Climate change mitigation in Cities: A city-wide approach to carbon

finance

Monali RanadeCarbon Finance Unit, The World Bank

Carbon Expo, CologneMay 27, 2010

Why Cities and Carbon Finance?

Fastest growing source of greenhouse gas (GHG) emissions

High level of economic growth with very large population inflow

Continuous challenge to balance development and environmental needs

Inadequate level of engagement in CDM Potential for carbon finance to facilitate

low-GHG development in cities

GHG emissions in Cities

Transportation of Waste

WasteTransport

Urban Forestry

Water

Grey water reuse

Sludge treatmentPedestrian comfort

Energy

Traffic management systems

Biogas-to-energy

Efficient water pumping

Heat island effect

Sources of emissions:1. Transport2. Solid Waste3. Water 4. Energy usage

Emission sink:Urban Forestry

Mathematically, it should be possible for a city to be carbon neutral by creating sufficient green areas

Single ProjectBundle of Projects

Program (PoA)

Single location Many locationsMany locations, across countries

Single project owner(e.g., 1 hydro plant)

Many project owners(e.g., 10 hydro plant)

Many project owners

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 program

A single crediting period (e.g., 7/10years)

Single crediting period for all activities (7/10 years)

Each project has own crediting period

Project owner is known

All project owners are known

At least one project is known, rest included as they join

Types of CDM Projects

City A

City B

City C

Waste

Waste

Waste

Transport

Transport

Transportwater Options 2:

PoA across many cities (e.g., Transport)

Option 1: Stand-alone project in one large city (e.g., LFG project)

Option 3: Bundled project in two or more cities (e.g., EE in water pumping)

water

Options for cities to access carbon finance*

* Under CDM

PoAImplements any policy/measure or stated goal

CPA1

CPA2

CPA3

CPA..n

CPA4

AchieveGHG reductions

or removals by sinks

One Programme of Activities (PoA) & Many CDM Project Activities (CPAs) :One coordinating agency and type of intervention

C.Figueres & M.Philips, 2007

How does programmatic CDM work

TransportCPA 1 CPA 2..

Energy CPA 5 CPA 6..

WasteCPA 3 CPA 4..

WaterCPA 7 CPA 8..

Urban ForestryCPA 9, CPA 10

City-wide approach to carbon finance*Enabling cities to improve urban services while reducing GHG emissions

Characteristics of an urban program

a. City Authority responsible for • Aggregation of GHG

reductions

• Implementation

• Monitoring and verification

b. Baseline includes the urban area, current and projected growth

c. Technology and policy interventions identified in each sector

d. Strengthens on-going programs

e. Implementation through public-private partnerships, sub-contracts, ESCOs, etc

* This approach will be submitted to the CDM EB in June 2010

Mayor / City ManagerWaterWater supply

EnergyStreet-light efficiency

WasteCompostingLandfill GasTransport

Public transportLow-carbon vehicles

Urban ForestryParks

Program Coordinator

Municipal Departments

Example of Projects

Structuring a city’s carbon program

Creating city-wide programs

1 • Establish a coordination office for the program

2• Establish the geographical and sector

boundary for the program

3• Create an inventory of GHG emissions in the

boundary

4 • Identify responsible departments and agencies

5• Create appropriate incentives for relevant

stakeholders

6• Identify interventions and establish program

eligibility

7• Establish system for documentation and

quality control

8 • Implement and monitor the interventions

9

10

• Quantify emission reductions: measure or estimate

• Validate or verify ER benefit

BaselineEnergy + Waste + Transport sectors

Buildings EEComposting New Public transport

Street-lights

Business As Usual

GHG Emissions

GHG Emissions

with city’s carbon

program

Un

it T

on

s o

f C

O2e

(C

um

ula

tive

)

Assumptions:• 10% Annual growth of emissions in the Business As Usual (BAU) scenario• Project and policy interventions included for each sector• Implementation start date and length varies for project interventions in the 10 year period• Emissions and emission reductions are cumulative

Illustration of GHG mitigation impact

Year 1

10

GHG Emission Reductions

For more information

Visit: http://carbonfinance.org

(mranade@worldbank.org)