The Economics of Low Carbon Cities:Exploring the Opportunities for

and Limits of Green Growth

Andy Gouldson, Sarah Colenbrander, Andrew Sudmant, Effie Papargyropoulou,

Faye McAnulla, Niall Kerr, Paola Sakai and Stephen Hall

School of Earth and EnvironmentUniversity of Leeds, UK

E-mail: s.colenbrander@leeds.ac.ukwww.climatesmartcities.org

Our Approach

1. Build a baseline of ‘business as usual’ trends to project energy use, energy bills and carbon emissions.

1. Identify lists of low carbon measures that could be adopted in each sector.

1. Collect realistic data on the costs, benefits and lifetimes of measures.

1. Calculate scope for deployment of each measure.

1. Aggregate all of the above to build a ‘macro’ (city scale) picture of investment needs, payback periods and carbon savings.

The Climate Smart Cities Programme

UK - Leeds, Sheffield, Birmingham, Hull

Peru – LimaBrazil – Recife

Malaysia – Johor BahruIndonesia – Palembang

China – Beijing, Tianjin, Shanghai

India – KolkataRwanda – Kigali

Most cost-effective ($/tCO2)Most cost-effective ($/tCO2)

1. Solar water heaters with FiT (94)2. 4kW solar panels with FiT (85)3. Banning incandescent light bulbs (57)4. Raising thermostat 1C (43)5. Entertainment appliances – standby (42)6. More efficient air conditioners (39)7. 4kW solar panels (38)8. Turning off lights (36)9. Green Building Standards (35)10. More efficient water heaters (32)

Most carbon-effective: (ktCO2)Most carbon-effective: (ktCO2)

1. More efficient air conditioners (6,003)

2. More efficient entertainment appliances (3,529)

3. Turning off lights (3,519)4. Retrofitting insulation to 10% of

households (2,494)5. More efficient water heaters (2,205)6. Entertainment appliances – standby

(1,710)7. Banning incandescent light bulbs

(1,426)8. Raising thermostat 1˚C (1,174)9. Installing 10MW of 4kW solar panels

(887)10. Installing solar water heaters on

10% of households (852)

Example – domestic sector in Kolkata, India

1. Waste prevention (58)2. Centralised compositing (52)3. Landfill gas utilisation (27)4. Energy from waste – Combined

Heat and Power (6)

1. Landfill gas utilisation (3,802)2. Energy from waste – Combined

Heat and Power (3,414)3. Centralised composting (732)4. Waste prevention (118)

Most cost-effective ($/tCO2)Most cost-effective ($/tCO2) Most carbon-effective: (ktCO2)Most carbon-effective: (ktCO2)

Example – waste sector in Palembang, Indonesia

Results – Cost-effective carbon saving potential

Results – Costs and benefits

Johor Bahru, Malaysia

Lima, Peru

Palembang, Indonesia

Kolkata, India

Investment needs (US$ billion)

1.0 5.0 0.4 2.0

Investment needs (% of city GDP)

3.7 7.5 8.8 6.3

Annual savings (US$ billion)

0.8 2.1 0.4 0.5

Annual savings (% of city GDP)

2.9 3.2 9.5 1.7

Payback period(years)

1.3 2.4 <1 3.9

Carbon savings in 2025 (MtCO2-e)

9.4 3.5 3.2 7.6

Carbon savings in 2025 (% of BAU)

24.2 14.7 24.1 20.7

Results – Global relevance

If 71–76% of energy‐related CO2 emissions come from cities (IPCC, 2014),

and these could fall by 14-24% through cost effective investments, then very cautiously we might predict that at the global scale carbon

savings from such investments could generate reductions in the range of

10-18% in global anthropogenic energy-related CO2 emissions in 2025.

The Time to Regain BAU Levels (The TREBLE Point) After Investment

Lima: TREBLE point of 7 Kolkata: TREBLE point of 15

The Time to Regain BAU Levels (The TREBLE Point) After Investment

The TREBLE point measures the number of years for carbon emissions to reach the BAU level predicted for 2025 after investment in low carbon measures has taken place.

Investing in cost-effective low carbon measures would mean that these cities reach BAU levels of emissions forecast for 2025 between 7 and 15 years later than they would have done without those investments.

Johor Bahru, Malaysia

Lima, Peru

Palembang, Indonesia

Kolkata, India

TREBLE point 11 7 8 15

Conclusions

There is potential for green growth to help cities in developing countries achieve low carbon development paths. Exploiting this potential could unlock progress on climate change at a global scale.

Institutional innovations are likely to be needed to unlock this potential and to govern early stage transitions.

But green growth may only lead to partially decarbonised cities. And the benefits of green growth are likely to be rapidly eroded by continued growth.

Later stage transitions are likely to require structural changes in the form and function of cities as well as their efficiency.

Further reading

Gouldson A, Colenbrander S, McAnulla F, Sudmant A, Kerr N, Sakai P, Hall S, Kuylenstierna JCI (2014). Exploring the Economic Case for Low-Carbon Cities.New Climate Economy contributing paper. Available from: http://newclimateeconomy.report

Colenbrander S, Gouldson A, Sudmant AH, Papargyropoulou E, Chau LW, Ho CS (2015) Exploring the economic case for early investment in climate change mitigation in middle-income countries: a case study of Johor Bahru, Malaysia. Climate and Development. In press.

Colenbrander S, Gouldson A, Sudmant AH, Papargyropoulou E (2015) The economic case for low carbon development in rapidly growing developing world cities: A case study of Palembang, Indonesia. Energy Policy. 30 24-25 doi:10.1016/j.enpol.2015.01.020

Gouldson A, Colenbrander S, Papargyropoulou E, Sudmant A (2014) The Economics of Low Carbon Cities: Johor Bahru and Pasir Gudang, Malaysia. Available from: http://www.lowcarbonfutures.org/sites/default/files/Malaysia%20CSC%20Report.pdf

Gouldson A, Colenbrander S, Sudmant A, Papargyropoulou E (2014) The Economics of Low Carbon Cities: Palembang, Indonesia. Available from: http://www.lowcarbonfutures.org/sites/default/files/Palembang%20-%20Full%20Report.pdf

Gouldson A, Kerr N, McAnulla F, Hall S, Colenbrander S, Sudmant A, Roy J, Sarkar S, Ghatak A, Chakravarty D, Ganguly D. (2014) The Economics of Low Carbon Cities: Kolkata, India. Available from: http://www.climatesmartcities.org/sites/default/files/3710_Kolkata_Full_Report)Oct_2014_v12.pdf

Gouldson A, McAnulla F, Sakai P, Sudmant A, Castro S, Ramos C (2014) The Economics of Low Carbon Cities: Lima-Callao, Peru. Available from: http://www.climatesmartcities.org/sites/default/files/ELCC%20Lima%20Report%20Full%20English.pdf