju)The World Bank initiativeStep 1Expanded/Combined PoA as a format of Urban CDMStep 2Urban CDMStep 3
61 61 | 71Spreading the expanded PoA to UEA member cities: to be introduced as an agenda at the next Iloilo UEA-Summit in 2015.Step 1Step 2
62 1) Expanded PoA in the Context of Modalities of CDM 62 | 711) Expanded PoA in the Context of Modalities of CDMCategoryInventoryStandardizedBaselineReduction GHGProjectionCalculation GHGAdditionalityMRVEnergy sectorRenewable energySolar energy○GeothermalenergyEnergyLED lampElectricityCity gasWaterDrinking waterBuildingsTransportationLand useWasteTotalN.B ) Bottom-up approach(World Bank) ) Top-down approach(UNFCCC, UNEP, Buildings)3) Rationale when combined ) Monitoring
63 Description of Projects(To be Selected) 63 | 712) The Application Description of Projects(To be Selected)Target Area : combination of a private house (or a multi-unit residence) and an office buildingTarget Project : e.g. a combination of solar panel project and geothermal energy project or a combination of two (or more) renewable energy projects feasible to implement in the cityLocation : residential area and city hall buildingSize : (regarding amount of energy generation) to the extent which a project can be feasibleHow to measure : use measurement metersInvestment Plan- Service Cost(Agency) : expenses for documentation to register a project to UNFCCC, and for a procedure with DOE (designated operation entity), etc.- Installation Cost(Equipment)∙ Solar Panel (2 sets) and measurement meters∙ Geothermal Energy Plant (1 set) and measurement meters- Financial Resources : by submitting application(proposal) to ADB, USAID, GIZ, or GCF for collaborative opportunitiesEffect- A PoA needs to be registered only once by the CDM Executive Board of UNFCCC. After that, it can include an unlimited and unspecified number of individual CPAs without recourse it to the CDM Executive Board.- The Expanded PoA is a pilot testing project developed by UEA in close consultation with UNFCCC. It will be introduced at 2015 UEA Iloilo Summit and spread to UEA member cities over the globe.Timeline- It aims to be registered to UNFCCC by the time of 2015 UEA Iloilo Summit
65 65 | 71What I have presented in this paper is the 3 years' work of UEA/Gwangju with international agencies for climate issues at the city scale. One of the broad areas that are being highlighted in the UEA/Gwangju program is climate change mitigation and related issues at the city-scale, encompassing best practices, planning, policy, outreach (Governance) and all the other facets.
66 66 | 717.1 ConclusionsLow-carbon green cities will have big investment opportunities in cities both in developing and developed countries such as social overhead capital (SOC).Gwangju/UEA are seeking to establish a world class carbon-free cityTwo of main features of Gwangju low-carbon policies are:Shifting from fossil-fuel oriented urban policy to new and renewable energy oriented urban policyUrban policies which are economically rational and can contribute to a global climate agendaUrban CDM, GHG Projections•Diagnostics Program and Expanded PoA that UEA/Gwangju in collaboration with UNEP and World Bank are currently developing will be utilized usefully not only as a tool for city carbon planning but also as for GHG accounting on different planning policy options and for economic tools.The 'renewable energy grid system' and best management practices (BMP) that Gwangju is carrying out will become model cases that are also useful in an economical way.The carbon banking system implemented in Gwangju is successfully operated due to active participation of involved actors, in particular, participating citizens.
67 67 | 71This system was introduced at 2011 UEA Gwangju Summit and 2013 UEA San Antonio Summit. Many city representatives attending these Summits showed interest in the system and have requested Gwangju to disseminate it to their cities.Therefore, it is expected that the carbon banking system, which is considered as a successful model case of the Korean green growth policy, shall be disseminated in order to contribute to the green economic development in the global society.The Gwangju 100% renewable solutions makes clear that it is indeed economically and technically viable to choose renewable energy system.
68 68 | 717.2 SuggestionsThrough outreach programs, Gwangju and UEA are making efforts to contribute to the international community by sharing accumulated programs, technologies and experiences with cities wanting to be low-carbon green cities.Gwangju and UEA are making endeavours to create a carbon-free city, and want to have UNEP, UNFCCC, the World Bank, and other related international organizations join these efforts. In particular, as a part of common duties for the GHG emissions reductions at developing country cities, not only approaches including CDM and NAMAs but also opportunities for those cities to be funded by funding agencies need to be sought. Possible funding agencies could include USAID, KGGTF, GCF, and so forth. As a part of this effort, the next chapter suggests a proposal for a model of new carbon finance.
69 Ⅷ Proposal on a New Initiative for Implementation of The Urban CDM 69 | 71Ⅷ Proposal on a New Initiative for Implementation of The Urban CDM - Development of a Compensation Model for Carbon Financing1. ObjectiveTo develop and disseminate an easy, practical, simple Compensation Model that can be implemented in line with existing CDMs, NAMAs, and Other Carbon Financing systems.To develop a Compensation Model in a format of Public-Private Partnership(PPP), and of the 3rd sector: participation from central government, local government, and commercial banks are required.2. Possible Framework for the Compensation Model : Refinement of Gwangju's Carbon Banking Operating System(Figure 7)(to be Developed)3. Potential Partners : UEA, UNFCCC, UNEP, World bank, and varies fund agency
70 5. Formation of Compensation Model Task Force 70 | 714. Source of FinanceE.g.)The Korea Green Growth Trust Fund(KGGTF), World Bank- 1st year : USD 6,900,000 for 24 projects- 2nd year : USD 10,000,000 for projects to be invitedOther : GCF- Development of business model in progress5. Formation of Compensation Model Task ForceTo prepare a concept note and the proposal on the development of a compensation model for carbon financingTo submit them to the possible funding agencies in due course
71 Fig. 7 The Operating System of the Carbon Banking System 71 | 71Fig. 7 The Operating System of the Carbon Banking System
72 Thank you very much for your Attention. <Contact>Kim, Kwi-gon(Secretary General, UEA), Ph.D.(University of London) :OH, Byoungchull(Senior Researcher, UEA), Ph.D.(The University of Tokyo) :
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