1. 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 Environment University of Leeds, UK E-mail: s.colenbrander@leeds.ac.uk www.climatesmartcities.org

2. 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.

3. The Climate Smart Cities Programme UK - Leeds, Sheffield, Birmingham, Hull Peru – Lima Brazil – Recife Malaysia – Johor Bahru Indonesia – Palembang China – Beijing, Tianjin, Shanghai India – Kolkata Rwanda – Kigali

4. Most cost-effective ($/tCO 2 ) 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: (ktCO 2 ) 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

5. 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 ($/tCO 2 ) Most carbon-effective: (ktCO 2 ) Example – waste sector in Palembang, Indonesia

6. Results – Cost-effective carbon saving potential

7. Results – Costs and benefits Johor Bahru, Malaysia Lima, Peru Palembang, Indonesia Kolkata, India Investment needs (US$ billion) 1.05.00.42.0 Investment needs (% of city GDP) 3.77.58.86.3 Annual savings (US$ billion) 0.82.10.40.5 Annual savings (% of city GDP) 2.93.29.51.7 Payback period (years) 1.32.4<13.9 Carbon savings in 2025 (MtCO2-e) 9.43.53.27.6 Carbon savings in 2025 (% of BAU) 24.214.724.120.7

8. 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.

9. The Time to Regain BAU Levels (The TREBLE Point) After Investment Lima: TREBLE point of 7Kolkata: TREBLE point of 15

10. 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 point117815

11. 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.

12. 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