Methodological issues/challenges * 07/16/96 Methodological issues/challenges Transport Sector Projects John Rogers jrogers@trafalgar-mexico.com *

Transport Sector CDM Low-Hanging Fruit Requires “Exotic” Methodologies * 07/16/96 Transport Sector CDM Low-Hanging Fruit Waste & Landfill Mgmt Utilization of Gas Leakage Reduction Electricity Generation Cement Steam Optimization Water Pumping Requires “Exotic” Methodologies More complicated to measure Lower direct rewards than current Low-Hanging Fruit But most rapid growth sector 787 million motor vehicles (73% are cars) in 2002 1.5 billion metric tonnes of CO2e (≈21% of all-sector total) Developing countries will contribute about 60% of the growth in total transport CO2e emissions worldwide, Becomes more important as Low-Hanging Fruit is picked and packed We should prepare the way 11/23/2018 Sources: WardsAuto.com, IPCC, IEA 2000, World Energy Outlook 2000, Peter Wiederkehr and Nadia Caïd, OECD Environment Directorate, August 2002 *

Mexico City BRT Pilot Project * 07/16/96 Mexico City BRT Pilot Project Some existing CDM rules are not fully appropriate for transport projects 11/23/2018 *

Metrobús Insurgentes Pilot BRT Corridor 19.1 km / 34 stations * 07/16/96 Metrobús Insurgentes Pilot BRT Corridor 19.1 km / 34 stations 33 corridors planned 8 immediate 11/23/2018 *

Additionality: - Economic Transport Projects * 07/16/96 Additionality: - Economic Transport Projects Small financial impact of CER revenues NPV of CERs often low Mexico BRT Pilot: 46 kton CO2e p.a. < 6% of Investment (5$/t CO2e, 10 years, 5% interest rate) Public funds are often used Financial barrier analysis can be difficult Projects are often “political” Project as pioneer for sector reforms (price, laws) 11/23/2018 *

Additionality: - Barriers Transport Projects * 07/16/96 Additionality: - Barriers Transport Projects Technological/common practice barriers Operation Barriers (Unions / Confederations) Flag to rally-around and reach consensus Carbon Revenues can finance centralized operational control and monitoring 11/23/2018 *

Additionality Problems Transportation Projects * 07/16/96 Additionality Problems Transportation Projects Whilst a a Pilot project can clearly have barriers to implementation, these will more difficult to argue for each successive implementation; i.e: Pilot BRT corridor (2 years negotiation) Corridor 2 (easiest consensus) Corridor “n” Allowing additionality arguments on Infrastructure projects on a “Bundle of Projects” would make sense to the project developer. Standardization of arguments desirable. 11/23/2018 *

Additionality: - Common Practice Transport Projects The rules of Common Practice are not clear Could critical thresholds be set? i.e: when >20% of mass transport in a city is via BRT then common practice is established For “political” projects, when should similar projects in other zones / cities constitute common practice? Standardization of Arguments desirable 11/23/2018

Dynamic Baseline - 2 dimensions Efficiency Effect: CO2e emissions per output unit Development/ Growth Effect: output Baseline scenario must support growth: without project the activity level will rise by a similar amount 11/23/2018

Dynamic Baseline Activity The NMB format does not easily adapt to a Dynamic Baseline developed from a historic “Status Quo” starting point. Indexing PKT as function of population growth Indexing VKT as a function of vehicle population numbers and usage growth Using measured fleet characteristics in year “n” Such that in year “n”, difference between dynamic baseline and Project activity is: Rebound / New trip Creation Modal Shift / Route changes 11/23/2018

Sustainable Transport Many developing countries and cities have a mass-transport shortfall + further growth in mass-transport will be required to move towards sustainable transport (Motorcycles to Buses, Cars to Buses) Requiring smelting of all removed vehicles is not practical in a growing mass-transport environment 11/23/2018

Sustainable Transport It would be helpful if rules were defined Which units could be used on other routes (Age, Technology, VKT change) Displaced buses not on competing routes Trickle-down mechanism 11/23/2018

Baseline Selection Project as pioneer for sector reforms Urban Transport Infrastructure Projects are often “political” Project as pioneer for sector reforms Can often lead to “Binary” Decisions Invest in this Project Do Nothing (City invests in totally different project) BAU rules could well be different in these projects than for baseline determination of private sector projects Greater clarity in distinction between the baseline determination and additionality test 11/23/2018

Transport Methodologies can be complex 59 Variables / 38 formulae in Mexico City NMB / NMM The “explanation and justification” sections are to assist the assessment by the Meth Panel and EB and are removed from the final version. It would be useful to have a detailed “Explanation” section to aid assimilation of the NMB/NMM by other project participants as a “Stand-alone” document. Two inter-related documents; BL + PA Methodology & Monitoring 11/23/2018

Measurement Uncertainties and Optimization A Clear differentiation is needed between: Expanded Measurement Uncertainty (at lower 95th percentile confidence interval) Ex-ante uncertainties in ERs Measurement Optimization Net Revenues from ER = (BL – PA) – Leakage – Expanded Uncertainty – Measurement Cost 11/23/2018

John Rogers Thank you jrogers@trafalgar-mexico.com * 07/16/96 , . jrogers@trafalgar-mexico.com 11/23/2018 *