THE LOW CARBON LIVABLE CITIES INITIATIVE

Transcription

1 THE LOW CARBON LIVABLE CITIES INITIATIVE

2 Task Force Overview Why Cities? The Low Carbon Livable Cities Initiative 1. Get Cities Ready 2. Get Finance Flowing

3 Bold Action on Climate Change Climate change could roll back decades of development, the poorest and most vulnerable will be hardest hit. We must work with partners to prevent a 4 C world and prepare our clients for a 2 C world. What will it take? Bold actions to get prices right, get finance flowing, and work where it matters most.

4 Four Pillars of the Task Force Catalyze a Globally- Connected Carbon Market Remove Harmful Fossil Fuel Subsidies Create Livable, Low Carbon Cities Deliver Climate Smart Agriculture Getting Prices Right Getting Finance Flowing Working Where it Matters

5 Working Where it Matters Most Climate change and rapid urbanization are the dual challenges of the 21 st century. City governments make decisions that result in visible action on the ground Cities can fill the void created by lack of an international climate agreement

6 GHG Emissions: A Common Denominator for Efficiency Across Urban Sectors electricity transport fuel heating and industrial fuel waste congestion air quality

7 GHG Emissions: A Common Denominator for Efficiency Across Urban Sectors Korea: Extended Producer Responsibility (EPR) System requires manufacturers and importers to recycle a certain amount of their products (instead of land filling or incinerating) Reduced CO 2 emissions by an average of 412,000 tons/yr Financial benefits (from 2003 to 2010): US$2.0 billion US: NYC LED street lighting retrofit: 250,000 light fixtures US$14 million/ yr saved in reduced energy consumption and maintenance costs

8 Reducing GHG Emissions: A Question of Competitiveness Reduced fuel expenses Reduced electricity expenses Reduced congestion Improved efficiency Improved service quality Improved health and quality of life Job creation The environmental goods and services industry in London has more than: 9,200 companies 160,000 jobs 24 billion in revenue Innovation Green economic growth

9 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

10 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

11 Climate Change Accredited Professional Challenge Solution A recent analysis by World Bank staff found that only about 20 percent of the world s 150 largest cities have even the basic analytics needed for low-carbon planning, such as GHG inventories The Low-Carbon Livable Cities Initiative will help build that evidence base, by rolling out greenhouse gas inventories in cities globally and by developing an accreditation program to expand the pool of talent embedded in cities around the world that can support local climate planning efforts Outcomes In the long-term, this will: create the human resource capacity cities need for low-carbon planning

12 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

13 Climate Action Planning Tool Challenge Solution Cities need support in identifying best mix of policies and interventions given their local context and emissions profile A new comprehensive decision-support platform to help cities select the best mix of policies and interventions based on their unique local context, and analyze their GHG emission reduction and economic potential Outcomes The platform will allow users to evaluate dozens of policy and technology interventions commonly included in local climate action plans leveraging the best existing tools and supplementing with new tools when needed CITY TYPOLOGY CLIMATE ACTION PLAN EMISSIONS REDUCTION POTENTIAL

14 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

15 Climate Smart Capital Investment Plans Challenge Solution Capital investment plans lay out local infrastructure spending priorities over a 3-10 year period. There is a huge opportunity to integrate climate-smart investments into this strategy Help cities develop Climate Smart Capital Investment Plans using a standardized approach that will identify and package projects into bankable deals that can be financed through a bond or another delivery mechanism. Outcomes In the long-term, this will: Institute a climate lens into the capital investment planning process Allow for bundling of investments to increase the deal size Help reduce the high costs of due diligence that is often a barrier for investors by creating a standardized approach to reporting project information and risk characteristics

16 Climate Smart Capital Investment Plans GHG inventory climate action plan capital investment plan $ urban risk assessment

17 The Infrastructure Financing Gap $1.3 trillion/yr needed to fill infrastructure financing gap in developing countries $125 billion ODA is only a small part of the solution

18 500 largest cities in the world

19 Cities in the World Bank s service territory

20 International investment-grade cities in WB service territory 17 20

21 Investment-grade, including domestic ratings 48* * Number identified so far and we re still looking! 21

22 Not Investment-Grade (Domestic or International) 366 Please tell us if you spot any errors in this map! 22

23 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

24 City Creditworthiness Training Program Challenge Solution Low carbon and climate resilient infrastructure investments in cities are hindered by a lack of city creditworthiness, limiting access to private capital The Creditworthiness Training Program provides city government leadership and staff with targeted technical assistance and capacity building activities, helping a city transition to creditworthiness Outcomes In the long-term, this will: Lead municipalities to creditworthiness Enable cities to access capital markets themselves

25 City Creditworthiness Academy Partners Participants Creditworthiness Training Public-Private Infrastructure Advisory Facility (PPIAF) French Development Agency (AFD) Municipal Institute of Learning, ethekwini-durban (MILE) 54 senior municipal administrators 18 sub-national entities 10 African countries 4-day training on factors underpinning city creditworthiness, e.g. revenue identification/collection/management, capital investment planning, asset management, tariffs setting, credit ratings, municipal finance, debt management Creditworthiness Self-Assessment ½-day self-assessment to identify strengths/weaknesses in each participating entity s path toward creditworthiness Gap-analysis and Planning ½-day one-on-one session with each city to flesh out a multi-year action plan to address key impediments identified in the self-assessments

26 The Solution THE LOW CARBON LIVABLE CITIES INITIATIVE 1 get cities ready BUILDING THE EVIDENCE BASE GHG Inventories and Climate Change Professional Accreditation Program 4 get finance flowing GETTING TO INVESTMENT GRADE City Creditworthiness Training Program 2 PLANNING FOR LOW-CARBON DEVELOPMENT Climate Action Planning Tool 5 INNOVATIVE FINANCING MECHANISMS Pooled Financing Solutions to Access Financing at Better Terms 3 FROM PLANS TO INVESTMENTS Climate Smart Capital Investment Planning

27 Facility for Financing Low Carbon Infrastructure at the City Level Challenge Solution New approaches are needed to attract large-scale institutional investors to finance climate investments in cities. A Facility for Financing Low-Carbon Infrastructure at the City Level will pool and securitize borrowing by several large cities to fund infrastructure investments. The first example will be energy efficient street lighting, where energy savings will cover the principal and interest. Outcomes The energy efficient street lighting example will provide a proof of concept that will then be used over time to target other low-carbon asset classes

28 ilef International Lighting Efficiency Facility (a template for low carbon and climate resilient infrastructure finance) Notional terms for energy efficient street lighting: USD 1 billion minimum 3 to 5 cities from developed and emerging market countries Credit rating: single-a Maturity: 5 years Cash flow: efficiency savings are ring-fenced to cover conventional, semi-annual coupon payments Issuance: Global World Bank s Role: Work with cities to facilitate implementation of their lighting efficiency programs Arrange the financing for the facility Manage facility liquidity, risk management and financial operations Catalyze provision of funds to cover startup costs NOTE: Financing terms have yet to be finalized

29 Expanding the Model to Other Asset Classes Abatement cost per tco 2 e Residential electronics Residential appliances Retrofit residential HVAC Tillage and residue mgmt Insulation retrofit (residential) Cars full hybrid Waste recycling Low penetration wind Cars plug-in hybrid Degraded forest reforestation Nuclear Pastureland afforestation Degraded land restoration 2 nd generation biofuels Building efficiency new build Organic soil restoration Geothermal Grassland management Reduced pastureland conversion Reduced slash and burn agriculture conversion Small hydro 1 st generation biofuels Rice management Efficiency improvements other industry Electricity from landfill gas Clinker substitution by fly ash Cropland nutrient management Motor systems efficiency Insulation retrofit (commercial) Lighting switch incandescent to LED (residential) Note: The curve presents an estimate of the maximum potential of all technical GHG abatement measures below 60 per tco 2 e if each lever was pursued aggressively. It is not a forecast of what role different abatement measures and technologies will play. Source: Global GHG Abatement Cost Curve v2.0 Gas plant CCS retrofit Coal CCS retrofit Iron and steel CCS new build Coal CCS new build Power plant biomass co-firing Reduced intensive agriculture conversion High penetration wind Solar PV Solar CSP Abatement potential GtCO 2 e per year

30 Thank you! #LC2