Energy and environment in the context of urban development ABCDE Tokyo, may 2006

3 Key messages 1.The use of aid is legitimate dealing with energy issues, even in emerging countries 2.Rethinking and redesigning the long term urban planning process in order to reduce future energy demand is essential 3.Donors have to support new modalities of intervention, especially new financial instruments

1. Aid legitimacy A. Understanding elements Paradox : Industrialised countries are the most important energy consumers. But most of energy savings to be done today are concentrated in emerging countries The need for energy efficiency incentives : Energy cost is the main incentive for energy efficiency What mechanisms to maintain energy efficiency efforts in a context of low energy prices ?

1. Aid legitimacy B. Main challenges  Energy resources exhaustion as a geopolitical concern  The increase of the energy bill as an economic concern  Climate global warming as an environmental concern Energy efficiency is therefore a major thematic of sustainable development which comes to be a global concern. This calls on developed countries to react.

2. Implementation challenges Main and more important energy consuming sectors are industries, buildings and transport in developing, the two latter closely related to urban development. A. The context

2. Implementation challenges Energy efficiency efforts in the three sectors :  Industrial sector : efforts in this sector are the most easy to implement (easily quantified)  Transportation sector : efforts mainly concern the development of technology innovation in less energy consuming materials  Building sector : efforts can be made in two areas : -the development of legal and regulatory frameworks in relation with the construction of new buildings -rehabilitation in a sustainable perspective B. What are the existing solutions ?

2. Implementation challenges C. What is there to be done to help developing countries ? Main impact measures Industry- use of the Carbon Fund mechanisms (Clean Development Mechanism of Kyoto – but what to be done afterwards ?) Transport-transfer of technology -new approaches and methodologies in urban planning (e.g Tranus) Buildings- no « one best way » : institutional, operational and financial frameworks should be analyzed to find the best solutions

Densité (Hab/ha) Density (cap/ha ) Source: NEWMAN & KENWORTHY 2. Implementation challenges Urban development and energy consumption

2. Implementation challenges The extreme case showed by Atlanta and Barcelona… What will be the urban development model for developing countries ? The impacts in terms of energy and environment will certainly not be the same. Source : BERTAUD A.

3. The role of donors A.Review aid mechanisms : conception and process of projects  Implicate more developing countries in research programmes in order to find the most suitable solutions for them  Promote projects that focus more on institutional aspects, good governance and capacity building  Use various financial instruments : sovereign and non- sovereign financing, investment funds, guarantees,…  Support private sector investments in energy efficiency projects, including through public-private partnership

3. The role of donors B. Some examples from AFD experience  In Asian emerging economies, China and Thailand, AFD was mandated to focus its action on promotion of energy efficiency and renewable energy.  AFD is funding projects of alternative energy production aiming to provide electricity to urban population : biogas, micro hydro and cogeneration in western part of China.  AFD is developing a research program on financial mechanisms for energy efficiency in the building sector, with a likely collaboration with an Asian research centre.

3. The role of donors C. Some examples from the French Global Environment Facility experience (FGEF)  An energy efficiency programme for low cost housing projects in China :  A programme for the development of an integrated sustainable public transport system for Greater Hanoi : - project to carry out feasibility studies for an integrated public transport system - phase 1 ( ) : 50% annual energy savings were achieved with less than 7% additional investment cost - phase 2 ( ) : rehabilitation, rural housing, sustainable development at the district level

References Giraud P-N., Lefevre B., Les défis énergétiques de la croissance urbaine au Sud. Le couple « Transport – Urbanisme » au cœur des dynamiques urbaines, Paris : CERNA, April 2006 International energy agency 2006 Energy week – World Bank Thomas Heller – Standford University Sustainable cities – Presentation by Canada Industry at CSD 14 – New York May 2006