ISIS Report 14/12/09

Cities and Climate

An International Challenge and Development Perspective

Dr Siegfried Brenke, Team Leader, Strengthening Local Self-government,  German Agency for Technical Co-operation (GTZ), Serbia, tells us how cities can play key roles in climate mitigation and how green financing regenerates investments out of energy savings; he will be speaking at the Copenhagen Climate Summit for Mayors during COP15

What does Copenhagen mean to cities?

Or perhaps the question should be: “What do cities mean to Copenhagen?”

The message from “China to Copenhagen” is that in order to achieve any substantive commitment from the developing countries, the developed countries must accept two conditions.

First, a financial contribution of 0.5 to 1.0 percent of their GDP to support the establishment and maintenance of four different funds: an Adaptation Fund, a Mitigation Fund, a Multilateral Technology Acquisition Fund, and a Capacity Building Fund.  This is a position shared by all developing countries. Connie Hedegaard, the minister for Climate and Energy in Denmark concludes: “No Money, No Deal”.  National governments find themselves in what might be called a “negotiation dilemma”. Nobody wants to lead the way in making a major financial commitment, and take the blame for wasting money.

  Second, the developed countries should sign a binding commitment to reduce their greenhouse gas (GHG) emissions by at least 40 percent below their 1990 level by 2020.  In spite of proactive moves - specifically from the EU – in the direction of such an agreement, any such a commitment seems to be conditional to a joint approach including all major industrialized countries, specifically the USA. Currently, this assumption seems to be unrealistic

The major obstacle in moving central governments towards such far reaching policy change is uncertainty about the consequences in economic and social terms. “No action” still seems to be more easily defensible within the given framework of power structures. Right or wrong, it still seems to be easier to scare people with scenarios of unemployment and decline of industries – as a consequence of mitigation policies – than to attract them with a sustainable model of energy generation and use.

What is missing is the broad recognition of the following realities based on a steadily growing number of striking examples provided by local action worldwide.

· the shift to renewable energies is possible now

· energy efficiency can be dramatically increased and

· meaningful reductions of GHG emissions by local governments yield net social, economic and environmental benefits as well rather than  threatening  the well-being of societies.

These examples of local action are the main reason why the role of local governments is so important for progress. Concrete action can be taken more easily and sometimes only, at the local level. For things to “take place” a place must be available! “Political will” can also be generated more easily at the local level, and while the national legal framework can be more or less supportive, local initiatives are unstoppable, if they are being carried by a broad local consensus. Results are visible in a short timeframe and they can be shared within a network of a growing likeminded community globally.

The International Council for Environmental Initiatives (ICLEI) was founded in 1990 to help articulate the voice of local government at the World Summit for Environment and Development in Rio de Janeiro 1992. The main document of this Summit, the “AGENDA 21” was complemented by the “Local Agenda 21” (LA21) providing the platform for a shared vision of local governments for sustainable development. With a growing acceptance of local responsibilities in responding to world challenges, the LA21 Motto was reformulated to “Local Action Moves the World”. ICLEI with 13 offices on all continents and a staff of 150 has now some 1 100 local government members worldwide, of which 155 are from the EU and 10 from the UK. In respect to the Climate Debate ICLEI started its campaign “Cities for Climate Protection” (CCP) in 1993. 

Cities for Climate Protection

The CCP campaign is based on a “Milestone Approach consistent of the five elements

1   Establish an Emissions Inventory

2    Make a Commitment by setting Targets

3    Establish a Local Action Plan

4    Implement the Local Action Plan

5   Monitor and Evaluate Progress

In the run up to COP15, the ICLEI has established the Copenhagen City Climate Catalogue, which is shorthand for the World Catalogue of City Commitments to Combat Climate Change, or cities that are independently striving for carbon emissions reductions. (www.iclei.org/climate-roadmap/cop15, www.iclei.org/cop15/climate-lounge)

 At the beginning of COP 15 the catalogue recorded more than 2 800 participating cities, some 1 100 from the USA, 380 from Germany, 150 from the UK, 70 from Canada and 12 from China. These cities have adopted the five-step process outlined above to varying degrees so far. The message to Copenhagen however is that Local Governments around the world are willing and able to act, and could do even better if the economic and legal framework – and central governments - would take this more into account. Cities can lead by example.

The Copenhagen Climate Summit for Mayors taking place during the second week of COP15 will demonstrate that “Cities Act and Show How” and emphasize the two major positions of the Mayors in Copenhagen

· National actions, which aim at limiting global warming, should ensure a strong recognition and empowerment of their local governments. Furthermore, they must ensure that local climate action is a consistent part of the national climate strategies.

· Any further multilateral agreement on implementation mechanisms on combating climate change must therefore highlight the need for partnership between national and local government. 

“No money no deal”?

Clearly, developing countries will need and should receive considerable financial assistance for mitigation, adaptation, technological cooperation and capacity building. However, “no money, no deal” should not mean “no action”, certainly not in industrialized countries but also not in the developing world. Many investments are economically feasible now and “no money” is no excuse for not exploiting these opportunities now.

The report, Pathways to a low-carbon economy (2009) by McKinsey & Company, presents a “global mapping of opportunities to reduce the emissions of GHGs across regions and sectors” in the format of a “Global GHG abatement cost curve” assessing the costs of different measures for CO₂ reductions “beyond business-as-usual – 2030”. The Summary of Findings concludes: “Indeed, many of the opportunities would see future energy savings largely compensate for upfront investment.” 

Thus, the ’abatement cost curve‘ should be renamed ’Investment Opportunity Curve‘ and it will take different shapes depending on the natural- and built-environment in each location. While certain rural locations can often move to 100 percent CO₂- neutral energies simply by making efficient use of biomass, other places may better mobilize their small hydro-, geothermal-, solar-, wind- or tidal energy sources. For all of them more efficient use of secondary raw materials (‘solid waste’ or ’wastewater‘) may be another source of renewable energy.

Energy efficiency and renewable energy two sides of the same coin

The ’Investment Opportunity Curve‘ combines measures for increasing energy efficiency and the provision of renewable energies. Within a CO₂ reduction strategy these two approaches are two sides of the same coin: As important as it is to push green energies, it is also important to push the reduction of energy demand.  The more the overall energy demand is being reduced, the less investment is needed to achieve a supply based on 100 percent renewable energy.  It’s very clear that we need to go on both those lines. We need to push in the new energies, and we need to reduce energy demand through more energy efficiency and to some extent through changes of life styles.  The measures assessed by the abatement cost curve are not all self-financing. Specifically the carbon capture and storage (CCS) projects, a technology far from providing proven solutions yet, are at the high end of the abatement costs.

Economically, the challenge is a re-orientation of economic incentives from subsidizing energy supply (so far mainly favouring the provision of fossil fuels and nuclear energy) towards subsidizing clean energies and energy efficient technologies. As long as there seems to be no serious effort to include the external costs (including a risk premium) into the pricing of fossil and nuclear energies such a strategy should also be justifiable on purely economic grounds. The feed-in tariffs provide a good example for this re-orientation: In Germany, the conventional electricity tariff stands at some 20 cents. This includes the cost of the feed-in-tariff system, which is calculated at 0.5 cents, and thus contributes 2.5 percent to the total. At the same time this subsidy has pushed the development of new technologies, which are increasingly becoming competitive without subsidies.  I’m very happy to say that together with countries such as Australia, Austria, Brazil, France, Germany, Greece, Italy, Portugal, Spain, South Korea, Turkey, and several states in the USA as of 19 September 2009 also the Republic of Serbia has passed the decree on feed- in-tariffs.

Let me conclude with two examples demonstrating existing options for increasing energy efficiency by using new technologies including renewable energies.

The “Plus-Energy-House”

My first example is that of a school building in Freiburg, Germany, built in the nineteen seventies and highly inefficient in its energy use. The school was refurbished and solar panels were added.  The project financing was based on the principles of performance contracting whereby the contractor is planner, financer, constructor and operator of the energy saving projects. The re-financing of the investment was solely based on energy savings generated by the investment, a typical case among many others realized at the same time. This case was special insofar as the needed investment of €246 000 was mainly provided by the parents and teachers of the school. This form of green investment is known as “performance contracting with citizen participation”.

The payback to the investors (parents and teachers) amounted to €364 000 within 8 years, with a share of €79 000 for the school itself. The municipality, as owner of the school will in future save additional €80 – 90 000 per year, and the new solar panels will generate additional revenues after the completion of the Project. As the building sector is the biggest users of energy, responsible for some 40 percent of the energy consumed, German legislation has increased the building standards stepwise during the last two decades and introduced a mandatory energy efficiency labelling system for buildings. Freiburg, together with some other German cities, has always gone further than required by federal laws, adopting even stricter standards and ahead of time, making the reduction of energy consumption from the building stock a key policy goal for its urban planning. Currently the vision for the next generation of “energy efficient” buildings is the “Plus-Energy-House”, which, by definition, produces more energy than it consumes.

Efficient lighting saves energy

Another example is from the University of Mexico, where the lighting system was renovated with the cooperation of local engineering firms.  In pilot projects, a master plan for efficient lighting and its saving potential from four distinct areas of the University was elaborated; the classroom and labs, the library, the foyer, and the workshops.  After the efficient lighting systems were installed, the results showed significant savings in electricity consumption and in operational costs as shown in Table 1.

Table 1. Results from the pilot-project in Mexico:  costs and savings

For more details on both projects, please see Dieter Seifried, Büro Ö-quadrat, Director, ECO-Watt GmbH, www.oe2.de   www.eco-watt.de and his full presentation on www.sls.rs.

Conclusion

For action to take place it needs a place. Cities and citizens are ready and willing to act.  The national and international standards must support local action.  Mitigation of climate change is feasible and can be financed by the act of investing in energy efficiency and in renewable/green energies.  While we increasingly seem to focus on climate adaptation, not enough time and attention is given to climate mitigation when planning and when making investment decisions.

The presentation reflects the personal opinions of the author and not necessarily the positions of GTZ.

Transcribed by Sam Burcher at the Green Energies launch conference at Westminster on 25^th November 2009.  Edited by Sam Burcher and Dr Mae-Wan Ho.

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