1. Urban CDM
Challenges & Opportunities
Kwi-Gon Kim, Ph. D. (UCL, England)
Secretary General, UEA
Emeritus Professor, Seoul National University

2.  Contents
◆ Why is the Urban CDM Needed Urgently?
◆ What is the Urban CDM?
◆ What has been done?
◆ What is suggested Roadmap?
◆ What are Main Challenges
for the Implementation of the Urban CDM and Low-
Carbon Green City?
◆ Conclusions & Suggestions
1

3. 1. Why is the Urban CDM Needed Urgently?
 Cities are main sources of global GHG emissions and
a major pollutant
- 50% of the world’s population now lives in cities. By 2050, three out
of four people are expected to live in urban areas, due to urban
migration This is
- Urban areas currently uses 67% of the world’s energy and accounts
for over 71% of global GHG emissions. (World Bank, 2011)
time to
look at
 Less than 1% of projects registered with the CDM the
are credited to cities.
- Interrelated “Cross-Project” and “Cross-Sectoral” approaches are not
CDM
implemented, even in the case of reduction activities of for the
methodologies approved by UNFCCC.
whole
 Efforts to reduce GHG emissions : The impact is marginal city.
- Due to financial vulnerability of developing countries, efforts to
reduce GHG emissions and investment in environment protection are
economic burden for cities in developing countries.
2

4. 2. What is the Urban CDM?
 Urban CDM is a mechanism which gives financial incentives
and provides Certified Emission Reductions(CERs) as much as
amount of emission reduction at the city-scale compared with
baseline emissions at the city level.
 Therefore, it can be used as a political carbon decision support
system both for green growth and economy and for urban
planning and management.
 Rationale behind the Urban CDM
- A tool for carbon financing : market-based mechanism
- A tool for Low Carbon Green City : urban metabolism-based
mechanism
- A tool for 3Cs(Carbon Centered Comprehensive) planning :
land-use based mechanism
3

5. - Evolution of CDM
Single CDM Project Guide & Tool
Kit
Bundling Guide & Tool
Kit
CDM PoA Guide & Tool
Kit
Multiple PoA Guide & Tool
Kit
How to expand
CDM Concept into
Urban CDM new, innovative
thinking
4

6. - Comparison of Conventional CDM and
Innovative CDM Methodology
Conventional Innovative
Methodology Methodology
Theoretical ▷ Holistic, integrated, smart
▷ Isolated standalone view
Underpinnings view
▷ Singular project development ▷ Urban planning and
Context framework development framework
▷ Technology and products- ▷ Extension of CDM to include
Scope oriented system policy, planning and governance
▷ Use of existing methods ▷ Combination of existing and
Methods approved by UNFCCC new methods
▷ Considerations for population
Baseline Scenario ▷ Constant level of emission
and economic growth, etc.
5

7. Conventional Innovative
Methodology Methodology
Measurement ▷ Quantification ▷ Quantification and estimation
▷ Tradable certified emission ▷ Aggregated tradable certified
Certification reduction(CERs) at single CDM emission reduction(CERs) at the
project level city-scale and between cities
▷ Carbon markets implemented at ▷ Carbon markets to be
Market the national or regional level implemented at the city level
▷ Tool for 3Cs (Carbon Centered
Tool for Urban ▷ Tool for disconnected
Comprehensive) planning Land-
Planning infrastructure
Use based mechanism
Effectiveness
▷ Project cost-benefit analysis ▷ Carbon balance sheet analysis
Analysis
6

8. 3. What has been done?
3.1. Hosting UEA Summit
In Gwangju, during the period from 11 to 13 October, 2011, more than 1,000
individuals assembled for a summit entitled “Green City, Better City”.
A. Overview
 Period : October 11~13, 2011 (3 days)
 Slogan : Green City, Better City
 Host : Gwangju Metropolitan City, United Nations Environment Programme (UNEP),
City and County of San Francisco
 Participants : 1,024 attendees including domestic and foreign 126 mayors and
delegates
7

9. B. Outcomes
- Major findings of the feasibility study on Urban CDM were
presented.
- Messages to be delivered to G20, COP17, and Rio+20 were
adopted by attending city representatives of Gwangju Summit.
- Agreement on “Global Low-Carbon Green City Award” was
reached.
- Advisory Group Meeting Minutes, Gwangju Summit, was adopted
(Thursday, October 13th, 2011)
For any further information on the key outcomes of the event,
please feel free to visit the following websites.
(1)UEA Website (www.2011uea.com)
(2)UNEP Website (www.unep.org)
(3)World Bank’s Urbanization Knowledge Platform (
www.urbanknowledge.org)
8

10. 3.2. Undertaking Feasibility Study
(1) Objectives of the Feasibility Study
-Can the most relevant sectors responsible for the majority of
carbon emissions in a city be adequately tackled under the current
system?
-Towhat extent do the current CDM rules and procedures allow for
an Urban CDM project?
-What would be required to enable cities to participate further in the
CDM?
-How would the CDM need to be (re-)formed?
-Would other mechanisms may be better suited for enabling carbon
finance in the urban context?
9

11. (2) Approach to the work
1. Mapping of the typical climate footprint of cities
2. Identification of major emission sources
(“Priority Sectors”)
3. Evaluation of CDM methodologies for the urban approach
4. Identification, evaluation of project examples of
urban CDM, incl. case studies
5. Discussion on first steps towards removing barriers
for urban projects, e.g. PoAs
10

12.  Climate footprint of cities
City is a multi-functional complex system.
The proposed urban CDM should not be limited to one sector.
Power
Energy Generation
Supply
Power Economy/
Generation/ Industry
Energy Supply
Economy/ Waste/
Commercial Waste Management/
Buildings City Landfills
Transport/ Residential sector/
Traffic Buildings
Waste/
Waste Management/ Transport/
Landfills Traffic
11

13. (3) Preliminary findings
The Urban Context
-Emission reduction in specific “priority sectors”
-Usually dispersed projects comprising different technologies
-Multiple stakeholders, beneficiaries
-Strong interrelations/mutual interference between sectors, institutions
-Citiesrather follow holistic and policy related approach to reduce emissions,
“Non-technical” projects with large mitigation potential (e.g. urban planning
& policy and carbon governance)
-Limited experience/number of CDM projects so far
12

14. A. CDM Reform
a. Increased standardization
b. Multiple methodology approach
c. Improved interaction of UNFCCC with stakeholders
- Top-down and bottom-up approach
13

15. B. Urban CDM Model
 Here is my framework for the proposed Urban CDM. How I
have arrived this framework is a reflection process of
analyzing and validating documents, which have been
conducted.
 This model is very useful to understand inter-relationships
between energy suppliers and consumers, and between
built form, urban infrastructure and CDM mechanism for
them, in a total holistic manner.
14

16. Individual CDM Project
Feedback
Water and
W aste water
CDM for
Low- Carbon
Renewab le
Energy Super-
Building
CDM for Total CDM for
Low- Carbon
Smart
Low- Carbon
Consum er Urban Factory
<Urban Smart Grid System> CDM
CDM for
Transport Grid
port
Low- Carbon
Solid waste Renewab le Land use and
managem ent Energy
Urban
Spatial CDM for Ecology
Residence
Planning Low- Carbon
H om es System
Solid Waste
Industry Land
Total
Urban <Total Urban CDM Model>
System
Water & Building
W ater waste
Engineering
Transport Urban Facility Feedback
<Integrated Urban Planning
and Management>
15

17. C. Urban CDM Project Registration Procedure
Responsible
Step Activities Agency
1. Development and
- KEI
Registration of New
1. Standardized Urban CDM Registration - UNEP
Methodology
- UEAMA
for Urban CDM
2. Formation of Project Team - UEAMA
2. Planning - World Bank
3. Capacity building/training for UEA member cities - UNFCCC
4. Identification of participating cities
5. Establishment of baseline scenario
6. Calculation of the emissions expected without PoAs
7. Development of Multiple PoAs
8. Formulation of policy actions and development plans
at the city scale
- UEAMA
3. Project Design 9. Preparation of PoAs management plans - World Bank
(Being Planned)
10. Establishment of monitoring methodology to - UNEP
measure the actual level of emissions with PoAs
11. Establishment of aggregation methodology
12. Establishment of quantification and estimation
methodology for cumulative volume of the emissions
reduced with appropriate levels of aggregation
13. Preparation of Project Design Document(PDD)
- UEAMA
4. National Approval 14. Approval of PDD by designated national authority
- World Bank 16

18. C. Urban CDM Project Registration Procedure
Responsible
Step Activities Agency
15. Validation of designated operation entity (DOE)
5. Validation - DOE
16. Request for registration
6. Registration 17. Registration of PDD by CDM Executive Board (CDM EB) - CDM EB
7. Construction &
Operation
18. Monitoring of GHG reduction activities
19. Aggregation of monitoring results of PoAs
- UEAMA
8. Monitoring 20. Quantification or estimation of the cumulative volume of - World Bank
the emissions reduced, compared with the BAU baseline - UNFCCC
level of emissions
21. Preparation of monitoring report (MR)
9. Verification & 22. Verification/certification of monitoring report by DOE &
- DOE
Certification request for issuance
10. Issuance of CERs 23. Issuance of CERs by CDM EB - CDM EB
11. Publication 24. Publication of the report on Urban CDM Joint Program
25. Selling and trading of CERs
12. Post PoA 26. Post-PoA management - UEAMA
Management & - World Bank
Evaluation 27. Periodic evaluation - UNFCCC
28. Final Project Reporting
17

19. 3. 4. Operating International Advisory Group
City has multiple-dimensions. To address these issues, we have created
an Inter-Agency Advisory Group.
 Advisory Group Meeting Minutes on Urban CDM Report
- Main Conclusions and Next Steps
(1) However, in line with discussions at the Summit, the report would explore new
methodology development beyond the current CDM and explore options under
Programmatic Activities (PoA) and NAMAs.
(2) The CDM Report should also look at existing voluntary carbon markets and identify
and explore other efforts for city and urban methodologies.
(3) Dialogue with UNFCCC should continue, to ensure we are going in the right direction
and to maintain institutional support for the Urban CDM efforts.
International Advisory Group Meeting Attending Members
- Thursday, October 13th, 2011
Mr. Kwi-gon Kim(Co-Chair), UEA Gwangju Summit Mr. Marcus Lee, World Bank Group
Mr. Arab Hohallah(Co-Chair), UNEP Mr. Hyoung-gun Wang, World Bank Group
Ms. Soraya Smaoun, UNEP Mr. Guenter Meinert, GIZ
Mr. Young-woo Park, UNEP Ms. Patricia McCarney, University of Toronto
Mr. Rafael Tuts, UN-Habitat Mr. Hyun-woo Lee, KEI
Mr. Ishwaran Natarajan, UNESCO Mr. Jeong-hwan Bae, Chonnam National University
Ms. Anne Isabelle Degryse Blateau, UNDP San Antonio City Government(Observant)
Mr. Christopher Kennedy, OECD
18

20. 3.5. Undertaking an Interim Case Study
 To test the method, we conducted an Urban CDM case study for Gwangju
Metropolitan City in general and Gwangju Multiple PoA as a planned program in
specific.
A. Types of CDM Program of Activities Practiced in Gwangju
- Although Korea is not a mandatory greenhouse gas reduction country, there are many national and
regional measures being enforced. Gwangju has been operating Carbon Bank system, Gwangju Green
Action, and Creation of Low Carbon Apartments as self-measure of greenhouse gas reduction effort.
☞ Multiple Program of Activity
- Gwangju Multiple PoA as a planned Program
Residence PoA : 21
Common Ground PoA : 8 - Saving standby power at home
- Carbon point system by connecting to home automation
- Resource recovery out of - Development of model case and
Common
wastes…etc. 8 roadmap of Low-carbon Green
Village
Residence - Green-home…etc.
Transport-
48 21
ation
Transportation PoA : 9 9
- Establishing Bus Rapid Transit Commercial & Public PoA : 10
System Commercial - Disseminating and fostering High
- Disseminating Telework & Public
efficiency LED
- Expanding Eco-Road…etc. 10
- Tightening low-carbon design when
newly or re-built…etc
19

21. B. CPA Examples being practiced in Gwangju
 Urban Policy CPA : Gwangju City’s GHG Reduction Policy and strategy
 Urban Governance CPA : Carbon Bank System
Grant points by reduction of CO2 Emission to the participants
[Credits granted by Gwangju Bank]
 Urban Technology CPA (Case 2) :
 Urban Technology CPA (Case 1) :
- LFG CDM business of waste landfill (already
- LED (already accredited in Gwangju) accredited in Gwangju)
20

22.  C. The Interim Results : An Illustration
- Estimated cumulative GHG emission reduction by planned programmes during the
period from 2011 to 2020 is shown in figure 2.
<Figure 2> Illustrative GHG Emissions Trajectory for Gwangju City
- While 22,239kilotons of CO2 compared to BAU is projected to be
reduced from 2010 to 2020, lack of Monitoring method and related
institute keeps it from being certified as CDM.
21

23.  The results highlight the presence of very
significant and commercially viable opportunities
for GHG reduction at the city-scale.
Implementing these would generate wider social
and economic benefits(Figure 3).
22

24. <Figure 3> Application of measurable planned reduction activities
(When BAU is cut down by 40% by 2020) - When Urban CDM is
applied which is leading
project that can
comprehensively monitor
by sector, 92.2% of
greenhouse gas emitted
by cities can be gauged.
- According to 10 year
reduction activity
compared to BAU for 6
sectors, greenhouse gas
reduction is 20,505ktCO2
with economic benefit of
72,382,000€ (3.53€/ton)
23

25. 4. What is Suggested Roadmap?
1. Feasibility Study
2. Review by Inter-Agency Advisory Group
2012
3. Development of Urban CDM Framework
2013
4. Development of Methodology for Baseline Scenario, Monitoring and Data Set
5. Establishment of the Volume Target to reduce the Urban GHG emission and
reduction measures (policies/governance/techniques)
6. Case Study applying Urban CDM Methods to verify them.
2014
7. Verification and supplement of the model and manuals (toolkit)
8. Suggestion of Urban Carbon Finance
9. Registration to UNFCCC and certification from it.
Launching Initiative for Global Urban CDM
& Low-Carbon Green Cities
24

26. 5. What are main challenges
for the implementation of the Urban CDM
and Low-Carbon Green City?
 International Agreement
– UNFCCC CDM Executive Board vs Voluntary Carbon Market (NAMAs)
 Financing
– Access to Global Carbon Fund
 Institutional Support for the Urban CDM Efforts
– Local, National and International, Institutional Support
 Capacity Building
- Limited Experience
- CDM Opportunities Biased towards Developed Countries
 Data Availability
- Data for Baseline Scenario and Quantification or Estimation of Emission Reduction
 Communication
- Dialogue among Stakeholders and Beneficiaries
 Legislation related to Emission Trading Scheme at Urban Scale
 Time Framework
- Time-Horizons of Decision Making
- Time Framework for Inventory, Monitoring, Reporting and Verification, CDM Project Cycle
To address new challenges, please spread “Global Urban CDM Initiatives”
25

27. 6. Conclusion & Suggestions
6.1. Conclusions
 Urban CDM is the name given to my belief that the mitigation
of the GHG emissions towards “Low-Carbon Green City” must
be seen in the context of urban development in a holistic
manner and that economic incentives should play a key role
especially in cities of developing countries.
 Through review on best practices in Gwangju and other ticies,
I realized that the role of the city is changing.
 I hope Urban CDM issue will be put to world leaders here in
Rio de Janeiro and be New Agenda for the next 20 years.
 The Summit cannot be addressing environmental, social and
economic problems, but about pointing to practical solutions.
 Please work together to make “Global Urban CDM Iniitiaves”
work!!!
26

28. 6.2. Suggestions on Resolution to be submitted
to UN Secretari General – through Rio+20
 In order to build Low-Carbon Green City, useful and
innovative policies and plans must be developed such as
Urban Clean Development Mechanism (Urban CDM). While
international consent on the Urban CDM needs to be
collected to be recognized as it is valuable, the agreement
should be made on the feasibility of the Urban CDM on its
occasion. In this end, it is strongly appealed that the active
involvement and support to promote Urban CDM for the
sake of low-carbon green city shall be sincerely needed
from international communities, especially from United
Nations.
27

29. Thank you very much
for your kind attention!
Acknowledgements
The ideas of this presentation are meant as parts of an ongoing research
and subject to any changes for improvement. The contents in this
presentation were partly quoted from statistics and related materials
made by UEA, UNEP, and the authority of Gwangju Metropolitan City.