Financing Sustainable Transport for Green Cities

Lloyd Wright

Manila, Philippines

17 November 2011

ADBs 2020 targets

2000-2009
17% rail 1% urban
Percent of transport-sector loan portfolio

78% road

2020
Roads Rail Water Air Urban

30% urban 42% road 25% rail

Roads

Rail

Water

Air

Urban

Sustainable Transport Initiative 1. Urban transport 2. Transport and climate change 3. Logistics and cross-border transport 4. Road safety and social sustainability

Projects in the ADB pipeline

BRT projects in Dhaka, Jiangxi Jian, Lanzhou, Pimpri-Chinchwad, Ulaanbaatar

Metro rail / LRT projects in Hanoi, Ho Chi Minh, Tbilisi, Astana

Integrated urban transport in Kathmandu, Davao, Vientiane, Xian, Yerevan

Financial realities

$ Trillions
Investment need for a sustainable transport transformation

$ Billions
Development assistance

$ Millions
Carbon finance

Leveraging value for sustainable transport

Fuel Security Credits

Carbon Credits

Health Credits

Road Safety Credits

Funding Sustainable Transport

Land Value Capture

Congestion Pricing

Parking Levies

Fuel Levies

Transport as a percent of projects under climate change mechanisms:

0.1%
To scale up sustainable transport initiatives, carbon markets alone are insufficient

Fuel Security Credits

Energy security as a global concernand an opportunity

Fuel Security Credit concept

Transport and urban planning Heating Industry Power generation

Fuel (and Savings) Environmental Attributes

e.g. Avoided SO2, NOx, GHG emissions NOx/SO2 trading; Carbon Credits

Energy Security Attributes

Reduced reliance on imported oil

Fuel Security Credits

Pilot Fund
Mechanism type: Offset Target fund size: US$ 75 million No. of cities to be awarded: 2 3 cities Start date: Late 2012

Pilot Fund structure

Developing Nation
Low levels of fixed infrastructure Low-cost fuel reductions Investment

Baseline and credit mechanism Management Entity

Developed Nation
High levels of fixed infrastructure High-cost fuel reduction Global fuel price reduction / price volatility reduction

Fuel Security Credits

Investment

Developing-nation City in Asia and the Pacific

Health Credits

Capturing health benefits

Health insurance and auto insurance firms benefit financially from sustainable transport measures that reduce fatalities, injuries, and illness

Value Aspects of Health Credits

Accidents
Injuries Deaths Work day losses Productivity losses Vehicle and property damage

Noise
Illness Productivity losses

Air Contaminants
Asthma Other respiratory disease Respiratory infections Trachea, bronchus, lung cancers Cardiovascular disease Stroke and heart attacks

Lifestyle
Obesity General fitness

Capturing health benefits

Investment firm

Savings from reduced accident payouts and reduced medical payouts

e.g. 50% Investment firm

e.g. 50% Insurance firms

Creating a Sustainable Transport Funding Stream

Mechanism Example of potential income for a large Asian city (US$ / yr) 35 million 100 million 20 million 75 million 50 million 100 million 125 million Total
* Indicative figures only

Carbon credits Fuel Security Credits Health Credits Congestion Charge Parking Levy Land Value Capture Fuel Levy

US$ 500 million

ADB contacts
East Asia Tyrrell Duncan South Asia Teresa Kho Southeast Asia James Lynch Central and West Asia Ramesh Subramaniam Pacific Robert Guild Sustainable Transport Initiative Jamie Leather jleather@adb.org Lloyd Wright lwright@adb.org Ko Sakamoto ksakamoto@adb.org

Thank you
Lwright@adb.org