Programme of Activities for Cities and suitability of current
framework and rules
PRESENTATION AT UNFCCC POA WORKSHOP MAY 2011
BY
FELICITY SPORS (FSPORS@WORLDBANK.ORG) & MONALI RANADE (MRANADE@WORLDBANK.ORG)
THE WORLD BANK CARBON FINANCE UNIT
Contents
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Why do we need a city-wide PoA ?
How does a city-wide PoA work in practice?
Regulations needed to support city-wide PoAs.
PoA regulatory barriers also impact city-wide PoAs.
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“Globally, cities emit up to 70% of all GHGs but occupy
only 2% of the world’s land” Source: UN Habitat
Transport
Transportation
of Waste
Traffic
management
systems
Waste
Biogas-toenergy
Energy
Pedestrian
comfort
Heat
island effect
Urban
Forestry
Sludge
treatment
Efficient
water
pumping
Water
Grey water
reuse
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Sources of emissions:
1. Transport
2. Solid waste
3. Water
4. Energy usage
Emission sink:
Urban forestry
Current options for cities to access carbon finance*
* Under CDM
City A
Waste
Transport
Option 1: Stand-alone
project in one large
city (e.g., LFG project
in City A)
water
Waste
City B
Transport
water
City C
Waste
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Transport
Option 2: Bundle of
two or more projects
in one city or across
multiple cities (e.g.,
EE in water pumping
in City B and City C)
Options 3: PoA
across many cities
(e.g., Transport CPAs
in City A, B and C )
Key challenges for cities accessing current CDM
• Small individual projects - Average size of stand alone medium
sized projects in cities result in approx. 5000 CERs/yr.
• Bundling or PoAs across cities is administratively complex Repeated clearances from the same city council for different
projects created problems.
• Lack of support for strategic planning by the city – City
authorities are not encouraged by current CDM to take a holistic
view of their city.
• Direct benefits of city participation are hard to quantify – The
direct local benefits CDM projects may be difficult to quantify,
making it difficult for city authorities to justify expenditures on
these projects
Solution proposed – city wide PoAs: The idea is to better align CDM project
planning with normal urban planning and management processes, which are
focused on provision of urban services. E.g. Eco-city Tianjin, Amman city PoA.
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Structure of city-wide PoAs
PoA Coordinator
(CME)
Municipal
Departments
(Sector)
Example of Projects
(CPA)
Water supply
Energy
Street-light efficiency
Composting
Mayor /
City Manager
Waste
Landfill Gas
Public transport
Transport
Low-carbon vehicles
Urban Forestry
Management, Implementation, monitoring & reporting
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Parks
Implementation over time
Water
Sectoral scope included in city-wide PoA
Sectoral Scope
Examples of project activities (CPA)
Methodology
1. Energy industries
(RE / non-renewable)
Solar water heaters
Wind power
AMS I.C
ACM0002
2. Energy distribution
3. Energy demand
Loss reduction
CFL
Street-lighting, water pumping
Building energy efficiency
Recycling of building material
Bus Rapid Transit
Retrofit
Electric vehicles and
fuel-switching
Landfill gas
AMS II.A
AMS II.J
AMS II.C or AMS II.L
AMS II.E or AMS III.A.E.
When available
AM0031 or ACM0016
AMS III.AA
AMS III.C,
AMS III.S
ACM0001, AMS III.G
Municipal waste management, incl.
recycling and waste water treatment
AMS type III methodologies
Creation of green areas, in and around the
city
Manure management system
AR-AMS0002
6. Construction
7. Transport
13. Waste handling and
disposal
14. Afforestation and
reforestation
15. Agriculture
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AMS III.D or ACM0010
Environmental integrity of city-wide PoAs
• Clear attribution of emissions: Emission Reductions can be traced to the
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exact and unique technology/measure implemented by each CPA
Transparency and conservativeness: Calculation of ERs using
approved (large/small/consolidated) methodology
Baseline Scenario: Identified for each CPA
Additionality: Established for the entire PoA (as financing guidelines for
the PoA) or for each CPA (as IRR or EIRR benchmark)
Monitoring: Integrated with the existing administrative system and
undertaken for each CPA as per the approved methodology
• Avoidance of double-accounting: Ensured by maintaining central
database of unique combinations of location and technology for individual
CPAs, within the geographical boundary of the municipality.
• De-bundling: PoA will be a large-scale activity, though depending on
project size and availability of methodology, appropriate methodology
(large/small/consolidated) will be used for each CPA
Contd.
Decision of CMP6, December 2010 regarding the citywide programmes
Paragraph 4(b) of the CMP.6 decision:
“Requests the Executive Board to reassess its existing
regulations related to programmes of activities in order
to: [] (b). simplify the application of programmes of
activities to activities applying multiple methods and
technologies, including for possible city-wide
programmes, while ensuring environmental integrity to
the extent required by the Kyoto Protocol and decisions
of the Conference of the Parties serving as the meeting
of the Parties to the Kyoto Protocol”
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Rules required to allow city wide PoA
• Allow use of multiple methodologies under a PoA
• Modify the PoA-DD format and remove requirement for generic
CPA-DD
• To begin with, use of multiple methodologies can be restricted to
PoAs that
– Are implemented by a legally distinct entity (e.g., a municipal authority)
– Use approved CDM methodologies
– Allow for unique identification of each project activity (technology,
location)
– Develop a centralized database system to avoid double-counting
– Each CPA has distinct and clear linkage with the municipal authority, i.e.,
the project is implemented by
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the municipal authority directly (e.g., Bus Rapid Transit system) or
through a sub-contractor (e.g., solar water heater for households) or
by a private investor (e.g., wastewater treatment for the city)
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General challenges with PoA
These are common to all PoAs and therefore will also affect the City-wide PoA.
• Lack of appropriate methodologies for some sectors – energy
efficiency in buildings, transportation, etc.
• Liability for DOEs – erroneous inclusion issue needs to be
addressed.
• No clear guidance on impact of mandatory law on baseline
emissions. i.e. how to treat a program that is helping to achieve
the greater compliance of the mandatory law should be treated
especially for calculating the baseline emissions.
• Addressing uncertainty to ensure integrity of CERs - Need for
greater clarity on sampling and appropriate discounts in the light
of uncertainty to increase.
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Thanks for listening
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Carbon
markets
Climate
finance
National/local
government
Transportation of
Waste
Transport
Traffic mgt
City-wide
program
Bi-lateral
agencies
Waste
Biogas-toenergy
Sludge
treatment
Energy
Pedestrian
comfort
Efficient
water
pumping
Heat
island effect
Private
investors
Urban Forestry
Water
1. Define structure
2. Define boundary
3. Prepare inventory
4. Identify agencies
5. Define incentives
6. Identify activities
7. Establish database
8. Implement activities
9. Quantify GHG ER
10. Validate/verify
Grey water
reuse
Air
quality
Pollution
reduction
Local
jobs
Quality
of life
Energy
saving
GHG
mitigation
How to validate and verify city-wide PoA
Validation of PoA and 1st CPA
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CME prepares PoA-DD and 1st CPA-DD
DOE team with PoA experience and sectoral scope of 1st CPA
DOE validates the CME structure and central database. The DOE also validates all
other PoA requirements, eligibility, additionality, stakeholder consultation,
Environmental Assessment, etc.
Inclusion of CPA in registered PoA
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CME prepares CPA-DD(s)
DOE team with sectoral scope of the relevant CPA (2nd, 3rd,…, nth)
Site-visit, if required
Verification
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CME prepares monitoring report
DOE with sectoral scope of the CPA(s) to be verified
Site-visits, as required, verification of database and CDM requirements
Amman
Green
Growth
Program
A – GAM
implemented
activities
B – Activities within
GAM boundary,
implemented by other
public or private
sector agencies (e.g.,
BRT)
A
B
C – GAM supported
activities, outside
GAM area
(e.g., wind farm)
C
• Insufficient meths
• Leakage calculations are
costly and unnecessary
• Monitoring too frequent
makes too expensive .
• Additionality test –
common practice
currently excludes many
countries. Definition of
CP based on number of
cities with transport
systems.
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EE Housing
Transport
Examples of sector specific regulatory challenges for
transport and housing in city wide PoA.
• Insufficient meths.
• How to apply computer
simulation for
determining energy
savings in CDM.
• How to address retrofit
where multiple fuels are
displaced for thermal
energy.
• How to address
suppressed demand?