Presentation on theme: "A city-wide approach to carbon finance"— Presentation transcript:
1 A city-wide approach to carbon finance Climate change mitigation in Cities:A city-wide approach to carbon financeMonali RanadeCarbon Finance Unit, The World BankCarbon Expo, CologneMay 27, 2010
2 Why Cities and Carbon Finance? Fastest growing source of greenhouse gas (GHG) emissionsHigh level of economic growth with very large population inflowContinuous challenge to balance development and environmental needsInadequate level of engagement in CDMPotential for carbon finance to facilitate low-GHG development in citiesUrban areas are the fastest growing source of global GHG emissionsBy 2030, it is estimated that 80% of global GHG emissions will occur in cities (as per C40).Due to competing socio-economic-political demands on its financial resources, cities require carbon finance to undertake specific GHG mitigation activitiesCarbon Finance transactions require detailed assessment of GHG emission reduction. CDM methodologies of the Kyoto Protocol of the UNFCCC provide such assessment tools.Current CDM methodologies cover a limited number of opportunities to reduce GHG emission within a city. Key areas such as buildings and non-motorized transport are not adequately covered. Moreover, CDM methodologies generally do not address policy and management interventions.Currently, the largest share of city- based GHG projects deal with solid waste management.The World Bank’s Carbon Finance unit is exploring options for developing a new “city-wide” Carbon Finance methodology. The methodology is in the early stages of development and this presentation should be considered work in progress.
3 GHG emissions in Cities Transportation of WasteWasteTransportUrban ForestryWaterGrey water reuseSludge treatmentPedestrian comfortEnergyTraffic management systemsBiogas-to-energyEfficient water pumpingHeat island effectSources of emissions:1. Transport2. Solid Waste3. Water4. Energy usageEmission sink:Urban ForestryCity authorities are responsible for urban services like transport, waste, public buildings, water services and forestry (parks, recreation areas). Authorities also influence the behavior of city residents and visitors by enforcing regulations such as building codes, vehicular emission and specific awareness campaigns. The 4 sources of emissions add carbon dioxide to the atmosphere and the sink takes carbon dioxide from the atmosphere.Mathematically, it should be possible for a city to be carbon neutral by creating sufficient green areas
4 Types of CDM Projects Bundle of Projects Program Single Project (PoA) Single locationMany locationsMany locations, across countriesSingle project owner(e.g., 1 hydro plant)Many project owners(e.g., 10 hydro plant)1 project onlyA number of activities submitted as 1 project(e.g., 10 hydro plants)A number of activities submitted over the duration of a programA single crediting period (e.g., 7/10years)Single crediting period for all activities (7/10 years)Each project has own crediting periodProject owner is knownAll project owners are knownAt least one project is known, rest included as they joinThere are three types of projects under the CDM. A Program is expected to enable replication of the same type of activity. It is unique in the flexibility it provides on ‘when’ and ‘how many’ projects can be implemented under a program.
5 Options for cities to access carbon finance* Option 1: Stand-alone project in one large city (e.g., LFG project)WasteCity ATransportwaterOptions 2:PoA across many cities (e.g., Transport)WasteTransportCity BwaterOption 3: Bundled project in two or more cities (e.g., EE in water pumping)Option 1 is the dominant activity in the CDM. Most solid waste projects fall under this category.Option 2 is the least common at present, but has a strong potential, if a strong central/national-level agency is willing to undertake the PoA.Option 3 is a rarely used, complex option that requires all the cities to be equally developed.City CWasteTransport* Under CDM
6 How does programmatic CDM work One Programme of Activities (PoA) & Many CDM Project Activities (CPAs) :One coordinating agency and type of interventionPoAImplements anypolicy/measureor stated goalCPA..nCPA1CPA2CPA4CPA3AchieveGHG reductionsor removals by sinksC.Figueres & M.Philips, 2007
7 Enabling cities to improve urban services while reducing GHG emissions City-wide approach to carbon finance*Enabling cities to improve urban services while reducing GHG emissionsCharacteristics of an urban programCity Authority responsible forAggregation of GHG reductionsImplementationMonitoring and verificationBaseline includes the urban area, current and projected growthTechnology and policy interventions identified in each sectorStrengthens on-going programsImplementation through public-private partnerships, sub-contracts, ESCOs, etcWaterCPA 7CPA 8..EnergyCPA 5CPA 6..WasteCPA 3CPA 4..TransportCPA 1CPA 2..In this approach, a program for GHG emission reductions is created at the city-level, covering all sectors in a city.Urban ForestryCPA 9, CPA 10* This approach will be submitted to the CDM EB in June 2010
8 Structuring a city’s carbon program Mayor /City ManagerWaterWater supplyEnergyStreet-light efficiencyWasteCompostingLandfill GasTransportPublic transportLow-carbon vehiclesUrban ForestryParksProgram CoordinatorMunicipal DepartmentsExample of ProjectsCities work through an administrative system that involve multiple departments, each providing a specific urban service. Departments work either directly or through a sub-contractor.
9 Creating city-wide programs 1Establish a coordination office for the program2Establish the geographical and sector boundary for the program3Create an inventory of GHG emissions in the boundary4Identify responsible departments and agencies5Create appropriate incentives for relevant stakeholders6Identify interventions and establish program eligibility7Establish system for documentation and quality control8Implement and monitor the interventions9Quantify emission reductions: measure or estimate10Validate or verify ER benefit
10 Illustration of GHG mitigation impact Business As UsualGHG EmissionsGHGEmission ReductionsUnit Tons of CO2e (Cumulative)New Public transportCompostingGHG Emissions with city’s carbon programBuildings EEStreet-lightsBaselineEnergy + Waste + Transport sectorsYear 110Assumptions:10% Annual growth of emissions in the Business As Usual (BAU) scenarioProject and policy interventions included for each sectorImplementation start date and length varies for project interventions in the 10 year periodEmissions and emission reductions are cumulative
11 Visit: http://carbonfinance.org For more informationVisit: