Urban Development and Climate Change

Rutu Dave, Climate Change Specialist The World Bank South Asia Urbanization Knowledge Platform, March 2012

Cities contribution to climate change will grow

NOW Cities have large impact on climate change
67% of world's energy supply

70% global GHG emissions

2050

Impact grows as urban population doubles

Source: Cities and Climate Change: An Urgent Agenda - The World Bank

Cities are vulnerable to climate change impact

Floods
70% largest cities vulnerable to rising sea levels 360 million urban residents vulnerable to flooding 70,000 deaths in Europe from severe heat wave in 2003 Vulnerability to disruption of Source: Cities and Climate Change: An Urgent Agenda, - The World Bank Global Urban Observatory - UN-HABITAT food supplies The Impact of Delhis CNG Program on Air Quality - Resources
for the Future

Droughts

Pollution

Many cities have higher emissions than allowed by WHO 1 in every 10 school children in New Delhi has asthma

Climate-smart planning helps city development

Alternative 1 Capital-Intensive High costs of heating and cooling inefficient buildings Investment in road network capacity to relieve traffic congestion Health care costs for pollution-related illnesses Alternative Alternative 2 Paradigm Shift 2 Lower energy costs from energy efficiency programs Improved air quality for residents Public transportation systems and increased walkability Greater attraction for human capital and private investments Larger potential for growth

Cities lock-in form they grow into

Infrastructure created today will have 50-60 year life span

Paradigm change requires special attention in planning, incentives, education

BUT: cities in 2060 and beyond will have very different needs than today!

Carbon finance as icing on the cake for development

Opportunity Challenge Green infrastructure projects have attractive repayment periods BUT development planning needs financing for up-front investment Access to funds through tools such as CIF and SREP Solution Bonus icing Carbon finance speeds up repayment period Win-win situation Cost savings Revenue from CERs Growth External benefits
Public

Private

Examples of successful climate-smart city programs

Case study: Transport - Guangzhou, China Bus Rapid Transit system Capital costs repaid through operating savings, CERs, and economic benefits Eliminated traffic gridlock Public opinion improved

Source: Guangzhou, China Bus Rapid Transit - Emissions Impact Analysis - Institute for Transportation and Development Policy

Case study: Energy Efficiency in Paris & Bangkok

World Bank sponsored study on energy efficiency Lessons learned from Paris applied to Bangkok Metropolitan Authority climate plan Climate plan was incorporated into Clean Technology Fund application
Source: Twinning Cities Project: Paris and Bangkok - The World Bank Institute

Examples of successful climate-smart city programs

Case Study: Waste Lahore, Pakistan Common practice is open dumping of waste Up to 50% of waste is compostable IRR of 21.2% with CERs Reduces methane emissions and need for incinerators and landfills Creates agricultural product
Sources: Good Practices in City Energy Efficiency: Lahore, Pakistan ESMAP Environmentally and Economically Sustainable Urban Development ESMAP

Centralized vs. Distributed Generation Case Study: Solar Systems Rizhao, China 99% of households have solar heaters Solar heaters cost less than running conventional electric heaters, saving funds Traffic signals and public lighting powered by solar panels

WBICC programs help cities with smart development

Objective of World Bank Institute Climate Change Practice: help cities integrate low carbon and climate finance into development planning via integrated programs

CFCB
Carbon Finance Capacity Building 3 year relationship through city task team Technical assistance through workshops Feasibility study and project identification Advice on project development

E-learning
E-Institute for Development

City-Wide
City-Wide Approach to Carbon Finance

Online courses for practitioners Methodology aggregates Cities & Climate Change GHG mitigation reductions Procurement of Energy Gives cities greater Efficiency Services flexibility through holistic Tapping Carbon Markets approach and Energy Efficiency Covers 5 sectors Projects in Public Buildings

Carbon Finance Capacity Building in 4 Megacities

Quezon City, The Philippines Energy efficient street lighting Sao Paulo, Brazil Favela waste management program Pilot project started Programme of Activities (PoA) Idea Note completed

Jakarta, Indonesia Dar es Salaam, Tanzania Solid waste management program Project Idea Note (PIN) completed Urban greening program Project Idea Note (PIN) completed after feasibility study

So Paulo: PoA on waste managament in favelas

Problem 15tons of garbage daily: 59% from households Organic material is 60% Only 1% of waste recycled Environmental problems from building rubble dumped illegally Landfills at capacity Methane emissions Outcomes

Solution Engage community via campaign Focus on waste separation Treat organic waste on site through composting plant Collect methane and burn for electricity

26 million from CER auction

370,000 MWh clean electricity / year

GHG reduction by 20%.

Investment in better housing for favela residents
Source: Sao Paulo Project Report The World Bank Institute

Quezon City: Energy efficient street lighting

Problem City covers expanse of Metro Manila and is most populated in Philippines Street lighting is 64.8% of City governments total electricity costs Need scalable model for other Philippine cities with high energy costs Solution Street Lighting Taskforce coordinates efficient lighting implementation Deploy Light Emitting Diode (LED) energy efficient lights, easily controlled and dimmed Outcomes $51M investment has $4.5M annual savings and $.7M income from CER auction payback period reduced 21,700 MWh saved per year 10,700 tCO2e per year saved Reduction of city costs, improved visibility, and additional funds for poverty prevention
Source: Quezon City Project Idea Note The World Bank Institute

Dar es Salaam: Waste management program

Problem 5,000 tons of waste per day by 2015 Up to 81% of solid waste is organic Waste is central problem: rots in streets and landfill. generating methane Lack of infrastructure Poor hygienic condition of urban poor Difficulty with procuring investment Solution Waste management is lowest-hanging fruit in carbon finance Investment in waste stations & trucks Landfill gas capture system and flaring Community involvement in educational campaign
$140 $120 $100 $80 $60 $40

$20
$-

Total investment (CapEx + OpEx)

CER revenue (2014-2035)

Outcomes

$51M investment with $115M revenue from CERs over 21 years

Captured biogas can generate 3500 MWh per year 7M tCO2-e over life of project Improved hygiene conditions, community involvement in project
Source: Dar es Salaam Project Idea Note The World Bank Institute

Jakarta: Ambitious Urban greening project

Problem Land overcrowding, pollution of air and water supply Green open space (GOS) at 11% but 30% needed for quality of life Budget for green space is not sufficient to scale Solution Establish green areas Regulation for buildings and industrial parks to include 30% green space Greening links adaptation and mitigation approaches Immediate impact : citizens can observe green space, cleaner air
Wetland Restoration: 1,000 ha

Realized: 8,890 ha

State Land Mgmt: Industrial Park: 835 ha 2,500 ha Buffers Private (railway, buildings: road, 6,000 ha other): 1,000 ha

Total new green space: 1136 ha Target: 30% Green Open Space at 20,225.79 ha

Outcomes Absorb >1M tons tCO2 per year Improved quality of life for residents

Source:DKI Jakarta

Benefits of City-Wide Methodology

Problem Poor access by cities to carbon market mechanisms: Components Focus Scale

climate change action taken at national level

individual city-level GHG emission reduction activities, are not large enough to warrant transaction costs associated with carbon finance limited financial resources channeled to improving access to basic urban services

Priorities
Solution Flexibility Dynamic

Greater flexibility for GHG program covering one, a few, or all sectors, as part of a single comprehensive effort. individual sector departments could propose new interventions over program lifetime
Source: A City-Wide Approach to Carbon Finance The World Bank

City-Wide Approach
Carbon markets Climate finance National/local institutions
Transportation of Waste

Bi-lateral agencies

Private sector

Financing
Waste Biogas-toenergy Sludge treatment Efficient water pumping Water

Transport

Traffic mgt

Sectors

Pedestrian comfort Heat island effect

Energy

Urban Forestry

Grey water reuse

Benefits
Energy saving GHG mitigation

Air quality

Pollution reduction

Local jobs

Quality of life

Source: A City-Wide Approach to Carbon Finance The World Bank

Creating a City-Wide Program

1 2 3 4 5 6 7 8 Establish a coordination office for the program Establish the geographical and sector boundary for the program Create an inventory of GHG emissions in the boundary Identify responsible departments and agencies Create appropriate incentives for relevant stakeholders (good practice) Identify interventions (technology/measure) and establish eligibility Establish system for documentation and quality control Implement and monitor the interventions Quantify emission reductions using established methodology Validate and verify GHG Emission Reduction benefit
Source: A City-Wide Approach to Carbon Finance The World Bank

9
10

City-Wide Approach in Rio de Janiero and Amman

Investments
Waste Transport Energy Urban Forest High potential of GHG savings ~$ 2.8 B over 28 yrs

Policy
Densification principle - Building code - Zoning -Public transport -Rooftops

Rio Financing

Amman

Capacity
Program mgmt. team Donors Contracting Training Data management

SCOPE FLEXIBLE

projects from all relevant urban sectors

1. Max. green funding 2. Leverage private sector investment 3. Ensure long term 4. Cross finance projects

allow for methodologies from different carbon standards

integrates with existing data collection database of all carbon assets; vertical integration to state, national level city sells or retires assets toward target reinvest revenue in low-carbon projects

MRV REGISTRY

SALE SUSTAIN

City-wide link to broader climate change work

City-wide holistic approach

Development goals

Nationally Appropriate Mitigation Actions (NAMAs)

Sector-specific infrastructure needs

Thank You!

Rutu Dave Climate Change Specialist rdave@worldbank.org