GAP FUND TECHNICAL NOTES CARBON CREDITING & URBAN CLIMATE CHANGE MITIGATION: ASSESSING POTENTIAL IMPACTS JUNE 2023 © 2023 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Carbon Crediting and Urban Climate Change Mitigation: Assessing Potential Impacts. City Climate Finance Gap Fund Technical Note. © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. 1 Carbon Crediting and Urban Climate Change Mitigation Assessing Potential Impacts Gap Fund Technical Note1 Introduction Carbon crediting and urban climate change mitigation Approximately 70% of greenhouse gas emissions are generated through consumption in urban areas,2 which means that decarbonization of cities is essential to limit climate change to 1.5 to 2 °C. While per capita emissions in low- and middle-income countries remain low so far, prompt action is needed to ensure that cities in these countries remain on a low-carbon pathway, before rapid urbanization and increases in consumption lock in high emissions for decades. Technically feasible actions can cut up to 90% of emissions in cities globally between now and 2050. However, the infrastructure investments necessary to do this would cost USD 1.8 trillion each year, by one estimate.3 Carbon crediting is one approach to increase funding for mitigation activities. Carbon crediting refers to a system in which tradable credits are generated through activities that reduce carbon emissions or remove carbon from the atmosphere. Each credit typically represents a metric ton of carbon dioxide equivalent avoided or removed. Businesses and other organizations can generate carbon credits (and hence revenue) by demonstrating that emissions have been reduced or sequestered relative to a counterfactual baseline.4 According to the Transformative Carbon Asset Facility (TCAF) Urban Crediting Framework, carbon crediting for urban areas can increase funding for infrastructure improvements needed in cities while accelerating urban emissions reductions. 5 TCAF identifies four broad areas of GHG emission 1 The analysis discussed in this note was conducted by Daniel Hoornweg and David Wotten under the guidance of Augustin Maria. This version of the note was drafted by Chandan Deuskar, with inputs from Daniel Hoornweg, David Wotten, and Augustin Maria. The analysis benefited from discussions with Zarrina Azizova, Vanessa Alexandra Velasco Bernal, Xiaoyu Chang, David Sislen, Lorraine Sugar, and Nuyi Tao. 2 IPCC, 2022: Summary for Policymakers. In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley, (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA. doi: 10.1017/9781009157926.001 3 Coalition for Urban Transitions. 2019. Climate Emergency, Urban Opportunity. World Resources Institute (WRI) Ross Center for Sustainable Cities and C40 Cities Climate Leadership Group. London and Washington, DC. 4 The World Bank (2022) “State and Trends of Carbon Pricing 2022” (May), World Bank, Washington, DC. Doi: 10.1596/978 - 1-4648-1895-0. License: Creative Commons Attribution CC BY 3.0 IGO 5 Sachdeva, Swati and Rogers, John.2021. Urban Crediting framework- A guide for government leaders and development professionals working in urban areas. World Bank, Washington, DC. 2 reduction in urban areas that may fall under the purview of city or sub-national governments, namely energy efficient buildings, climate smart urban form, low carbon transport and low carbon infrastructure and services (Figure 1). Figure 1 - Four broad areas to reduce GHG emissions in cities Source: Sachdeva and Rogers (2021) Ideally, the funding from carbon crediting mechanisms would make it possible for cities to invest in actions that would not otherwise be financially feasible. To assess whether this would be the case, it is necessary to first estimate the net cost per ton6 of carbon for various urban climate change mitigation actions and compare these costs to the prevailing price per ton of carbon credits. This would indicate whether the availability to cities of funds from carbon crediting is likely to spur urban climate mitigation actions. To take a hypothetical example, if the prevailing price of a carbon credit is USD 10 per ton, and a mitigation action in a city costs USD 30 per ton, the credit may make a significant difference to the financial feasibility of the action. If the action costs USD 1000 per ton, the credit may be too small to matter. The analysis in this note estimates the net cost per ton of several common urban mitigation activities in two middle-income cities: Istanbul, Türkiye and Bogota, Colombia. In doing so, this analysis identifies the activities which might become financially feasible with carbon credits priced within the range of prices in existing programs (up to roughly USD 100 per ton).7 Methodology Formulas used to calculate the emissions reductions potential and costs per ton are presented in Annex 1. The data used to make these calculations is taken from a wide range of publicly available 6 Tons throughout this document refer to metric tons (tonnes). 7 https://carbonpricingdashboard.worldbank.org/map_data 3 sources. As the accuracy of input data may vary, as well as due to fluctuations in the cost of electricity and other variables over time, the results are indicative, order of magnitude frameworks. City-level emissions for Istanbul and Bogota are estimated as the share of the national emissions of their respective country that is equivalent to the average of the city’s share of national GDP and the city’s share of national population. E.g., if a city has 5% of its country’s population and 15% of its GDP, it is estimated to be responsible for 10% of its country’s emissions. Emissions inventories are presented in Annex 2. Results Istanbul, Türkiye • Population: 15.5 million • Annual greenhouse gas emissions: 101.3 MtCO2e (2020 est.) Istanbul’s emissions (approximately 101 Mt CO2e/year, or 6.5 tons per capita per year) are driven mostly by fossil fuel combustion, especially from coal. Table 1 shows the annual estimated emissions reductions and the costs, savings, and net costs (costs minus savings) per year for Istanbul. The results suggest that the largest potential annual reductions among evaluated activities would accrue from space heating (7.7 Mt CO2e), hot water retrofit (4.6 Mt), and electrical efficiencies in buildings (4.16 Mt), largely due to Istanbul’s relatively cold climate and high-carbon electricity. The upfront cost of the investments per ton of emissions reduced is relatively high, but these costs would be more than offset by savings to households from lower energy consumption due to the high price of electricity in Istanbul, resulting in net savings of over USD 100 per ton. For these activities, whether carbon credits would make the upfront investments feasible depends on the prevailing rate. A price of USD 10-30 per year may not be sufficient, while a price closer to USD 100 would cover over half the upfront costs. Updating building codes has the potential to reduce an estimated 3.2 Mt tons annually, which is less than for the other activities in the building sector, but at a much lower upfront cost of USD 9/ton, which means that this cost could potentially be entirely paid for by carbon credits. Composting of organic waste could be a promising way to reduce emissions via carbon crediting, due to its reasonably high mitigation potential and low net annual cost (USD 85/ton). Other low-cost activities such as landfill gas collection and electrification of waste collection vehicles have lower mitigation potential, according to this analysis. Shifting public or private vehicles to EVs provides a relatively low mitigation potential due to the high carbon intensity of electricity, and higher upfront costs. While public transport systems have many benefits beyond emissions reductions, their high costs relative to emissions reductions mean that they may not be amenable for carbon crediting support. 4 Table 1: Estimated emissions reductions and costs - Istanbul, Türkiye Potential Annual Cost Annual Net Annual Reduction Per Ton of Savings Per Cost Per Ton per year Carbon Ton of of Carbon (MtCO2e/a) Reduced Carbon Reduced (USD/tCO2e) Reduced (USD/tCO2e) (USD/tCO2e) Energy Efficient & Safe Buildings Space Heating & Cooling Retrofit 7.7 $222 $325 -$102 Hot Water Retrofit 4.6 $166 $282 -$116 Electrical Efficiencies in Buildings 4.2 $177 $282 -$105 Update Building Code 3.2 $9 $240 -$231 Cooking From Natural Gas to Electricity -0.4 N/A N/A N/A Low-Carbon Transport Sustainable Public Transport - LRT 0.8 $4,518 $3,534 $984 EV Public Transport - City Bus Diesel to BEV 0.1 $391 $316 $75 EV Incentive Private Sector 0.2 $323 -$1,630 $1,953 Low-Carbon Infrastructure & Services Change Waste Collection Vehicle - Diesel to 0.3 $79 $260 -$181 BEV Composting of Organic Waste 1.3 $167 $83 $85 Landfill Gas Collection & Control 0.1 $7 $0 $7 Community Level Renewable Energy - PV 1.0 $97 $233 -$136 Street Light Energy Efficiency 0.0 $46 $217 -$172 Bogota, Colombia • Population: 10.9 million • Annual greenhouse gas emissions: 43.5 MtCO2e (2020 est.) Bogota’s total emissions are relatively low (44 Mt CO2e/year, 4.04 tCO2e/person). The results of this analysis suggest that the largest annual potential reductions in Bogota would accrue from composting organic waste and community-level renewable energy (Table 2). Composting would reduce an estimated 1.1 Mt CO2e, with an estimated upfront cost of USD 97/ton and a net cost of USD 69/ton, for which carbon credits of USD 10-30/ton could make a significant difference. Community- level renewable energy would also reduce an estimated 1.1 Mt, at an estimated upfront cost of USD 205/ton, which may be too high for carbon credits at prevailing rates to matter, but a net saving of USD 745/t. The relatively low carbon intensity of Bogota’s electricity provides little mitigation potential for building retrofits. Access to clean cooking technology is already high, which limits the mitigation potential of further action on clean cooking. Due to Bogota’s mild climate, building heating and cooling emissions are relatively low. As in Istanbul, low-cost activities such as landfill gas collection and electrification of waste collection vehicles have relatively low mitigation potential. 5 Table 2: Estimated emissions reductions and costs – Bogota, Colombia Potential Annual Cost Annual Net Annual Reduction Per Ton of Savings Per Cost Per per year Carbon Ton of Ton of (MtCO2e/a) Reduced Carbon Carbon (USD/tCO2e Reduced Reduced /a) (USD/tCO2e/ (USD/tCO2e a) /a) Energy Efficient & Safe Buildings Space Heating & Cooling Retrofit *** Due to Mild Climate in Bogota Buildings Heating or Cooling emissions are insignificant. Hot Water Retrofit NG to Elect. 0.2 $200 -$1,631 $1,832 Electrical Efficiencies Buildings - PV 0.8 $201 $951 -$750 Generation no storage Update Building Code w Hot Water & PV 0.0 $102 -$166 $269 Cooking From Natural Gas to Electricity *** World Bank Data indicates 93% of Colombia has access to clean cooking technology so CO2e mitigation action will have negligible effect. Low-Carbon Transport Sustainable Public Transport - LRT 0.3 $3,196 $2,154 $1,042 EV Public Transport - City Bus Diesel to 0.1 $477 $226 $251 BEV EV Incentive Private Sector 0.2 $264 -$1,444 $1,707 Low-Carbon Infrastructure & Services Change Waste Collection Vehicle - Diesel 0.0 $67 $80 -$13 to BEV Composting of Organic Waste 1.1 $97 $28 $69 Landfill Gas Collection & Control 0.0 $7 $0 $7 Community Level Renewable Energy - PV 1.1 $205 $951 -$745 Street Light Energy Efficiency 0.0 $99 $742 -$643 Conclusion The results of this analysis for two cities should be interpreted with caution due to the unverified and variable nature of the underlying data. However, these indicative results suggest the following: • There is no universal prescription for low-cost carbon mitigation in cities. The mitigation potential and associated costs of activities will vary between cities based on factors including climate, transportation mode shares, access to clean cooking technology, and others. • The carbon intensity of a city’s electricity (existing and future) is an important factor in determining the mitigation potential of activities. For example, in a city with high-carbon electricity, electrification of vehicles has lower mitigation potential, whereas energy efficiency retrofits of buildings which reduce electricity consumption have higher mitigation potential. The opposite is true in cities with low-carbon electricity. • Analysis such as this can be useful in identifying the mitigation activities that fall into the “sweet spot” in which mitigation potential is high enough to matter but costs are low enough 6 that carbon crediting may be worth pursuing, e.g., composting of organic waste in both cities. • Even in the case of actions with high mitigation potential which pay for themselves over time, e.g., building retrofits in Istanbul, carbon crediting may be useful in covering the upfront cost, thereby “unlocking” both the emissions reductions and future financial savings and prioritizing the activity. • The activities which are least expensive per ton of mitigation, with costs which could be substantially or completely covered by carbon credits at prevailing rates, may not be worth implementing, at least not for the sake of emissions reductions alone, due to their low total mitigation potential, e.g., landfill gas collection and electrification of waste collection vehicles in both cities. Finally, it is important to note that the calculations above focus on reductions in current emissions. Some of these actions, as well as others beyond these, could have a significant impact on avoiding future emissions, particularly in rapidly growing cities. Additional analysis and discussion would be needed to evaluate the long-term benefits of such actions, as well as discussing how these benefits could be considered when issuing carbon credits. 7 Annexes 1. List of assessed activities – detailed calculations CATEGORY 1: - ENERGY EFFICIENT BUILDINGS ACTIVITY 1A - RETROFIT EXISTING BUILDINGS - EFFICIENCY OF SPACE HEATING & COOLING Public Industrial & Commercial Residential ACTIVITY 1B- RETROFIT EXISTING BUILDINGS - RETROFIT EFFICIENCY OF HOT WATER SYSTEMS Public Industrial & Commercial Residential ACTIVITY 1C - RETROFIT EXISTING BUILDINGS - RETROFIT EFFICIENCY OF ELECTRICAL DEMAND Public Industrial & Commercial Residential ACTIVITY 1D– UPDATE BUILDING CODES – SCOPES 1, 2 AND 3 (INCL. EMBODIED EMISSIONS) Public Industrial & Commercial Residential ACTIVITY 1E – CLEAN COOKING EFFICIENCY IMPROVEMENT CATEGORY 2: LOW-CARBON INFRASTRUCTURE & SERVICES ACTIVITY 2A: SOLID WASTE MANAGEMENT - CHANGES TO COLLECTION FLEET ACTIVITY 2B: SOLID WASTE MANAGEMENT - COMPOSTING OF ORGANICS FROM LANDFILL ACTIVITY 2C: SOLID WASTE MANAGEMENT - LANDFILL GAS (LFG) CAPTURE / USE ACTIVITY 2D: COMMUNITY LEVEL RENEWABLE ENERGY ACTIVITY 2E: STREET LIGHTING – ENERGY EFFICIENCY IMPROVEMENT ACTIVITY 2F: METHANE MITIGATION – COMMUNITY-WIDE PROGRAM ACTIVITY 2G: BLACK CARBON REDUCTION – COMMUNITY-WIDE PROGRAM CATEGORY 3: LOW-CARBON TRANSPORT ACTIVITY 3A: SUSTAINABLE PUBLIC TRANSPORT Subway Light Rapid Transit (LRT) Bus Rapid Transit (BRT) ACTIVITY 3B: SUSTAINABLE PUBLIC TRANSPORT – RIDE SHARE ACTIVITY 3C: SUSTAINABLE PUBLIC TRANSPORT – EVS PUBLIC VEHICLES ACTIVITY 3D: SUSTAINABLE PUBLIC TRANSPORT – EV INCENTIVE TO PRIVATE OWNERS ACTIVITY 3E: SUSTAINABLE PUBLIC TRANSPORT – CONGESTION PRICING 8 CATEGORY 1: - ENERGY EFFICIENT BUILDINGS ACTIVITY 1A - RETROFIT EXISTING BUILDINGS - EFFICIENCY OF SPACE HEATING & COOLING PUBLIC INDUSTRIAL & COMMERCIAL RESIDENTIAL Buildings divided by asset class and typical ownership. Potential Carbon Reductions (excludes benefits of increased resilience, improved comfort and air quality) Carbon Reduction Potential (tCO2e) = Floor Space (m2) X Emissions Reductions (tCO2e/m2/a) Cost Carbon Reduced ($/tCO2e) = Heat & Cooling retrofit ($/m2/a) / Emissions Reductions (tCO2e/m2/a) Cost of Carbon Reduced (Net) Carbon Reduced ($/CO2e, Net) = Carbon Reduced ($/CO2e) - Savings per CO2e reduced ($/CO2e) Estimates & Assumptions Floor space (e.g., Public, Industrial & Commercial or residential building) retrofitted in square meters (m 2); Net Potential Emissions Reductions (tCO2e/m2/a) = Potential energy savings from retrofit in (kWh/m 2/a) X emissions factor of the energy system used (CO2e/kWh) - emissions caused by the retrofit (tCO2e/m2/a) annualized over life of retrofit (e.g., material / embodied carbon of insulation used) Cost of Heat & or Cooling retrofit averaged over life ($/m2/a) = Equivalent annual cost of capital ($/a) +/- change in annual maintenance cost($/a), divided by the floor area of sector being retrofitted (m 2) Savings per ton of CO2e reduced ($/CO2e) = Cost of current energy ($/kWh) times the energy saved from retrofit (kWh/m2/a) / Net Potential Emissions reductions (tCO2e/m2/a) 9 ACTIVITY 1B- RETROFIT EXISTING BUILDINGS - RETROFIT EFFICIENCY OF HOT WATER SYSTEMS PUBLIC INDUSTRIAL & COMMERCIAL RESIDENTIAL Buildings divided by asset class and typical ownership. Potential Carbon Reductions Carbon reduction potential per sector (tCO2e) = Floor Space of Building Sector (m2) X Net Potential Emissions Savings of Hot Water Retrofit (tCO2e/m2/a) Cost Cost of Carbon reduced ($/tCO2e) = Annualized cost of Hot Water retrofit ($/m 2/a) / Net Potential Emissions Savings (tCO2e/m2/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings of CO2e reduced ($/CO2e) Estimates & Assumptions Net Potential Emissions Reductions of hot water retrofit (tCO2e/m2/a) = The potential annualized energy saving from retrofit in (kWh/m2/a) times the emissions factor of the current energy system used (CO2e/kWh) less any emissions caused by the retrofit (tCO2e/m2/a) e.g., material carbon of Boiler used Cost of Hot Water retrofit averaged over life ($/m2/a) = Equivalent annual cost of capital for hot water retrofit ($/a) +/- change in annual maintenance cost($/a), divided by the floor area of sector being retrofitted (m 2) Savings of CO2e reduced ($/tCO2e) = Cost of energy per kWh ($/kWh) times the energy saved from retrofit (kWh/m2/a) / Net Potential emissions reduction (tCO2e/m2/a) 10 ACTIVITY 1C - RETROFIT EXISTING BUILDINGS - RETROFIT EFFICIENCY OF ELECTRICAL DEMAND PUBLIC INDUSTRIAL & COMMERCIAL RESIDENTIAL Buildings divided by asset class and typical ownership. Potential Carbon Reductions (excluding enhanced livability, increased resilience) Carbon reduction potential per sector (tCO2e) = Floor Space of Building Sector (m2) X Net Potential Emissions Savings of Electrical Retrofit (tCO2e/m2/a) Cost Cost of Carbon per ton reduced ($/tCO2e) = Cost of Electrical retrofit averaged over life ($/m2/a) / Emissions Savings (tCO2e/m2/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Net Potential Emissions Reductions (CO2e) of electrical retrofit (tCO2e/m2/a) = Potential annualized energy savings from retrofit (kWh/m2/a) times the emissions factor of the energy system (CO2e/kWh) less any emissions caused by the retrofit (tCO2e/m2/a) e.g., waste heat from LED lighting retrofit is reduced in a heating dominated climate, emissions from the increase in the heating system to make up the shortfall should be included. Cost of Electrical retrofit average over life ($/m2/a) = Equivalent annual cost of Capital for electrical retrofit ($/a) +/- change in annual maintenance cost($/a), divided by the floor area of sector being retrofitted (m 2) Savings Per Ton CO2e Reduced ($/CO2e) = Cost of energy ($/kWh) times the energy saved from retrofit (kWh/m2/a) / Net Potential Emissions Reductions (tCO2e/m2/a) 11 ACTIVITY 1D – UPDATE BUILDING CODES – SCOPES 1, 2 AND 3 (INCL. EMBODIED EMISSIONS) PUBLIC INDUSTRIAL & COMMERCIAL RESIDENTIAL Buildings divided by asset class and typical ownership. Potential Carbon Reductions (excludes increased resilience and utility, improved comfort, IAQ) Carbon reduction potential (tCO2e) = Floor Area of Sector projected to be built (m 2) X Net Potential Emissions Reductions (tCO2e /m2/a) Cost Cost of Carbon Reduced ($/tCO2e) = Capital Cost of Energy Efficiency ($/m2/a) / Potential Emissions Reductions (tCO2e/m2/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/tCO2e) = Cost of Carbon Reduced ($/tCO2e) - Savings of CO2e reduced ($/tCO2e) Estimates & Assumptions Net Potential Emissions Reductions (tCO2e/m2/a) = Potential Energy Saving resulting from new code (kWh/m2/a) X the emissions factor of the energy system used (tCO2e/kWh) - annualized emissions from the construction of the building (e.g., embodied carbon emitted from the production of insulation, concrete, steel, siding, etc.) (tCO2e/m2/a). Capital Cost of Energy Efficiency ($/m2/a) = Equivalent annual cost of the additional capital expense resulting from the proposed Building code ($/a) + annual additional maintenance cost ($/a) / floor area of sector being retrofitted (m2); Savings of CO2e reduced ($/tCO2e) = Potential Energy saved from new building code (kWh/m 2/a) X Cost of Energy per kWh ($/kWh) / Net Potential Emissions Reduction (tCO2e/m2/a) 12 ACTIVITY 1E – CLEAN COOKING EFFICIENCY IMPROVEMENT (RESIDENTIAL) Potential Reductions in carbon emissions (excluding particulates and health benefits) Carbon Reduction Potential (tCO2e) = Number of Households (H) X Net Emissions Potential Reductions Per household (tCO2e/H/a) Cost Carbon reduced ($/tCO2e) = Net Capital Cost of Activity for Cooking per household ($/H/a) / Net Emissions Potential Reductions per household per year (tCO2e/H/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Assuming the proposed new cooking activity would be phased in when a new cooking system was required. In any combustion of fuel, especially wood, black carbon emissions are to be included in CO2e. Total emissions includes material/ embodied emissions of cooking device, maintenance and operational emissions. The number of households (X #H) can be disaggregated by type of cooking (e.g., by households cooking with kerosene, wood, gas, etc.); Net Emissions Potential Reduction Per Household (tCO2e/H/a) = Total Emissions from current method (tCO2e/m) – Total Emissions from proposed method (tCO2e/m)) X the number of households per year (#m/H/a). Net Capital Cost of Activity for Cooking per household ($/H/a) = Capital cost of the proposed cooking activity annualized per household includes cooking appliance and maintenance ($/H/a) - Capital cost of the current cooking activity including maintenance ($/H/a) Savings per ton of CO2e reduced ($/tCO2e) = Cost of current cooking method per meal ($/m) – Cost of proposed cooking method per meal ($/m) X number of cooked meals per household per year (#m/H/a)) / Net Emissions Potential Reduction (tCO2e/H/a) Assumptions – Building Sector HVAC – Heating, ventilation and air conditioning Retrofit activities amortized over 10 - 30 years depending on activity; discount rate and inflation per activity Buildings divided into three broad categories: residential (self-owned and rented); government and institutional (all levels, mainly public sector ownership and management); industrial and commercial (mainly private sector ownership and operation). Heating degree and cooling degree days determined by climactic zone. 13 CATEGORY 2: LOW-CARBON INFRASTRUCTURE & SERVICES ACTIVITY 2A: SOLID WASTE MANAGEMENT - CHANGES TO COLLECTION FLEET Potential Carbon Reductions (excluding reduced service requirements, noise and particulate pollution) Carbon Reduction Potential (tCO2e/a) = Number of Waste Collection Vehicles (CV) X Net Potential Emissions Reductions per CV (tCO2e/CV/a) Cost (assuming the purchase of an existing vehicle vs purchase of a lower or zero emission vehicle) Cost of Carbon per ton reduced ($/tCO2e) = Net Cost of proposed CV averaged over life ($/CV/a) / Net Potential Emissions Reductions per CV (tCO2e/CV/a) Net Cost of Carbon Reduced Net Cost of Carbon ($/CO2e) = Cost of Carbon Reduced ($/CO2e) less Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Black carbon emissions included through separate activity Net Potential Emissions Reductions per CV per year (tCO2e/CV/a) = Average km travelled (km/CV/a) X [Current Emissions Factor per km traveled (including material and operations emissions), (tCO2e/km) - Proposed Emissions Factor per km traveled (including material and operations emissions) (tCO2e/km)] Net Cost of proposed CV averaged over life ($/CV/a) = (Equivalent net annual Capital Cost of proposed CV ($/CV/a) + maintenance and or infrastructure ($/CV/a)) – (Equivalent net annual Capital Cost of current CV ($/CV/a) + maintenance and or infrastructure ($/CV/a)) Savings per ton of CO2e reduced ($/CO2e) = Average annual km travelled per CV (km/CV/a) X [ [(Cost of Current Energy per ($/km) – Cost of New Energy per ($/km)] + any Cost of New Energy per ($/km)] / Potential Emissions Reductions per CV (tCO2e/CV/a) 14 ACTIVITY 2B: SOLID WASTE MANAGEMENT - COMPOSTING OF ORGANICS FROM LANDFILL Potential Carbon Reductions (excludes potential environmental, public safety, and agricultural benefits) Total Emissions Reduction for Organic Waste (tCO2e/a) = Organic Waste (OW) Diverted from Landfill (tOW) X Net Reduction of CO2e Emission per ton (tCO2e/tOW) Cost Cost of Carbon Reduction ($/tCO2e) = Cost of Composting ($/tOW) / CO2e Reductions of Organic Waste (tCO2e/tOW) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/tCO2e) = Cost of Carbon Reduced ($/tCO2e) less Savings per ton of CO2e reduced ($/tCO2e) Estimates & Assumptions Potential Organic Waste (OW) that is compostable that can be diverted from landfill sites (tOW) derived from the % of Organic Waste in the Solid waste stream that is not already being composted or managed in another form; Net Reduction of CO2e (tCO2e/tOW) = CO2e of other greenhouse gasses reduced, including methane resulting from composting activity (tCO2e/tOW), +/- CO2e emissions emitted or sequestered as a result of the composting process respectively (tCO2e/tOW). Cost of Composting ($/tOW) = Capital Cost of the composting facility divided by the annual processing capacity in tons($/tOW) + operating and maintenance cost ($/tOW) (excluding transport to site) Savings ($/tCO2e) = Savings of Compost activity includes the avoided disposal fees ($/tOW) + (Revenue from sales of finished compost ($/a) / Organic Waste processed (tOW)) / Net Reduction emissions (tCO2e/tOW) 15 ACTIVITY 2C: SOLID WASTE MANAGEMENT - LANDFILL GAS (LFG) CAPTURE / USE Potential Carbon Reductions (excluding potential safety benefits) Total Emissions Reduction Potential for LGF (tCO2e/a) = Annual Tons of Solid Waste (SW) going to Landfill (tSW/a) X Net Emissions Reduction Potential (tCO2e/tSW) Cost Cost of Carbon Reduction ($/tCO2e) = Cost of LFG Capture ($/tSW) / CO2e Reductions Potential of LFG (CO2e/tSW) Net Cost of Carbon Reduced (with GWP of methane – 86 over 20 years) Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) less Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Net Emissions Reduction Potential (tCO2e/tSW) = [Landfill gas emissions (tCO2e/tSW) + (Methane Emissions (tCH4/tSW) X Global Warming Potential Emissions Factor for CH4 (GWP) (tCO2e/tCH4)) x GWP (tCO2e/tBC))] - Carbon equivalent emissions from the capture or use of the LGF (tCO2e/tSW) Cost of Carbon Reduced per ton ($/tCO2e) = [(Capital cost of LFG capture facility ($C/a) / tons of SW capacity per year (tSW/a)) + facilities Operating ($/tSW)] / Emissions Reduction potential (tCO2e/tSW) Savings Potential of CO2e reduced ($/CO2e) = [(Potential revenue from the LFG (kWh/a) X price of energy ($/kWh)) / tons of SW per year (tSW/a)] / Net Emissions Reduction potential (CO2e/tSW) 16 ACTIVITY 2D: COMMUNITY LEVEL RENEWABLE ENERGY Potential Carbon Reductions Carbon Reduction Potential (tCO2e) = Size of Renewable Energy project (kWh/a) X Net Emissions Reduction Potential energy system (tCO2e/kWh) Cost Cost of Carbon ($/tCO2e) = Cost of Renewable Energy System ($/kWh/a) / Net Emissions Reduction Potential of energy system (tCO2e/kWh) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Potential Savings of CO2e reduced ($/CO2e) Estimates & Assumptions Assumes the system offsets existing energy production and not additional new production. If net new energy production, then cost of new fossil fuel system energy generation system included in calculations for net cost. Energy storage not included. Net Emissions Reduction from potential energy system (tCO2e/kWh) = Emissions factor of current energy system (Scope 1,2,3) excluding previous construction (tCO2e/kWh) - Emissions factor of proposed Renewable Electricity system (Scopes 1,2,3) (tCO2e/kWh) including emissions associated with manufacture and maintenance. (tCO2e/kWh). Cost of Renewable Energy System ($/kWh) = Annualized Capital Cost of Renewable energy system ($/kWh) (excluding residual value) + maintenance of system ($/kWh) Potential Savings per ton CO2e reduced ($/tCO2e) = Cost of Current Electrical Energy being offset ($/kWh) / Net Emission Reduction Potential (tCO2e/kWh) 17 ACTIVITY 2E: STREET LIGHTING – ENERGY EFFICIENCY IMPROVEMENT Potential Carbon Reductions Carbon Reduction Potential (tCO2e) = Number of Street Lights (#SL) X Energy Reduction Potential (kWh/SL/a) X Emissions factor of electricity (tCO2e/kWh) Cost Cost of Carbon per ton reduced ($/tCO2e) = Cost of Street Light ($/SL/a) / Annual emissions Savings per SL (tCO2e/SL/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings from CO2e reduced ($/CO2e) Estimates & Assumptions Energy Reduction Potential (kWh/SL/a) = Energy Use per Street Light (SL) (kW) X hours used per day (H/day) X 365 days per year X Energy efficiency improvement from current light to proposed light (%) Cost of Street Light Energy Efficiency ($/SL/a) = Annual capital cost of proposed street lights ($/SL/a) + annual maintenance ($/SL/a) Emissions Savings per SL (t CO2e/SL/a) = Energy Reduction Potential (kWh/SL/a) x Emissions factor of electricity (t CO2e/kWh) (assuming using the same energy source) Potential Savings per ($/t CO2e) = Energy Efficiency Reduction Potential (kWh/SL/y) X Cost of Energy ($/kWh) / Emissions savings per SL per year (tCO2e/SL/a) 18 ACTIVITY 2F: METHANE MITIGATION – COMMUNITY-WIDE PROGRAM Potential Carbon Reductions (CO2e from methane) Carbon Reduction Potential (tCO2e) = Current practice X Carbon Reduction Potential (CO2e) Cost Cost per ton reduced ($/tCO2e) = Annual cost of activity ($/a) / Emissions reductions (tCO2e/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Key focus: (i) organic waste (landfill gas avoidance and/or collection and combustion; composting/digestion; improved collection – avoiding anaerobic digestion in waterways; urban livestock management [in addition to activities outlined in Activities 2B and 2C]); (ii) wastewater treatment – avoidance, collection and combustion of methane, and; (iii) reduced fugitive emissions in gas pipelines and appliances. Calculated case-by-case 19 ACTIVITY 2G: BLACK CARBON REDUCTION – COMMUNITY-WIDE PROGRAM Potential Carbon Reductions (CO2e from black carbon) Carbon Reduction Potential (tCO2e) = Current practice X Carbon Reduction Potential (CO2e) Cost Cost per ton reduced ($/tCO2e) = Annual cost of activity ($/a) / Emissions reductions (tCO2e/a) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Key focus: (i) solid waste management (reduced open burning); (ii) reduced burning of crop residue and forests (within and near to city); (iii) improved manufacturing practices, e.g. brickmaking, and (iv) improved efficiency of internal combustion engines. Calculated case-by-case 20 CATEGORY 3: LOW-CARBON TRANSPORT ACTIVITY 3A: SUSTAINABLE PUBLIC TRANSPORT SUBWAY LIGHT RAPID TRANSIT (LRT) BUS RAPID TRANSIT (BRT) Potential Carbon Reductions (excludes benefits of improved mobility, e.g. economic and health) Carbon Reduction Potential (t CO2e/a) = Potential Number of Reduced Vehicle Kilometers Traveled (km/a) X Net Carbon Emissions Reduction in transport modes per passenger (tCO2e/p-km) Cost Cost of Carbon ($/tCO2e) = Cost of Subway or LRT per passenger km ($/p-km) / Net Carbon Emissions Reduction (tCO2e/p-km) Net Cost of Carbon Reduced Net Cost of Carbon Reduced = Cost of Carbon Reduced ($/CO2e) less Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Net Carbon Emissions Reduction in transportation mode (t CO2e/km/p) = (Emission Factor of Current Personal Vehicle per km (t CO2e/km) / Average number of people in a Personal Vehicle (PV A#p)) – Emission Factor (Subway-LRT-BRT) Vehicle per passenger km (tCO2e/p-km) Cost of Subway or LRT averaged over system life per passenger km ($/p-km) = Equalized annual Capital Cost of Subway LRT-BRT system averaged over life per passenger km ($/p-km) + annual operation and maintenance cost ($/p-km) Potential Savings ($/tCO2e) = Savings of Reduced Personal Vehicle Kilometers Traveled per passenger ($/p- km) / Net Emissions Reduction in transport mode per passenger (tCO2e/p-km) Note: For improved accuracy, Carbon Life cycle analysis of material and energy sources should be included in calculations. ACTIVITY 3B: SUSTAINABLE PUBLIC TRANSPORT – RIDE SHARE 21 Potential Carbon Reductions Carbon Reduction Potential (tCO2e) = Potential Number of Reduced Vehicle Kilometers Traveled (km/a) X Net Carbon Emissions Reduction Potential by Passengers (p) (tCO2e/km/p) x Current average number of People per Personal Vehicle (C #p) Cost Cost of Carbon per ton reduced ($/t CO2e) = Cost of Ride Share averaged over life per passenger km ($/km/p) / Net Carbon Emissions Reduction Potential per passenger (t CO2e/km/p) Net Cost of Carbon Reduced Net Cost of Carbon Reduced = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Net Carbon Emissions Reduction Potential (t CO2e/km/p) = (Emission Factor of Vehicle per km (t CO2e/km) / Current average number of passengers (C #p)) – (Emission Factor Vehicle per km (t CO2e/km) / Potential average number of passengers (P #p)). Cost of Ride Share averaged over system life per passenger km ($/km/p) = Equalized annual Capital Cost of Ride Share program averaged over life per passenger km ($/km/a/p) + annual operation and maintenance cost ($/km/a/p) Potential Savings ($/t CO2e) = Cost of Reduced Personal Vehicle Kilometers Traveled per passenger ($/km/p) / Net Emissions Reduction Potential per passenger (t CO2e/km/p) 22 ACTIVITY 3C: SUSTAINABLE PUBLIC TRANSPORT – EVS PUBLIC VEHICLES Potential Carbon Reductions Carbon Reduction Potential (t CO2e) = Potential Number of Reduced Vehicle Kilometers Traveled (km/a) X Net Carbon Emissions Reductions (t CO2e/km) Cost Cost of Carbon per ton reduced ($/t CO2e) = Net Cost of EV Vehicle & Infrastructure averaged over life ($/km) / Net Carbon Emissions Reduction (t CO2e/km) Net Cost of Carbon Reduced Net Cost of Carbon Reduced ($/CO2e) = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Assuming public vehicle needs to be purchased and the option is between current vehicle and electric equivalent vehicle. Net Carbon Emissions Reduction Potential (t CO2e/km) = Emission Factor of Current Vehicle per km Current Fuel including material, maintenance and operations (t CO2e/km) – Emission Factor Vehicle per km on Electrical Grid including material, charging infrastructure, maintenance and operations (t CO2e/km) Emission Factor of Current Vehicle per km Current Fuel including material, maintenance and operations (t CO2e/km) = (Emissions Factor of Fuel (t CO2e/l) / Vehicle Efficiency (km/l)) + equalized annual emissions of the material to make and maintain the vehicle (t CO2e/km) Emission Factor of Vehicle per km on Electrical Grid (t CO2e/km) = (Emissions Factor of Electricity Grid (t CO2e/kWh) / Vehicle Efficiency (km/kWh)) + equalized annual emissions of the material to make and maintain the vehicle (t CO2e/km) Net Cost of EV Vehicle & Infrastructure averaged over life ($/km) = (Equalized annual Capital Cost of Electric Vehicle averaged over life ($/km) + Equalized annual Capital Cost of Charging Infrastructure averaged over life($/km) + Maintenance ($/km)) – (Equalized annual Capital Cost of Current Vehicle averaged over life ($/km) + Equalized annual Capital Cost of Infrastructure averaged over life($/km) + Maintenance ($/km)) Potential Savings ($/t CO2e) = (Savings from Reduced Fuel ($/km) / Net Carbon Emissions Reduction (t CO2e/km) Savings from Reduced Fuel ($/km) = Cost of Fossil fuel per km ($/km) – Cost of Electricity per km ($/km) 23 ACTIVITY 3D: SUSTAINABLE PUBLIC TRANSPORT – EV INCENTIVE TO PRIVATE SECTOR Potential Reductions Carbon Reduction Potential (t CO2e) = Potential Number of Reduced Vehicle Kilometers Traveled with Incentive (km/a) X Net Carbon Emissions Reduction Potential (tCO2e/km) Cost Cost of Carbon per ton reduced ($/t CO2e) = Cost of EV Vehicle & Infrastructure Incentive averaged over life ($/km) / Net Carbon Emissions Reduction Potential (t CO2e/km) Net Cost of Carbon Reduced Net Cost of Carbon Reduced = Cost of Carbon Reduced ($/CO2e) - Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions Net Carbon Emissions Reduction Potential (t CO2e/km) = Emission Factor of Current Vehicle per km Current Fuel including material, maintenance and operations (t CO2e/km) – Emission Factor Vehicle per km on Electrical Grid including material, charging infrastructure, maintenance and operations (t CO2e/km) Emission Factor of Current Vehicle per km Current Fuel including material, maintenance and operations (t CO2e/km) = (Emissions Factor of Fuel (t CO2e/l) / Vehicle Efficiency (km/l)) + equalized annual emissions of the material to make and maintain the vehicle (t CO2e/km) Emission Factor of Vehicle per km on Electrical Grid (t CO2e/km) = (Emissions Factor of Electricity Grid (t CO2e/kWh) / Vehicle Efficiency (km/kWh)) + equalized annual emissions of the material to make and maintain the vehicle (t CO2e/km) Cost of EV Vehicle & Infrastructure Incentive averaged over life ($/km) = Equalized annual cost of Vehicle Incentive averaged over life ($/km) + Equalized annual cost of Charging Infrastructure Incentive averaged over life($/km) Potential Savings ($/t CO2e) = (Savings of Reduced Fuel ($/km) + Savings of Reduced Maintenance ($/km)) / Net Carbon Emissions Reduction (t CO2e/km) Savings of Reduced Fuel ($/km) = Cost of Fossil fuel per km ($/km) – Cost of Electricity per km ($/km) Savings of Reduced Maintenance ($/km) = Maintenance Cost Fossil Fuel Vehicle & Infrastructure ($/km) – Maintenance Cost Electric Vehicle & Infrastructure ($/km) 24 ACTIVITY 3E: SUSTAINABLE PUBLIC TRANSPORT – CONGESTION PRICING Potential Carbon Reductions (excluding benefits from improved mobility) Carbon Reduction Potential (t CO2e/a) = Potential Number of Reduced Vehicle Kilometers Traveled resulting from Congestion Pricing (km/a) X Net Carbon Emissions Reduction per passenger (t CO2e/p-km) Cost Cost of Carbon per ton reduced ($/t CO2e) = Cost of The Congestion Pricing Per km Reduced ($/p-km) + Cost of Public Transport ($/p-km) / Net Carbon Emissions Reduction (tCO2e)p-km) Net Cost of Carbon Conserved/Reduced Net Cost of Carbon Reduced = Cost of Carbon Reduced ($/CO2e) – Potential Savings per ton of CO2e reduced ($/CO2e) Estimates & Assumptions People in personal vehicle will take most convenient public transportation mode to work to avoid congestion fees; Average of available public transit systems will be used to calculate the emissions factor per km per passenger in below calculations. Net Carbon Emissions Reduction per Passenger (t CO2e/km/p) = (Emission Factor of Current Vehicle per km (tCO2e/km) / Current average number of people per Personal Vehicle (PV A#p)) – Emission Factor Avg Public Transit Vehicle per person km (t CO2e/p-km) Reduction % = Potential Number of Reduced Personal Vehicle Kilometers Traveled resulting from Congestion Pricing (km) / Current Personal Vehicle Kilometers Travelled in the Proposed Congestion Charge Zone (km) Cost of Congestion Pricing Per km Reduced per passenger ($/p-km) = Congestion Charge ($/p-km) * (1 - Reduction%) / Reduction% Potential Savings per ton CO2e ($/t CO2e) = (Savings of fossil fuel Reduced ($/p-km) + Savings of Reduced Maintenance ($/p-km)) / Net Carbon Emissions Reduction (t CO2e/p-km) 25 2. Emissions inventories and Sankey diagrams Istanbul Table 3 - Emissions inventory, Istanbul, Turkiye GPC ref No. GHG Emissions Source (By Sector and Sub-sector) Total GHGs (Million tons CO2e) Scope 1 Scope 2 Scope 3 I STATIONARY ENERGY I.1 Residential buildings 13 5 I.2 Commercial and institutional buildings and facilities 9 7 I.3 Manufacturing industries and construction 5 11 I.4.1/2/3 Energy industries I.4.4 Energy generation supplied to the grid I.5 Agriculture, forestry and fishing activities 2 1 I.6 Non-specified sources 3 I.7 Fugitive emissions from mining, processing, storage, and transportation of coal I.8 Fugitive emissions from oil and natural gas systems SUB-TOTAL 32 25 0 II TRANSPORTATION II.1 On-road transportation 15 0.1 II.2 Railways 0.2 II.3 Waterborne navigation II.4 Aviation 1 II.5 Off-road transportation 0.2 \ 16 0 0 III WASTE III.1.1/2 Solid waste generated in the city 3 III.2.1/2 Biological waste generated in the city III.3.1/2 Incinerated and burned waste generated in the city III.4.1/2 Wastewater generated in the city III.1.3 Solid waste generated outside the city III.2.3 Biological waste generated outside the city III.3.3 Incinerated and burned waste generated outside city III.4.3 Wastewater generated outside the city SUB-TOTAL 3 0 IV INDUSTRIAL PROCESSES and PRODUCT USES IV.1 Emissions from industrial processes occurring in the city boundary 13 IV.2 Emissions from product use occurring within the city boundary SUB-TOTAL 0 13 V AGRICULTURE, FORESTRY and OTHER LAND USE V.1 Emissions from livestock 12 V.2 Emissions from land V.3 Emissions from aggregate sources and non-CO2e emission sources on land SUB-TOTAL 0 12 VI OTHER SCOPE 3 VI.1 Energy not included In I.7 & I.8 VI.2 Building Material VI.3 Food not included in V VI.4 Mobility / Connectivity not included in II.5 VI.5 Water VI.6 Waste/Sewage Management not included in III VI.7 Key Infrastructure VI.8 Other Scope 3 SUB-TOTAL 0 TOTAL 51 25 25 26 Figure 2 - Sankey diagram, Istanbul, Turkiye 27 Bogota Table 4 - Emissions inventory, Bogota, Colombia GPC ref No. GHG Emissions Source (By Sector and Sub-sector) Total GHGs (Million tons CO2e) Scope 1 Scope 2 Scope 3 I STATIONARY ENERGY I.1 Residential buildings 2 1 I.2 Commercial and institutional buildings and facilities 1 1 I.3 Manufacturing industries and construction 5 1 I.4.1/2/3 Energy industries I.4.4 Energy generation supplied to the grid I.5 Agriculture, forestry and fishing activities 0.05 I.6 Non-specified sources 0.2 I.7 Fugitive emissions from mining, processing, storage, and transportation of coal I.8 Fugitive emissions from oil and natural gas systems SUB-TOTAL 7 4 0 II TRANSPORTATION II.1 On-road transportation 8 0.01 II.2 Railways II.3 Waterborne navigation II.4 Aviation 1 II.5 Off-road transportation SUB-TOTAL 9 0.01 0 III WASTE III.1.1/2 Solid waste generated in the city III.2.1/2 Biological waste generated in the city III.3.1/2 Incinerated and burned waste generated in the city III.4.1/2 Wastewater generated in the city III.1.3 Solid waste generated outside the city III.2.3 Biological waste generated outside the city III.3.3 Incinerated and burned waste generated outside city III.4.3 Wastewater generated outside the city SUB-TOTAL 0 0 IV INDUSTRIAL PROCESSES and PRODUCT USES IV.1 Emissions from industrial processes occurring in the city boundary 2 IV.2 Emissions from product use occurring within the city boundary SUB-TOTAL 0 2 V AGRICULTURE, FORESTRY and OTHER LAND USE V.1 Emissions from livestock 11 V.2 Emissions from land 6 V.3 Emissions from aggregate sources and non-CO2e emission sources on land 1 SUB-TOTAL 0 19 VI OTHER SCOPE 3 VI.1 Energy not included In I.7 & I.8 VI.2 Building Material VI.3 Food not included in V VI.4 Mobility / Connectivity not included in II.5 VI.5 Water VI.6 Waste/Sewage Management not included in III VI.7 Key Infrastructure VI.8 Other Scope 3 SUB-TOTAL 0 TOTAL 16 4 21 28 Figure 3 - Sankey diagram, Bogota, Colombia 29