Making Carbon Finance Work for

City Development

Carbon Finance Workshop

Quezon City, Sept 28, 2009
Konrad von Ritter,World Bank Institute
 Greenhouse Gas Emissions of Cities
Preliminary Data (t CO2 per capita)

Source:compiled by World Bank Staff from multiple sources

comparability of data still under review. Contact Dan Hoornweg (dhoornweg@worldbank.org)
 Cities and Climate Change
• Over 5 billion likely to live in cities by 2030 contributing over 80% of
GHG emissions
• Rapid urban growth renders cities a key for climate action
• Cities are an indispensable key actor to move
towards low carbon growth.
• Cities face multiple development challenges to serve their inhabitants
• Climate Change is a Development Challenge: needs
to be addressed through the lens of Sustainable
Urban Development
• Sustainable Urban Development often linked to Low Carbon Growth
• Great Opportunities for Co-benefits: reducing GHG
and promoting City Development
 Potential Sectors with Co-Benefits

Wastewater Solid Waste

Cities
Public Transport Buildings

Metered Services
Street Lighting
 Urban Mitigation Opportunities
Urban Water Supply & Sewerage
Typical Components
Water supply, storage and treatment facilities
Secondary and tertiary distribution networks
Loss reduction
Sewage collection, treatment and outfall
facilities
Water supply and sewerage connections
Water pressure and quality monitoring
systems
Urban Solid Waste Management
Typical Components
Establishing & managing sanitary landfills
Establishing and operating municipal waste
collection and recycling schemes
Encouraging proper waste disposal practices
Regulating uncontrolled & informal disposal
operation
Source: Dan Hoornweg, WB
Opportunities
Energy efficiency in water & wastewater
pumping
Managing GHG emissions from secondary &
tertiary treatment
Sludge disposal techniques
Reducing water supply variability & losses from
CC
Integrated energy-water management
Opportunities
Collection & utilization of landfill gas
Energy-efficient solid waste collection
Waste stream separation & materials recovery
Local, city-wide, regional recycling schemes
Composting
Urban Mitigation Opportunities (contd.)
Urban Transport
Typical Components Opportunities

Highway Construction Improved Urban Planning

Urban Bus Fleets
Improved Pedestrian Access
Signage, Crossings, Traffic Safety
Mass Transit Systems
Modal Integration
Energy: Energy Efficiency and Renewable Energy
Typical Components
Building: Retrofitting and construction of
public buildings for energy efficiency
Efficient Steet lighting
Energy efficiency in Residential Sector
Renewable Energy
Bus Rapid Transit
Vehicle fleet renewal with high-efficiency
clean vehicles
Fiscal & tax regimes, including congestion
charges & engine capacity taxes
Non-Motorized transport
Opportunities
City Planning and Use of sustainable
building materials and products
Change building codes
Government procurement of energy-efficient
goods & services
Energy Efficient Streetlighting
Financing Low Carbon Development
in Cities – the CDM Option

Developing Country
Industrialized
Funding
Country
Technology
Projects to reduce GHG
emissions

Emission reduction compared

to an existing baseline
Certified Emission
Reduction (CER)
 CDM for Urban Development -
already a reality in Quezon City:
• Payatas Landfill: First registered CDM Biogas emission reduction
project in solid waste management in the Philippines.

• Quezon City: agreement with PANGEA Green Energy (Feb 14, 2007,
for the development and implementation of Payatas Landfill Gas
Capture
Biogas Emissions Reduction Project
Updates

***30,860 CERs for the 1st Monitoring Period (01 March to 31 August 2008) were
issued on June 25, 2009
***2nd Verification to be conducted in September 2009 to cover 01 September
2008 to 30 June 2009 GHG avoidance

Carbon Finance & PoA for City Administration:

The Quezon City Experience
Potential Role of Carbon Finance

for Cities
• A market-based tool that can:
– catalyze climate mitigation action;
– promote clean technologies
– Strengthen city level institutions

• CDM can generate additional revenues for

priority urban investment programs (in
non-Annex 1 Countries)
 Constraints Limiting Access
by Cities to Carbon Finance
• Project by Project approach – high transaction costs
• Few approved methodologies in high priority urban
sectors – e.g. transport
• Regulations limiting cities’ ability to enter into long-term
CDM project contracts
• Weak institutional capacity at city level to:
– undertake CDM projects
– Integrate CDM into priority city development programs
– design policies and measures to encourage CDM activities

 New Opportunity: CDM Program of Activities

Will require Building Institutional Capacity
 Capacity Development: Key Drivers

Capacity and Knowledge

• Carbon Finance
• Policy Measures
• Low Carbon Growth

Emerging Climate Cities Development:

Financing Shift towards Low
Instruments Carbon Paths: QC –
- CTF Mission in UNFCCC Evolving SWM, EE (Building,
PHL: Scope for Regime Post-Kyoto: Street lighting, others)
Urban How large the Carbon
Component? Market? Programatic?
 Carbon Finance Assist –
Cities and Climate Change Program
World Bank Institute Climate Change Practice’s
Carbon Finance Assist (CFA) Program helps Cities
‘harvest their carbon assets’ to mobilize Carbon Finance
for Urban Development through:
Knowledge Sharing
– Carbon Expo – Urban Stream with ICLEI, UCLG
– Symposium on Cities and Climate Finance, Barcelona, May ’09
– City Twinning for Carbon Finance
Learning Programs
– Multi-module learning program (under development)
– Carbon Finance CB in Emerging Mega Cities: Joint
C40 – CFA – Switzerland initiative in 5-6 select mega cities
Customized Hands-on Support to Select Cities
– Quezon City: Today’s workshop…
 Guiding Questions for Today

Identify:

• Urban Climate Mititgation Opportunities:

– What are the highest priority Urban Sectors with Strong
Carbon (Emission Reduction) Potential?
• Carbon Finance Potential (CDM)
– What are Baseline, Emission Reductions, Additionality to
estimate Carbon Finance Potential?
• Institutional Arrangements
– Who is Qualified to Act as Coordinating Entity (CE) for
Program of Activities (PoA): Private, Public, etc.?
• Financing Options
– How will the underlying program/project be financed?
– How will the CDM program/project preparation be financed?
 Starting Point for QC

• Urban Climate Mititgation Opportunities:

– What are the highest priority Urban Sectors with Strong
Carbon (Emission Reduction) Potential?
– Solid Waste, Energy Efficiency (Building, Street Lighting)
• Carbon Finance Potential (CDM)
– What are Baseline, Emission Reductions, Additionality to
estimate Carbon Finance Potential?
– To be done! Learn from existing PoAs, UNFCCC Guidelines.
• Institutional Arrangements
– Who is Qualified to Act as Coordinating Entity (CE) for
Program of Activities (PoA): Private, Public, etc.?
– To be explored. Learn from Pangea Green Energy
• Financing Options
– How will the underlying program/project be financed?
– How will the CDM program/project preparation be financed?
– To be explored. Using experience from WB and QC projects.