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Carbon Financing in the Residential Sector

Discusses the potential of CDM to finance low-carbon measures in Latin American homes, challenges, and case studies. Aims to address urbanization and vulnerability in the region.

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Carbon Financing in the Residential Sector

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  1. Carbon Financing in the Residential Sector Latin American CarbonForum Alberto Carrillo Pineda San José, Costa Rica 28 September, 2011

  2. Objective and Contents Objective Contents • To discuss the potential of CDM to finance and facilitate the adoption of “third-generation” low-carbon measures in the residential sector in Latin America. • To present one case study of “third-generation” Program of Activities under development in the region.

  3. Objective and Contents Objective Contents • To discuss the potential of CDM to finance and facilitate the adoption of “third-generation” low-carbon measures in the residential sector in Latin America. • To present one case study of “third-generation” Program of Activities under development in the region.

  4. Three mega-trendsshapingtheclimate in theregion Increasing GHG Emissions • Cities represent between 40 and 80% of the global greenhouse gas emissions. (ICLEI, 2010) • According to the International Energy Agency cities accounted for 67% of the world primary energy demand and more than 70% of global CO2 emissions in 2006. • Continued urbanization and economic growth is expected to increase the GHG emissions associated with cities. Urbanization Vulnerability Increasing GHG Emissions • The high (uncontrolled) urban growth has considerably increased the vulnerability to natural disasters of a large share of the population in the region. • Climate change is likely to increase many of the already existing urban stresses (i.e. heat islands, insufficient sanitation / water supply, inadequate housing, etc.). • LA is the region with the highest urban population concentration in the developing world.(IAI, 2007) • By 2030, about 83% of the population in LA will be living in cities. (IAI, 2007) • Cities (and especially capital cities) concentrate a large share of the GDP in the region. Vulnerability Urbanization

  5. Needtodesign and implementcarbon-financeinstrumentsthatrespondtothese mega-trends 1st Generation Carbon Initiatives 2nd Generation Carbon Initiatives Key Elements Type of Projects Examples • Strong focus on projects that reduce emissions from urban infrastructure (supply side). • Some co-benefits addressing urban issues. • Landfills • WWTP (not Industrial) • LFG (several throughout the region) • Projects that reduce emissions changing energy consumption patterns (demand-side) • Typically disaggregated project activities • BRT • Demand-Side Energy Efficiency • BRT(Transmilenio, Medellin, Mexico City, Guatemala) • Solar Water Heaters (Peru, Chile), Efficient appliances (Mexico, Brazil) • Energy consumption patterns and/or urban infrastructure (demand side) • Mitigation + Adaptation Co-benefits • Green Mortgage / Subsidy (Mexico) • Water & Energy Efficiency PoA (Mexico) • Demand-side water efficiency • Sustainable Housing 3rd Generation Carbon Initiatives

  6. Objective and Contents Objective Contents • To discuss the potential of CDM to finance and facilitate the adoption of “third-generation” low-carbon measures in the residential sector in Latin America. • To present one case study of “third-generation” Program of Activities under development in the region.

  7. Case study: Demand-SideWaterEfficiencyand CarbonFinance Water Marginal Cost Curve WaterDemandScenario Cost EfficientWaterFixtures Water Availability CO2 Marginal Abatement Curve Household Hot-WaterEfficiency Cost CO2 0.5 – 1 tCO2 / yr H2O 30 – 50% EfficientWaterFixtures

  8. Case study: Demand-SideWaterEfficiency and CarbonFinance Methodologies Mitigation Potential for the largest cities in the region • Clean Development Mechanism • AMS-II.M “Demand-side energy efficiency activities for installation of low-flow hot water savings devices” • Gold Standard • Indicative Program, Baseline and Monitoring Methodology for Large-Scale Supply and Distribution of Efficient Light Bulb, Showerheads and Water Saving Products to Households tCO2 / yr tCO2 / household / yr

  9. Case study: Demand-SideWaterEfficiency and CarbonFinance Whogetsthewaterbenefits? Financialprofilefor a 100,000 householdproject Lowvolume High volume Verylowincome Whogetsthewater-savingbenefits? Low income Middle income High income Household Government

  10. Case study: Demand-SideWaterEfficiency and CarbonFinance Challenges / Barriers Sustainability co-benefits • Environmental • Reductions of GHG emissions and water-consumption • Reduction in local air pollution and generation of wastewater • Social / Economic • Significant savings for households and governments (or water utilities) • Economic way to address water stress issues • Cultural • Water perceived as a free, infinite resource • Regulatory • Post 2012-deadline • Economic • Difficult to realize the water-saving benefits benefits for investors • Unusual project for traditional financing

  11. Thanksforyourattention! Contact Information • Alberto Carrillo Pineda • Managing Partner • a.carrillo@carbonding.com • Carbonding Climate Community S. de R. L. de C.V. • Tel. +52 55 8421 7749 • www.carbonding.com We are lookingforpartners!

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