energy and climate policy in new york, paris and shanghai...
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Energy and Climate Policy inNew York, Paris and Shanghai:Lessons for DevelopingCountriespresentation to the World Bank
Stephen A. Hammer and Jeanene MitchellCEMTPP Urban Energy Program4 February 2009
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CEMTPP overview• Home of energy policy concentration at SIPA• Academic program
– Courses on policy, energy geopolitics, energy systems,technology, and dealmaking
– “both side of the balance sheet”• Research program
– Marine Transportation– Global Energy Governance– Urban Energy
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Urban Energy Program• Academic program
– Seminar + workshop• Research program -- energy markets, policy, technology and
regulation, viewed through an urban lens– City-scale system studies (“logic” studies)– Discrete system studies (Microgrids,CHP and renewable power
technology, carbon markets)– Energy impacts of urban land use/transport planning
• Bogota– Building-related energy use– Public opinion– Urban energy system modeling– Urban Energy Academy
• China Mayor’s Training Program on Energy Efficient Cities
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Background – NYC energy system• Power/gas/steam system
– 11,500+ MW peak demand– Load pocket
80% rule 10,300 MW in-city generation capacity
– Largest district steam system in world– Regulated monopoly for gas/electricity
distribution– Competitive supply marketplace (10-
25 ESCOs depending on market)– <3 MW of in-city renewable power but
growing local interest– Highest energy prices in US– Lowest levels of household electricity
use of any major US city (4480kWh/year)
– Highly reliable grid, but spectacularfailures
• Transportation system– 54% of commuters use public
transport (highest rate in US)– More than 50% of households do
not own a car (vs. 8% nationally)– Walking and bicycling account for
21% of all trips around NYC– Nonetheless, traffic a historical
problem• Highest asthma rates in US along
key transport corridors– City a leader on alt-fuel and hybrid
vehicles• Legal challenge to hybrid taxi law
• Waste system– Landfill gas recovery– Wastewater treatment methane-
to-energy
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Key energy policydrivers (NYC)
• Cost containment• Security of supply = huge problem, city will
fall short of required capacity requirementsby 2012
– By 2030, gap = 20-25% of demand– New in-city power plants + transmission lines– “Repower” existing power plants
• Climate change– Diversify supply sources
• 600 MW renewables by 2030• 800 MW CHP by 2030
– Energy efficiency• New Building codes• Education campaigns
– Transport strategies• Congestion pricing (failed)• Infill development• Biodiesel• Taxis
– Urban Heat Island (trees/roofs)– Energy system adaptation
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NYC -- Climate Change a growing imperative
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NYC -- Key takeaways from our research• Security of supply will likely trump all other concerns for long time,
but energy/climate sustainability is now on the local radar screen,and it will be hard to go backwards
• Transmission project = most likely supply solution, due to minimalcommunity impact– Renewables + CHP = don’t expect rapid change due to high installation
cost + interconnection difficulties– Long-term prospects = promising, but large projects (off-shore wind, old
landfill site) = will remain a policy priority due to supply shortfall• NYS legislature refusal to support NYC efforts = highly problematic
– Energy efficiency authority– Surcharge on local energy bills– Congestion pricing
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Background -- Paris energy system• Electricity/gas/district heating and
cooling system– All energy distribution infrastructure
owned by the City, operationscontracted out to EDF/GDF
– Nearly 14,000 GWh of electricitydistributed citywide in 2006
– Per capita energy consumption of~7000 kwh annually
– One of the largest district steamsystems in Europe
– Supply marketplace open to competition(20 ESCOs for electricity, 17 for gas),though EDF/GDF are still the“heavyweights” in the market
– Relatively low energy prices incomparison to other European countriesthanks to reliance on low cost nationalenergy grid = low recourse toDG/renewables
• Transportation system– Extensive public transportation
system: subway, bus, rail– … and bicycles! (Velib’)– 53% of Parisians don’t own a car– Walking accounts for 54% of in-city
trips; public transport for 30%– Traffic still a problem, however
• Less-efficient public transportationoutside the city is primary culprit
• For Paris-suburb trips, 46% occurswith private vehicles and 49% bypublic transport
– 3.6 million trips airplane trips byParisians annually
– 1.8 million tonnes of freight travelingby air
• Waste– 1.9m metric tonnes of waste
consumed by district heating systemannually (exceeds 1.2m metrictonnes generated by city)
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Key energy policy drivers& dynamics (Paris)
• Sustainability and climate preservation– Local Agenda 21
• Climate preservation is primary objective– Plan Climat de Paris
• Establishes emission reductions, energy efficiency, andrenewables targets for municipality and city as a whole
• Renewables = part of sustainability agenda• Energy efficiency in buildings
– “100,000 Buildings” plan– City Hall = lead by example– Eco-quarters development
• Transport strategies– Revamp city roads to accommodate buses and “soft”
forms of transport• Reduce in-city vehicle emissions 60% by 2020
– Improve public transport access between city + suburbs– Air travel by far the largest source of emissions, yet
beyond Paris’ control
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Paris -- Key takeaways from our research
• Paris’ energy policy couched in sustainability, energy efficiency, andemissions reduction / climate protection concerns (e.g., the PlanClimat)– Climate resonates with the public, creating opportunity to ‘repackage’
other energy-relevant initiatives• Buildings and transport sectors = priority focus
– Buildings focus (primarily thermal, but electric too)– Power sector largely carbon free, but a potential future liability?
• Adaptation currently not a significant part of the agenda• DG/renewables: large projects and feasibility studies in the pipeline,
but a general lack of specific timelines for implementation• Local capacity to act: evolving but highly constrained
– Can Mayor deliver on Plan Climat?– BUT, climate issues a catalyst/legitimizer for Paris to expand its energy
policymaking powers vis-à-vis regional/national government
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Background -- Shanghaienergy system
• Constant growth, by almost any metric• 22,000 MWp demand in summer ‘08, of which 14,000 can
be met by local supply– 1/2 of imported power from 3 Gorges Dam– LNG soon to come?
• Coal = 53% of total energy consumption, Oil = 35% (in ‘05)• Renewables = 3 local wind farms (24.4 MWp), but big plans:
300 MWp by 2010– CHP = going nowhere until LNG arrives
• Electricity prices set by user type, time of day, and season– Shanghai authorities have room to adjust prices to influence
demand
Municipality
Population
(millions)
Energy Use
(ton sce)
Energy Use
per capita
(ton sce/
person)
GDP
(billion RMB)
Energy Intensity
(Energy Use/GDP)
China 1314.5 2462.7 1.87 21,192.0 1.16
Shanghai 18.15 89.67 4.94 1,036.6 0.87
Beijing 15.81 59.04 3.73 787.0 0.75
Chongqing 28.08 47.23 1.68 345.2 1.37
Tianjin 10.75 45.25 4.21 434.4 1.04
Source: CEIC [Table CN.RBC02 (Energy Consumption), CN.AA02 (GDP), CN.GE02 (Population)]
Table _
Comparison of City-level Energy Intensity Levels (2006)
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Key building energy policy drivers & dynamics(Shanghai)
• China 20% reduction in energy intensity by 2010 mandate– Local authorities partly responsible for delivering this result
• Can issue policies/regulations, but must “do so in manner consistent with central level mandate”– In Shanghai, slow and steady progress, but unlikely to achieve target
• Lack of consistent message within local government– “National policies, local countermeasures”– Siloed agency responsibilities, hard to ascertain where priorities lie– Corruption?– Local government “report cards” have historically prioritized economic development over
environmental protection• A new energy/enviro report card for mayors?
• Little central government funding to support goals• Market challenges
– Technoloy lock-in (e.g. lack of sufficient natural gas system deployment to sustainwidespread CHP deployment)
– No professional ESCO certification scheme results in customer mistrust– ESCO project financing– Commercial vs. residential buildings = fundamental energy system differences– Market price for fossil fuel-based energy = adjustable by City Hall, but still low compared to
alternatives
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Shanghai -- Key takeaways from our research
• Inconsistent messages by SMG: Dongtan vs. everything else• Lack of decisionmaking transparency by local government + lack of
systematic sustainability message– Developers responding to visible local policy signals– Huge failure to capitalize on multiple opportunities within decisionmaking process
to instill/force change• Low/no market demand for more efficient design or systems
– Huge wealth effect taking place, energy seen as minor (or worthwhile) cost– Standard design practices?– Cultural response to Central government policy approach?
• Immature green/efficiency marketplace has yet to catch up to policy goals• But:
– Local authority has incredible ability to move, and move quickly– Large model projects and eco-cities = helpful but unknown value in shifting
market practices– International “green” development trends coming to Shanghai as way of
differentiating developers from one another
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Lessons for cities in developing countries?• Governance issues
– Master plan appears to deliver greater coherence across siloes– But, cities are “creatures of the state”, typically giving them diminished capacity to
act• China an exception?
– Policy implications:• Devolution of powers to local authorities?
– Only works if local authorities have sufficient resources/knowledge/capacity to use powerswisely
– Focus on capacity building (e.g., JUCCCE mayoral training program, sub-Mayoral leveltraining?)
• “Capacity to Act” assessment?• Local authorities influence provincial/national policy through model of strong local
action?– Unknowns:
• Coherence of global/transnational policy structures (e.g., CDM) with local action?• Level of public participation/involvement?
– Cultural/political acceptability?• Policy complexity & incrementalism?
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Capacity to Act Assessment Process (CTAAP)
Step 1: Establish overall performancegoals/outcomes
Step 2: Assess roles/responsibilitiesof local authorities and other keystakeholders
Step 3: Tailor policy/program optionsbased on capacity to act, resourceavailability, policy preferences
Step 2
Step 3
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Lessons for cities in developing countries?• Policy drivers
– Cities policies/plans vary widely based on policy drivers seen as mostcritical/relevant
• Link energy/climate change to existing policy priorities to enhance public support andimprove funding support prospects
– Climate change adaptation = NOT on radar screen
• Market issues– Unknowns
• Policy planning in an ever-changing market environment?• Market restructuring efforts -- helping or hindering cities?• Utility ownership structures?
• Technology choice– Technology lock-in
• Current infrastructure limitations may affect use of ‘bridge’ technologies• Opportunity for ‘generation-skipping’ technologies?
– Unknowns• Focus on greater self-reliance for power supply (fossil or renewable) or import from
“away”
