Transportation and the Transportation and the CDM: Lessons from ChileCDM: Lessons from Chile

John Drexhage, IISDJohn Drexhage, IISDNovember 29, 2005 Montreal November 29, 2005 Montreal

Transport and Climate ChangeTransport and Climate Change

The transport sector is responsible for The transport sector is responsible for ~~ 25% of 25% of CO2 emissions worldwide. This contribution is CO2 emissions worldwide. This contribution is increasing.increasing.

Key factorsKey factors Travel activity (vehicle kilometers traveled)Travel activity (vehicle kilometers traveled)

Mode splitMode split

Vehicle energy intensity Vehicle energy intensity

Fuel carbon content Fuel carbon content

Energy Sector GHG Emissions 1998

Commercial9%

Electricity34%

Manufacturing23%

Transport33%

Agricultural1%

In Chile, In Chile, transportation transportation represents the represents the 22ndnd largest largest source of GHG source of GHG emissions in the emissions in the energy sector - energy sector - approximately approximately 33%33%

Developing World ContextDeveloping World Context

Doubling of developing cities Doubling of developing cities urban population by 2030urban population by 2030

2 billion new residents2 billion new residentsXX

6 trillion additional vehicle kms/yr6 trillion additional vehicle kms/yr= =

~600 billion additional liters of gasoline/yr~600 billion additional liters of gasoline/yr

or or ~1.9 billion tonnes of GHG yearly, 53% ~1.9 billion tonnes of GHG yearly, 53% greater than today.greater than today.

Transport & CDMTransport & CDM

CDM represents a crucial opportunity to CDM represents a crucial opportunity to develop a sustainable transportation develop a sustainable transportation sector e.g. Chilesector e.g. Chile

- - increased funding flows increased funding flows

- enhanced capacity - enhanced capacity

- expanded technology- expanded technology

Very few projects to date in transport Very few projects to date in transport sector: difficult fit sector: difficult fit

Clean Development MechanismClean Development Mechanism

Goals of the CDM:Goals of the CDM:

1)1) to assist in the achievement of to assist in the achievement of sustainable development for host sustainable development for host countries; andcountries; and

2) to assist developed countries in 2) to assist developed countries in complying with their emissions complying with their emissions reduction commitments under the reduction commitments under the Kyoto Protocol.Kyoto Protocol.

Transport & CDM Project: ChileTransport & CDM Project: Chile

Project Partners: Project Partners: IISD, CCAP, CC&D, CGTSIISD, CCAP, CC&D, CGTSFunded by Canadian International Development Funded by Canadian International Development Agency (CIDA)Agency (CIDA)

Explore the potential to reduce GHGs and Explore the potential to reduce GHGs and promote transportation CDM projects in Chilepromote transportation CDM projects in Chile

Why Chile?Why Chile?- Transport challenges- Transport challenges- Commitment to CDM- Commitment to CDM- Strong modeling capacity - Strong modeling capacity - Excellent data- Excellent data

1) 1) Bus Technology switchBus Technology switch:: Switching from diesel to Switching from diesel to diesel-hybrid electric engines for buses in Santiagodiesel-hybrid electric engines for buses in Santiago

2) 2) Bike InfrastructureBike Infrastructure: : Developing bike lanes, storage, Developing bike lanes, storage, facilitiesfacilities

3) 3) Location EfficiencyLocation Efficiency:: Concentrating mixed-use Concentrating mixed-use developments around metro stationsdevelopments around metro stations

Three case studies examined

Key FindingsKey Findings

1)1) The CDM should accommodate travel demand The CDM should accommodate travel demand reduction efforts as well as policy based and reduction efforts as well as policy based and sectoral approaches.sectoral approaches.

2)2) The project based framework required by the The project based framework required by the current CDM rules is limiting and makes current CDM rules is limiting and makes quantification complicatedquantification complicated

3)3) Most transportation projects do not fit well Most transportation projects do not fit well within the CDM as it currently functionswithin the CDM as it currently functions

Key FindingsKey Findings

4)4) Consideration of emissions reductions Consideration of emissions reductions should be integrated into long term should be integrated into long term transportation planningtransportation planning

5)5) The CDM is only one of many tools to The CDM is only one of many tools to reduce greenhouse gas emissions from reduce greenhouse gas emissions from the transportation sectorthe transportation sector

Observations/themes from the CDM - Observations/themes from the CDM - Transportation Meeting of Experts Tokyo, Japan, Transportation Meeting of Experts Tokyo, Japan,

20032003 Implementability (technology solutions) vs GHG reduction Implementability (technology solutions) vs GHG reduction

effectiveness (land use/public policy/behavioural change solutions)effectiveness (land use/public policy/behavioural change solutions) De Jure vs De Facto De Jure vs De Facto Data collection is a critical firstData collection is a critical first Standardizing baselinesStandardizing baselines Expediting approval procedures for CDM transportation project proposalsExpediting approval procedures for CDM transportation project proposals Clean Air and Other co-benefits – traffic alleviation; quality of lifeClean Air and Other co-benefits – traffic alleviation; quality of life How to build capacity/knowledge between the CDM and transportation How to build capacity/knowledge between the CDM and transportation

communities about prospective cooperation?communities about prospective cooperation? Who owns the credits?Who owns the credits? Role of Unilateral CDM investments?Role of Unilateral CDM investments?

The Development Dividend ProjectThe Development Dividend Project

All the non-climate-related SD benefits (co-All the non-climate-related SD benefits (co-benefits) that might result from a CDM project, benefits) that might result from a CDM project, whether from investment, tech transfer, new whether from investment, tech transfer, new production processes, or new products:production processes, or new products:• Environmental benefits (e.g., better air quality)Environmental benefits (e.g., better air quality)• Economic benefits (e.g., increased employment)Economic benefits (e.g., increased employment)• Social benefits (e.g., better quality of life via energy)Social benefits (e.g., better quality of life via energy)

To be sustainable development, need some To be sustainable development, need some element of all three types of benefits.element of all three types of benefits.

The Development Dividend Project aims to help The Development Dividend Project aims to help the CDM better deliver these benefits.the CDM better deliver these benefits.

The Development DividendThe Development Dividend

30 members from government, 30 members from government, multilateral institutions, business/industry multilateral institutions, business/industry and research institutes. Aims to:and research institutes. Aims to:– – identify and assess approaches and identify and assess approaches and strategies for the CDM to support the strategies for the CDM to support the provision of the Development Dividend.provision of the Development Dividend.- present findings to negotiators, CDM EB - present findings to negotiators, CDM EB and key stakeholders.and key stakeholders.- provide a solid foundation for shaping the - provide a solid foundation for shaping the evolution of the CDM.evolution of the CDM.

The Development DividendThe Development Dividend

Three Upcoming Papers: Three Upcoming Papers: • Defining the Development Dividend• Changing the Rules for a Development

Dividend • Financing the Development Dividend

Gracias!Gracias!

Final report available at:http://www.iisd.org/climate/south/ctp.asp

John Drexhage

jdrexhage@iisd.ca

Tel: +1-613-238-9820