Programme of Activities for Cities and suitability of current framework and rules

1. 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) & MonaliRanade (Mranade@worldbank.org)

2. Contents • 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.

3. “Globally, cities emit up to 70% of all GHGs but occupy only 2% of the world’s land” Source: UN Habitat Transportation of Waste Transport Waste Sources of emissions: 1. Transport 2. Solid waste 3. Water 4. Energy usage Emission sink: Urban forestry Traffic management systems Biogas-to- energy Energy Pedestrian comfort Sludge treatment Heat island effect Efficient water pumping Urban Forestry Water Grey water reuse

4. Current options for cities to access carbon finance* * Under CDM Waste Transport Option 1: Stand-alone project in one large city (e.g., LFG project in City A) City A water 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) Transport Waste City B water Waste Transport City C Options 3: PoA across many cities (e.g., Transport CPAs in City A, B and C )

5. 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.

6. Structure of city-wide PoAs Implementation over time Management, Implementation, monitoring & reporting

7. Sectoral scope included in city-wide PoA

8. Environmental integrity of city-wide PoAs Contd. Clear attribution of emissions: Emission Reductions can be traced to the 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

9. Decision of CMP6, December 2010 regarding the city-wide 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”

10. 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 • 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)

11. 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.

12. Thanks for listening

13. Carbon markets Climate finance National/local government Bi-lateral agencies Private investors Transportation of Waste Transport Waste Traffic mgt Biogas-to- energy • Define structure • Define boundary • Prepare inventory • Identify agencies • Define incentives • Identify activities • Establish database City-wide program Sludge treatment Energy Pedestrian comfort Efficient water pumping Heat island effect 8. Implement activities • Quantify GHG ER • Validate/verify Urban Forestry Water Grey water reuse Air quality Pollution reduction Local jobs Quality of life Energy saving GHG mitigation

14. How to validate and verify city-wide PoA Validation of PoA and 1st CPA 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 CME prepares CPA-DD(s) DOE team with sectoral scope of the relevant CPA (2nd, 3rd,…, nth) Site-visit, if required Verification 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

15. 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

16. Examples of sector specific regulatory challenges for transport and housing in city wide PoA.