Transport and Carbon Finance Part I
Dr. Jürg M. Grütter
jgruetter@gmail.com
www.transport-ghg.com
matching transport with carbon finance
Company Background
 Methodology development CDM: AM0031, ACM0016
(both NMs), AMS IIIT, AMS IIIU
 Methodology development non-CDM: VCS bike, VCS
freight, BC freight, various Switzerland
 Under preparation: Rail passenger, Eco-Drive
 Projects CDM
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4 registered (2 BRTs, cable car, plant-oil)
2 in registration (BRT, Metro)
14 in validation (4 electric vehicles, 1 metro, 9 BRTs)
4 enter validation next 1-2 months (3 metros/LRT, freight)
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1 registered VCS (gaseous HDVs)
2 VCS in validation (1 BRT, 1 metro)
1 BC validation (freight)
>80 registered in Switzerland
 Projects non CDM:
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Current Carbon Finance
Transport Projects of grütter consulting
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Problem Areas
 Methodologies
 Validators
 Additionality procedure
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Methodologies
 See discussion per methodology
 In general very high complexity
 In general far more is demanded
in the transport sector than in
other sectors
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Validation
 Problems:
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Most accredited DOEs for sectoral scope 7 lack
competence and experience
DOEs use staff which compare transport projects to
hydro dams
DOEs are afraid of UNFCCC
DOEs charge for transport project 2-3x more than for
other projects
DOEs take 1-3 years for validation
 Proposed Solutions:
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Feb 11
Suspend incompetent DOEs
Automatically suspend DOEs which take more than 1
year for validation
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Additionality I
 Overarching Problem: Additionality has been reduced
by the EB to IRR assessment
 The reduction of project additionallity to one financial
parameter is not only questionable per se but reduces
effectively the participation of project types where the
barriers are far more complex
 Food for thought: Using a marginal cost approach like
GEF not one HFC and most N2O projects after 6
months are no longer additional i.e. > 50% of CERs
issued by EB are NON-additional using a slightly
different concept
 Conclusion: There is no single and objective criteria
for additionality. Therefore keep in mind CO2 plus
sustainable development is important and
environmental additionality should get back its role
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Additionality II
 If the UNFCCC wants transport to play a role
additionality rules for transport must be
adapted
 UNFCCC has shown it is flexible with small
scale projects or LLDCs
 The sustainable development benefits of
transport should be recognized. This justifies
simplified additionality procedures
 Simplified additionality proof is suggested for
urban public transit and GHG efficient
vehicles e.g.:
 Based on common practice
 Based on benchmark
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AM0031: BRTs in CDM
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Problem Areas: Summary
 Leakage calculations:
 Costly and not necessary
 Monitoring survey:
 Costly and could be made less frequent
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Leakage Load Factor
 Situation today: every 3 years
occupation rate measurements
 Problem:
 Cost for surveys around 30,000 USD
every 3 years
 Analysis:
 Theoretically impact on load factor highly
improbable due to market forces
 Empirically no impact on load factor has
been registered
 Solution: Eliminate this leakage from
methodology
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Leakage Load Factor Empirical
City
Bogota
Seoul
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Occupation rate Occupation Occupation rate Occupation rate
taxis prior
rate taxis after
buses prior
buses after
project
project
project
project
0.7 to 0.8
0.9
1.3-1.5
1.4
56% to 66%
61%
12.1 passengers 13.5 passengers
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Leakage Congestion
 Situation today: leakage determined ex-ante
 Problem:
 Cost for surveys around 20,000 USD
 Data analysis is complex and involves another cost
 Analysis:
 Speed and congestion impact cancel each other
out
 Methodologies from other sectors do NOT include
rebound effect
 Total impact marginal
 Empirically clear that overall impact negative
leakage i.e. elimination is conservative
 Solution: Eliminate this leakage from
methodology
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Congestion Impact Empirically
Project
Meth
Rebound
tCO2/a
Speed
tCO2/a
Total congestion
impact tCO2/a
ER per
annum
Bogota
AM0031
9,000
-15,000
-6,000
247,000
Cali
AM0031
11,000
-23,000
-12,000
258,000
Pereira
AM0031
2,000
-1,000
1,000
35,000
Barranquilla
AM0031
1,000
-2,000
-1,000
55,000
Medellin
AM0031
0
-4,000
-3,000
194,000
Guatemala
AM0031
-3,000
-95,000
-97,000
534,000
Guadalajara
AM0031
1,000
0
1,000
51,000
Quito
AM0031
1,000
-19,000
-19,000
155,000
Chongqing
AM0031
-2,000
0
-2,000
218,000
Zhengzhou
AM0031
-8,000
0
-8,000
205,000
Joburg
AM0031
-1,000
0
-1,000
35,000
Seoul
ACM0016
0
0
0
>200,000
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Monitoring Survey
 Situation today: 6 surveys per annum
 Problem:
 Cost for surveys around 60,000 USD per annum
 Analysis:
 Trip behaviour does not change dramatically in the
short period
 Over time more people have access to private cars
and use these thus conservative to take past
surveys
 Empirically results show little short term change
 Solution: Conduct surveys only every 3 years
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Monitoring Survey Empirical
Item
Baseline
Year 1
Year 2
Year 3
Bogota trip distance car
9.0
10.7
11.5
11.9
14.2
12.3
Bogota trip distance taxis
7.0
9.7
9.3
11.1
11.8
10.8
Chongqing trip distance car
8.8
9.0
10.5
NA
NA
NA
Chongqing trip distance taxi
7.3
7.5
9.4
NA
NA
NA
Item
Year 4 Year 5
Year 1
Year 2
Year 3
Year 4
Year 5
Bogota mode share buses
89%
90%
91%
92%
92%
Bogota mode share taxis + cars
10%
8%
8%
7%
8%
Chongqing mode share buses
61%
57%
NA
NA
NA
Chongqing mode share taxis + cars
37%
35%
NA
NA
NA
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ACM0016: MRTS
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Problem Areas: Summary
 Leakage load factor and congestion:
 Costly and not necessary: idem to AM0031
 Monitoring survey:
 Costly and could be made less frequent
 Additionallity:
 Common practice is a killer
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Monitoring Survey
 Situation today: 1 large and 1 re-test survey
per annum
 Problem:
 Cost for surveys around 150,000 USD per annum
 Analysis:
 Trip behaviour does not change dramatically in the
short period
 Over time more people have access to private cars
and use these thus conservative to take past
surveys
 Empirically results show little short term change
 Solution: Conduct surveys only every 3 years
or once per crediting period
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Common Practice I
 Situation today:
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less than 50% of cities > 1 million (or 0.5-1 mio)
LUZ definition
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Most countries in the world only have 1 city of this size.
If this 1 city established 50 years ago a tram line
covering 1% of transit trips in the city no MRTS project
is additional due to common practice
Common practice procedure is ONLY adequate for
countries like China and India
This sole factor has excluded dozens of projects in many
Latin American, Asian and African countries
LUZ is unclear and a concept not used outside selected
EU countries
Comparison criteria is number of cities instead of asking
how are urban trips made
 Problem:
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Common Practice II
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Solution: Common practice should indicate if something is
widely and commonly used. Not the amount of cities is
relevant but the share of MRTS in trips in the project city.
Comparison criteria: How are trips commonly made in the
project city over time and what are the dynamics
Criteria Proposal:
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Share of public transit in motorized trips
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Share of MRTS in motorized trips
Justification: if public transit looses ground then private transit is increasingly
getting common practice
Justification: The role of MRTS in the respective city in motorized trips is
considered
A project is common practice:
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If the share of public transit trips over total motorized trips shows an
increasing trend over the last 10 years
and
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If MRTS in the city have more than 50% of motorized transit trips in the
project city
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Further Information
CEO grütter consulting:
Dr. Jürg M. Grütter
jgruetter@gmail.com
www.transport-ghg.com
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