1. Transportation and the CDM: Lessons from Chile John Drexhage, IISD November 29, 2005 Montreal

2. Transport and Climate Change The transport sector is responsible for ~ 25% of CO2 emissions worldwide. This contribution is increasing. The transport sector is responsible for ~ 25% of CO2 emissions worldwide. This contribution is increasing.  Key factors  Travel activity (vehicle kilometers traveled)  Mode split  Vehicle energy intensity  Fuel carbon content

3. In Chile, transportation represents the 2 nd largest source of GHG emissions in the energy sector - approximately 33% In Chile, transportation represents the 2 nd largest source of GHG emissions in the energy sector - approximately 33%

4. Developing World Context Doubling of developing cities urban population by 2030 2 billion new residents X 6 trillion additional vehicle kms/yr = ~600 billion additional liters of gasoline/yr or ~1.9 billion tonnes of GHG yearly, 53% greater than today.

5. Transport & CDM CDM represents a crucial opportunity to develop a sustainable transportation sector e.g. Chile CDM represents a crucial opportunity to develop a sustainable transportation sector e.g. Chile - increased funding flows - enhanced capacity - expanded technology Very few projects to date in transport sector: difficult fit Very few projects to date in transport sector: difficult fit

6. Clean Development Mechanism Goals of the CDM: 1) to assist in the achievement of sustainable development for host countries; and 2) to assist developed countries in complying with their emissions reduction commitments under the Kyoto Protocol.

7. Transport & CDM Project: Chile Project Partners: IISD, CCAP, CC&D, CGTS Funded by Canadian International Development Agency (CIDA) Explore the potential to reduce GHGs and promote transportation CDM projects in Chile Why Chile? - Transport challenges - Commitment to CDM - Strong modeling capacity - Excellent data

8. 1) Bus Technology switch: Switching from diesel to diesel-hybrid electric engines for buses in Santiago 2) Bike Infrastructure: Developing bike lanes, storage, facilities 3) Location Efficiency: Concentrating mixed-use developments around metro stations Three case studies examined

9. Key Findings 1) The CDM should accommodate travel demand reduction efforts as well as policy based and sectoral approaches. 2) The project based framework required by the current CDM rules is limiting and makes quantification complicated 3) Most transportation projects do not fit well within the CDM as it currently functions

10. Key Findings 4) Consideration of emissions reductions should be integrated into long term transportation planning 5) The CDM is only one of many tools to reduce greenhouse gas emissions from the transportation sector

11. Observations/themes from the CDM - Transportation Meeting of Experts Tokyo, Japan, 2003 Implementability (technology solutions) vs GHG reduction effectiveness (land use/public policy/behavioural change solutions) Implementability (technology solutions) vs GHG reduction effectiveness (land use/public policy/behavioural change solutions) De Jure vs De Facto De Jure vs De Facto Data collection is a critical first Data collection is a critical first Standardizing baselines Standardizing baselines Expediting approval procedures for CDM transportation project proposals Expediting approval procedures for CDM transportation project proposals Clean Air and Other co-benefits – traffic alleviation; quality of life Clean Air and Other co-benefits – traffic alleviation; quality of life How to build capacity/knowledge between the CDM and transportation communities about prospective cooperation? How to build capacity/knowledge between the CDM and transportation communities about prospective cooperation? Who owns the credits? Who owns the credits? Role of Unilateral CDM investments? Role of Unilateral CDM investments?

12. The Development Dividend Project All the non-climate-related SD benefits (co- benefits) that might result from a CDM project, whether from investment, tech transfer, new production processes, or new products: All the non-climate-related SD benefits (co- benefits) that might result from a CDM project, whether from investment, tech transfer, new production processes, or new products: Environmental benefits (e.g., better air quality)Environmental benefits (e.g., better air quality) Economic benefits (e.g., increased employment)Economic benefits (e.g., increased employment) Social benefits (e.g., better quality of life via energy)Social benefits (e.g., better quality of life via energy) To be sustainable development, need some element of all three types of benefits. To be sustainable development, need some element of all three types of benefits. The Development Dividend Project aims to help the CDM better deliver these benefits. The Development Dividend Project aims to help the CDM better deliver these benefits.

13. The Development Dividend 30 members from government, multilateral institutions, business/industry and research institutes. Aims to: 30 members from government, multilateral institutions, business/industry and research institutes. Aims to: – identify and assess approaches and strategies for the CDM to support the provision of the Development Dividend. - present findings to negotiators, CDM EB and key stakeholders. - provide a solid foundation for shaping the evolution of the CDM.

14. The Development Dividend Three Upcoming Papers: Three Upcoming Papers: Defining the Development Dividend Changing the Rules for a Development Dividend Financing the Development Dividend

15. Gracias! Final report available at: http://www.iisd.org/climate/south/ctp.asp John Drexhage jdrexhage@iisd.ca Tel: +1-613-238-9820