74788 V2 Energizing Green Cities in Southeast Asia THREE CITY SYNTHESIS REPORT OVERVIEW ~~~ THE WORLD BANK Australian AID~ Energizing Green Cities in Southeast Asia THREE CITY SYNTHESIS REPORT ~~~ THE WORLD BANK Australian AID~ © 2012 The International Bank for Reconstruction and Development I The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-4 73-1000 Internet: www. worldbank.org All rights reserved This volume is a product of the staff of the International Bank for Reconstruction and Development I The World Bank. The findings, interpretations, and conclusions expressed in this volume do not neces- sarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. The views expressed in this publication are those of the authors and not necessarily those of the Australian Agency for International Development (AusAID). Cover photo credit: Luciano Mortula, Shutterstock Table of Contents- Energizing Green Cities in Southeast Asia Note: The following represents the contents of the full report, Energizing Green Cities in Southeast Asia, Three City Synthesis Report which is included on the CD inserted at the end of this Overview. Foreword ......................................................... vi Acknowledgments ................................................. vii Abbreviations and Acronyms ........................................ viii Key Messages ...................................................... ix Chapter 1: Executive Summary ......................................... 1 Urbanization, Economic Growth, Energy, and Emissions Trends ................................... 2 Understanding the Cities: Energy Use and GHG Emissions ....................................... 4 Sector Diagnostics: Identifying Opportunities ................................................. 9 The Role of Institutions ................................................................ 10 Governance Mechanisms ............................................................... 12 Next Steps ......................................................................... 13 Chapter 2: Introduction and Background ............................... 17 Urbanization, Economic Growth, and Impact on Energy and Greenhouse Gas Emissions ............................................................. 17 Report Structure ..................................................................... 28 Chapter 3: Understanding the Cities: Energy Use and Greenhouse Gas Emissions ......................................................29 City Overview ....................................................................... 29 City Energy Profile .................................................................... 31 City Emissions Profile ................................................................. 36 Chapter 4: Sector Diagnostics: Identifying Opportunities ................. .41 Public Lighting ...................................................................... 41 Transportation ...................................................................... 42 Ciy Government Buildings .............................................................. 45 Solid Waste ......................................................................... 47 Water and Wastewater ................................................................ 49 Power ............................................................................. 52 Identifying City Government Priorities ..................................................... 54 Chapter 5: Governance .............................................. 57 The Importance of Governance .......................................................... 57 Governance of Energy-Related Issues ..................................................... 57 City-Level and National Energy Programs ................................................... 58 City Planning ....................................................................... 61 Governance Mechanisms .............................................................. 62 iii Chapter 6: Sustainable Urban Energy and Emissions Planning: The Way Forward ................................................. .65 City Government Leadership and Commitment to "Green Growth" .............................. 66 Energy and Emissions Diagnostics ........................................................ 67 Goal Setting and Project Prioritization ..................................................... 67 Planning ........................................................................... 70 Implementation ..................................................................... 71 Monitoring and Reporting of Progress ..................................................... 74 The Way Forward ..................................................................... 77 Appendixes 1 Cebu City Background ............................................................ 79 2 Surabaya Background ............................................................. 93 3 Da Nang Background ............................................................ 105 4 Approach and Methodology ....................................................... 119 References and Other Resources .................................... . 121 Figures 1 .1 Urbanization Rate ................................................................. 2 1.2 Changes in Annual Energy Consumption per Capita (1990 and 2009) ......................... 3 1.3 GHG Emissions by Fuel Source ....................................................... 4 1.4 GHG Emissions by End Use .......................................................... 5 1.5 Energy Intensity and GOP per Capita in Select Cities ...................................... 5 1.6 Surabaya Sankey Diagram .......................................................... 6 1.7 Cover Page of TRACE Web-Based Tool ................................................. 7 1.8 Level of Influence of City Governments in Various Sectors .................................. 8 1.9 Primary Energy Consumption by Sector ................................................ 9 1.10 Cover of Sustainable Urban Energy and Emissions Planning Guidebook ....................... 14 1. 11 Sustainable Urban Energy and Emissions Planning Process ................................. 14 2.1 Urbanization, 1950-2050 .......................................................... 17 2.2 World Energy Demand in Cities, 2006 ................................................ 18 2.3 Real GOP Growth Rates in Southeast Asia .............................................. 19 2.4 Oil and Gas Dominate Southeast Asia's Primary Energy Supply Mix, 2009 ..................... 20 2.5 Changes in Annual Energy Consumption and Energy Consumption Per Capita .................. 21 2.6 Changes in Annual Energy Intensity .................................................. 22 2.7 GHG Emissions in Southeast Asia (1990-2000) ......................................... 22 3.1 Locations of the Pilot Cities ......................................................... 30 3.2 Electricity Consumption per Capita Benchmarked against Other Cities Using TRACE, 2010 ......... 31 3.3 Primary Energy Consumption per Unit of GOP Benchmarked against Other Cities Using TRACE, 2010 .............................................................. 31 3.4a Electricity Consumption in Cebu City ................................................. 32 3.4b Electricity Consumption in East Java .................................................. 32 3.4c Electricity Consumption in Da Nang .................................................. 32 3.5 Primary Energy Consumption by Sector ............................................... 33 3.6 Efficiencies in Electricity Generation: Principal Technologies ................................. 33 3.7 Surabaya Sankey Diagram ......................................................... 34 3.8 Carbon Intensity of the Electrical Grid ................................................. 35 3.9a GHG Emissions by Fuel Source ...................................................... 37 3.9b GHG Emissions by End Use ......................................................... 37 iv 3.10 Energy Efficiency and Economic Development (2008) ..................................... 38 3.11 Energy Intensity and GDP per Capita in Select Cities ...................................... 39 4.1 Total Transportation Energy per Capita ............................................... 43 4.2 City Government Buildings Electricity Consumption ...................................... 46 4.3 Percent of Solid Waste Recycled ..................................................... 48 4.4 Electricity Consumed per Cubic Meter of Potable Water Production .......................... 50 4.5 Nonrevenue Water as a Percentage of Total Potable Water Produced ......................... 51 4.6 Transmission and Distribution Performance ............................................. 53 5.1 Overview of Energy Planning System in Da Nang ........................................ 58 5.2 Level of Influence of City Governments in Various Sectors ................................. 59 6.1 "Bending the Curve": Defining a 2020 Energy Saving Goal for an Illustrative City ................ 69 6.2 Energy-Demand Reduction Goals for the Transportation Sector in an Illustrative City ............. 70 6.3 The Principal Components of a Data Production Chain .................................... 76 6.4 Typical Characteristics of Data Management Systems ..................................... 76 A 1.1 Map of Cebu City, Philippines ....................................................... 79 A 1.2 Cebu City Government Structure for Energy-Consuming Agencies ........................... 80 A 1. 3 Cebu City Energy Flows (20 10) ...................................................... 82 A 1.4 Cebu City Energy Consumption by End Use ............................................ 83 A 1.5 GHG Emissions by End Use and Fuel Source ............................................ 84 A2.1 Map of Surabaya, Indonesia ........................................................ 93 A2.2 Surabaya Government Structure for Energy-Consuming Agencies ............................ 94 A2.3 Surabaya Energy Flows (201 0) ...................................................... 96 A2.4 Surabaya Energy Consumption by End Use ............................................. 97 A2.5 GHG Emissions by End Use and Fuel Source ............................................ 98 A3.1 Map of Da Nang, Vietnam ........................................................ 105 A3.2 Da Nang Government Structure for Energy-Consuming Agencies ........................... 106 A3.3 Da Nang Energy Flows (201 0) ...................................................... 107 A3 .4 Da Nang Energy Consumption by End Use ............................................ 108 A3.5 GHG Emissions by End Use and Fuel Source ........................................... 109 Tables 1.1 Summary of Structural and Economic Data for the Pilot Cities ............................... 4 3.1 Summary of Structural and Economic Data for the Pilot Cities .............................. 30 4.1 Public Lighting Performance for Three SUEEP Pilot Cities ................................... 41 4.2 Transportation Sector Performance for Three SUEEP Pilot Cities .............................. 45 4.3 Solid Waste Sector Performance for Three SUEEP Pilot Cities ................................ 47 4.4 Power Sector Performance for Three SUEEP Pilot Cities .................................... 53 4.5 Summary Results of the TRACE Prioritization Process in Da Nang, 2011 ....................... 55 5.1 Summary of Current Pilot City Energy Activities ......................................... 60 5.2 Summary of National Energy Efficiency Policies and Programs for Indonesia, the Philippines, and Vietnam ....................................................... 60 6.1 City-Specific KPis Used in the TRACE ................................................. 75 A 1.1 Cebu City Sector Prioritization Results ................................................. 85 A2.1 Surabaya Sector Prioritization Results ................................................. 99 A3.1 Da Nang Sector Prioritization Results ................................................ 110 Boxes 6.1 Developing Da Nang: The Environmental City ........................................... 68 6.2 Elements of an SUEEP Process ....................................................... 70 v Table of Contents- Sustainable Urban Energy and Emissions Planning Guidebook The following represents the contents of the Sustainable Urban Energy and Emissions Planning Guidebook, A Guide for Cities in East Asia and Pacific Preface ............................................................v Acknowledgments ................................................. vi Abbreviations and Acronyms ......................................... vii Chapter 1: Introduction .............................................. 1 Chapter 2: Commitment ..............................................7 Step 1: Create a Vision Statement ......................................................... 7 Step 2: Establish Leadership and Organization ................................................ 9 Step 3: Identify Stakeholders and Links .................................................... 13 Chapter 3: Urban Energy and Emissions Diagnostics ...................... 17 Step 4: Inventory Energy and Emissions .................................................... 17 Step 5: Catalog Existing Projects and Initiatives .............................................. 24 Step 6: Assess Potential Energy and Emissions Projects ......................................... 26 Chapter 4: Goal Setting .............................................31 Step 7: Make the Case for SUEEP ......................................................... 31 Step 8: Establish Goals ................................................................. 35 Step 9: Prioritize and Select Projects ....................................................... 40 Chapter 5: Planning ............................................... .49 Step 10: Draft the Plan ................................................................. 49 Step 11: Finalize and Distribute the Plan .................................................... 54 Chapter 6: Implementation .......................................... 57 Step 12: Develop Content for High-Priority Projects ........................................... 57 Step 13: Improve Policy Environment ...................................................... 60 Step 14: Identify Financing Mechanisms .................................................... 66 Step 15: Roll Out Projects ............................................................... 75 vi Chapter 7: Monitoring and Reporting ..................................77 Step 16: Collect Information on Projects ................................................... 77 Step 17: Publish Status Report ........................................................... 81 CD-ROM SUEEP Toolkit Organizational Toolkit Documents Stakeholder Documents SUEEP Stakeholder Contact Sheet.doc 2 Stakeholder Consultation Record.doc Sample Letters for SUEEP Process 3 Sample SUEEP announcement from the Mayor.doc 4 Sample letter for data request to Electricity Company. doc Project Assessment Template 5 Blank Project Assessment Sheet.doc 6 Example Project Assessment Sheet.doc Sample Consultant Terms of Reference 7 Sample Consultant TORs.doc a Energy and Emissions Inventory Consultant b Project Assessment Consultant c Energy Planner for Scenario Development Consultant d Project Prioritization Consultant e Graphic Design and Report Writing Consultant f Public Relations and Press Release Consultant g Energy Project Development Consultant Technical Toolkit Spreadsheets A Energy Balance and GHG Inventory Spreadsheet.xls B Project Assessment and Prioritization Toolkit.xls vii Foreword Cities currently account for about two-thirds green urban development. Achieving this vision of the world's annual energy consumption and requires institutional reforms and capacity build- about 70 percent of the greenhouse gas (GHG) ing, including strengthening energy governance at emissions. In the coming decades, urbanization the municipal level. Furthermore, to ensure effec- and income growth in developing countries are tive implementation of their green growth plans, expected to push cities' energy consumption and municipal governments will have to foster alliances GHG emissions shares even higher, particularly and closely collaborate with a coalition of actors where the majority of people remain underserved from the national, state, and local levels, and from by basic infrastructure services and where city civil society and the private sector, who share a authorities are underresourced to shift current commitment to advance the green economy. trajectories. These challenges are facing many cit- The SUEEP framework presented here is ies and hundreds of millions of people in the East designed to facilitate such collaboration and Asia and Pacific (EAP) region, which is experienc- the development of capacity-building programs ing unprecedented rates of urbanization, as the to strengthen energy governance and maximize region's urban population grows almost twice as energy efficiency across municipal sectors, as well fast as the world's urban population. as to help define actions and prioritize investments This report lays out the challenges and pro- in energy efficient infrastructure. For this purpose, poses strategies for sustainable urban energy and this report is accompanied by the Sustainable emissions planning (SUEEP) and development. Urban Energy and Emissions Planning Guidebook: It shows that the above challenges also present a A Guide for Cities in East Asia and Pacific, which unique opportunity for EAP cities to become the provides step-by-step guidance to help a city de- global engines of green growth by choosing energy velop its own energy and emissions plan and link efficient solutions to their infrastructure needs and its aspirations to actionable initiatives to improve avoiding locking in energy-intensive infrastructure energy efficiency and reduce emissions. that has accompanied economic growth in the past. The World Bank is committed to providing The SUEEP studies in the three pilot cities- support to EAP cities for sustainable urban energy Cebu City (the Philippines), Da Nang (Vietnam), and emissions planning, and for mobilizing financ- and Surabaya (Indonesia)-show a clear correla- ing for priority investments in green infrastruc- tion between the scaling up of energy efficiency ture. We look forward to working hand in hand in all major infrastructure sectors and economic with cities to facilitate capacity building and pub- growth. This relationship is recognized by the lic and private investments in programs that help municipal governments in the three pilot cities them achieve their green growth objectives and a and has been incorporated into their visions of sustainable future for the generations to come. John Roome Director Sustainable Development East Asia and Pacific Region The World Bank Group viii Acknowledgments T his report was produced by the Infrastruc- government officials, nongovernmental orgamza- ture Unit of the Department for Sustainable tion and civil society representatives, and the pri- Development in the East Asia and Pacific vate sector. We would like to express particular (EAP) region of the World Bank under the guidance appreciation and gratitude to municipal officials in of John Roome, Director, and Vijay Jagannathan, Cebu City, Da Nang, and Surabaya for their active Sector Manager. participation in the pilot studies and numerous The core team, which was led by Dejan Ostojic, invaluable comments and suggestions. Energy Sector Leader, EAP, comprised Ranjan K. The team acknowledges the valuable contribu- Bose, Holly Krambeck, Jeanette Lim, and Yabei tions of the Energy Sector Management Assistance Zhang. Program (ESMAP, jointly sponsored by the World The team would like to give special recognition Bank and the United Nations Development to the following World Bank staff for their help Program) and Buro Happold Ltd. with the peer review process and for providing The team would also like to thank Sherrie insightful feedback: Jan Bojo, Feng Liu, Jas Singh, Brown for editing the document, Laura C. Johnson Monali Ranade, and Om Prakesh Agarwal. The for providing the graphic design work, and Laurent team also wishes to acknowledge Luiz T.A. Maurer Durix for his contribution on the dissemination of the International Finance Corporation as well as process. David Hawes, Advisor, AusAID, for his contribu- The team would like to acknowledge the con- tion as external peer reviewer. tinued generous support from the government of Important comments and suggestions were Australia, which funds the EAP Energy Flagship also received from Dean Cira, Arish Dastur, Franz Report series. This series includes Winds of Change: Gerner, Franz Drees Gross, Ky Hong, Paul Kriss, East Asia's Sustainable Energy Future (2010); One Nguyet Anh Pham, Dhruva Sahai, Victor Vergara, Goal, Two Paths: Achieving Universal Access to Xiaodong Wang, Paul Wright, and Yijing Zhong, to Modern Energy in East Asia and the Pacific (2011 ); whom we would like to express our appreciation. and the present volumes, Energizing Green Cities During the course of the project, the team gained in Southeast Asia: 3 City Synthesis Report; and considerable knowledge and benefited greatly from Sustainable Urban Energy and Emissions Planning a wide range of consultations in Indonesia, the Guidebook: A Guide for Cities in East Asia and Philippines, and Vietnam and wishes to thank the Pacific. participants in these consultations, who included ix Abbreviations and Acronyms AusAID Australian Agency for International LPG liquid petroleum gas Development M million C0 2 carbon dioxide PJ petajoule EAP East Asia and Pacific SUEEP Sustainable Urban Energy and ESMAP Energy Sector Management Assistance Emissions Planning Program toe ton of oil equivalent GDP gross domestic product TRACE Tool for Rapid Assessment of City GHG greenhouse gas Energy lEA International Energy Agency us United States X Table of Contents-Overview Key Messages .......................................................2 Urbanization, Economic Growth, Energy, and Emissions Trends ............. .4 Understanding the Cities: Ener~y Use and GHG Emissions .................. 6 Sector Diagnostics: Identifying Opportunities ........................... 11 The Role of Institutions .............................................. 12 Governance Mechanisms ............................................ 14 Next Steps ........................................................ 15 KEY MESSAGES 1. Fast-growing cities in the East Asia and Pacific (EAP) region will define the region's energy future and its greenhouse gas (GHG) footprint. Rapid urbanization and growing standards of living offer a major opportunity to EAP cities to become the global engines of green growth by choosing modern energy efficient solutions to their infrastructure needs and by avoiding locking in the energy-intensive infrastructure of yes- terday. The underlying studies in three EAP pilot cities (Cebu City [the Philippines], Da Nang [Vietnam], and Surabaya [Indonesia]) show a clear correlation between investments in energy efficient solutions in all major infrastructure sectors and economic growth-by improving energy efficiency and slowing GHG emissions, cities not only help the global environment, but also support local economic development through productivity gains, reduced pollution, and more efficient use of resources. 2. Mainstreaming energy efficiency on a citywide scale and introducing low-carbon policies require municipal governments to reform institutions, build capacity, and strengthen energy planning and governance. The report reveals that a common barrier to implementing cross-sectoral urban energy efficiency and emissions mitigation programs is the absence of institutional mechanisms that support coordinated proj- ect evaluation, planning, and investment across infrastructure subsectors. However, the need for institutional reforms and capacity building is increasingly being recognized and brought to the top of urban development agendas in many EAP cities. This is clearly demonstrated in the three pilot cities, which are strongly committed to implementing their vision of green urban development. To ensure effective implementation of their green growth plans, municipal governments will have to foster alliances and collaborate closely with a coalition of actors from the national, state, and local levels, and from civil society and the private sector, which share a commitment to advance the green economy, placing it centrally within top strategic priorities for the city. 3. The cross-cutting nature of energy efficiency offers a unique platform for the identification and pri- oritization of green investments across all infrastructure subsectors as demonstrated through case studies in this report. The Sustainable Urban Energy and Emissions Planning (SUEEP) process and methodol- ogy used in this study and outlined in the accompanying SUEEP Guidebook is designed to help city leadership formulate long-term urban green growth strategies and identify and evaluate investments in energy efficient infrastructure, thereby maximizing return on investment, relative green impact, and contributions to other social and economic development goals. The result is a high-quality pipeline of green investment projects across all key infrastructure subsectors that can be effectively communicated to local stakeholders, private investors, financing institutions, and the international donor community. 4. Investments in green infrastructure require financing from both public and private sources in a coor- dinated manner. Investments in the transportation and buildings sectors present some of the largest oppor- tunities for scaling up energy efficiency at the city level. Financing these large investments in fast-growing EAP cities will require partnerships and coordination between public and private investors. SUEEP can help foster such public-private partnerships and mobilize green infrastructure financing by helping to prioritize and coor- dinate investment projects, as well as through systematic monitoring, reporting, and verification of the impact of the projects on the overall efficiency of energy use and GHG emissions at the city level. 5. The World Bank Group is committed to providing support to EAP cities in building capacity, creating long-term green growth plans, and attracting public and private investments in modern energy effi- cient infrastructure. The Bank has accumulated global knowledge and experience in supporting institutional development and building capacity for planning and implementing green infrastructure investments in cities around the world, including successful urban development projects in the EAP region. Thus, the Bank is well positioned to assist municipal governments in building institutions, creating policies, and developing long-term green growth plans that will attract financial support and investments from both the private sector and the donor community. The SUEEP process and methodology presented in this report will serve as a starting point for transferring some of the best international practices and for providing a platform for such support and col- laboration with all players in the local, national, and global arenas in achieving the green growth objectives at the city level. 2 I KEY MESSAGES Overview Fast-growing cities in the East Asia and Pacific (EAP) region will define the region's energy future and its greenhouse gas (GHG) footprint. Rapid urbanization and growing standards of living offer a major opportunity to EAP cities to become the global engines of green growth by choosing energy efficient solutions to suit their infrastructure needs and by avoid- ing locking in energy-intensive infrastructure. The underlying studies in three EAP pilot cities show a clear correlation between investments in energy efficient solutions in all major infrastructure sectors and economic growth-by improving energy and GHG emissions efficiency, cities not only help the global environment, but they also support local economic development through productivity gains, reduced pollution, and more efficient use of resources. Mainstreaming energy efficiency on a citywide application of advanced infrastructure solutions scale and introducing low-carbon policies requires conducive to long-term energy efficient and low- city governments to reform institutions, build carbon development paths. capacity, and strengthen energy planning and gov- The cross-cutting nature of energy efficiency ernance. The report reveals that a common barrier offers a unique platform for the identification to implementing cross-sectoral urban energy effi- and prioritization of green investments in mod- ciency and emissions mitigation programs is the ern infrastructure across all infrastructure subsec- absence of institutional mechanisms that support tors, as demonstrated through the case studies in coordinated energy project evaluation, planning, this report. The Sustainable Urban Energy and and investment. However, the need for institu- Emissions Planning (SUEEP) process and meth- tional reforms and capacity building is increasingly odology used in this study and outlined in the being recognized across the region, as demon- accompanying SUEEP Guidebook is designed to strated by the governments in the three pilot cities, help city leadership formulate long-term urban Cebu City (Philippines), Da Nang (Vietnam), and green growth strategies and identify and evalu- Surabaya (Indonesia), which are strongly commit- ate investments in energy efficient infrastructure, ted to implementing their visions of green urban thereby maximizing return on investment, relative development. To ensure effective implementation green impact, and contributions to other social of their green growth plans, city governments will and economic development goals. The result is a have to foster alliances and close collaboration high-quality pipeline of green investment projects with a coalition of actors from the national, state, across all key infrastructure subsectors that can be and local levels, and from civil society and the pri- effectively communicated to local stakeholders, vate sector, which share a commitment to advance private investors, financing institutions, and the the green economy, placing it among the top stra- international donor community. tegic priorities for the city. Investments in green infrastructure require It is within the power of cities to develop poli- financing from both public and private sources in cies and establish institutions to support citywide a coordinated manner. Investments in the trans- energy efficiency programs and green urban devel- portation and buildings sectors present some of opment. With the right institutional framework, the largest opportunities for scaling up energy cities can develop and implement policies support- efficiency at the city level. Financing these large ing the next generation of urban infrastructure, investments in fast-growing EAP cities will require which must be more efficient, smarter, and socially partnerships and coordination between public and and environmentally sustainable. Such green infra- private investors. SUEEP can help foster such pub- structure requires changing the way systems are lic-private partnerships and mobilize green infra- designed and decisions are made, as well as the structure financing by helping to prioritize and 3 4 1 ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW FIGURE 1.1. URBANIZATION RATE 100 90 80 North America - 70 ..., 60 c QJ u Cii a_ 50 40 30 20 10 0 1950 1975 2000 2025 2050 coordinate investment projects, as well as through Urbanization, Economic systematic monitoring, reporting, and verification Growth, Energy, and of the impact of the projects on the overall effi- Emissions Trends ciency of energy use and GHG emissions at the city Cities around the world account for about 70 per- level. cent of global GDP, 67 percent of global energy The World Bank Group is committed to pro- consumption, and nearly 70 percent of world viding support to EAP cities in sustainable urban GHG emissions (lEA 2008). These figures are energy and emissions planning, as well as to mobi- trending ever upward, and about 80 percent of lize financing for priority investments in green infra- global growth in urban energy use and 89 percent structure. The World Bank Group has accumulated of growth in GHG emissions is expected to come global knowledge and experience in supporting from developing countries, and from EAP cities in institutional development and building capacity particular. As rapid urbanization in EAP countries for planning and implementing green infrastruc- continues (see figure 1.1 for urbanization rates ture investments in cities around the world, includ- for Southeast Asia and China), national and city ing successful urban development projects in the authorities will have to make decisions that will EAP region. Thus, the Bank is well positioned to fundamentally define how cities will source and assist municipal governments in building institu- use their energy for decades to come. tions, creating policies, developing long-term green Urban consumers require more energy as the growth plans that will attract financial support and economy grows and their standards of living rise. investments from both the private sector and the Urban growth and increased energy use are strongly donor community, and linking efficiency and low- linked to the economic growth required for cities carbon programs to international concessional to meet their diverse energy needs. In Southeast financing and funding, as well as to the private sec- Asia, which is one of the world's least urbanized tor investors who will play an important role in regions but whose population is expected to grow achieving green growth objectives. 1. 7 5 times faster than the worldwide urban popu- lation (Yuen and Kong 2009), the rapid pace of urbanization is posing huge challenges for city gov- ernments to meet increasing energy demand in a ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE SYNTHESIS REPORT-OVERVIEW I5 world. These factors, coupled with EAP countries' FIGURE 1.2. CHANGES IN ANNUAL low per capita energy consumption (see figure ENERGY CONSUMPTION PER CAPITA 1.2), ensure continued strong increases in urban (1990 AND 2009) energy demand across the region-demand that is expected to double during the next two decades. United States Urbanization and economic growth in Southeast China Asia have not only resulted in a continued increase ' .2009: India in energy consumption, but also a profound shift 111990: in the energy mix. Although oil and gas will Japan remain major sources of primary energy supply in Australia Southeast Asia (accounting for 35 percent and 16 percent, respectively, in the ASEAN energy mix by Vietnam 2030), coal is expected to have the fastest annual Thailand growth rate, 7. 7 percent on average for the next 20 years in the business as usual scenario. This rate Indonesia of increase would double the share of coal in the Philippines ASEAN energy mix from about 15 percent in 2007 to 30 percent by 2030. With a movement toward Malaysia more carbon-intensive fuels, carbon dioxide (C0 2 ) Singapore emissions per unit of energy consumption will 0 2,000 4,000 6,000 8,000 increase from 0.49 tons of C0 2 equivalent per kilograms of oil equivalent per capita ton of oil equivalent (tCO/toe) in 2007 to 0.63 tCO/toe in 2030 in a business as usual scenario. Source: lEA 2012. Even in an alternative policy scenario considered by ASEAN countries to mitigate the rise of GHG sustainable manner. Given this, the report focuses emissions, the carbon intensity of energy consump- on Southeast Asia. tion is expected to increase to 0.59 tCO/toe by Annual real GDP growth in Indonesia, Malaysia, 2030. The main reason for the rapid increase in the Philippines, Singapore, Thailand, and Vietnam the share of coal and the carbon intensity of energy (which collectively account for close to 95 percent consumption is the quickly growing demand for of GDP and 86 percent of the population for all electricity in the expanding urban areas-which ASEAN countries) 1 is projected to average 6 per- are supplied by coal-fired power plants. cent between 2011 and 2015. Income growth in The region's governments and city authori- urban areas is also leading to increased demand ties are capable of maintaining economic growth, for new services, particularly those that use elec- improving environmental sustainability, and tricity. City sprawl, which has increasingly led to enhancing reliability of energy supply. Because the development of areas not easily served by pub- energy efficiency and GHG emissions are influ- lic transportation and has discouraged pedestrians, enced directly and permanently by urban form and has resulted in an explosion of personal motor density, cities' planning and infrastructure invest- vehicles like cars and motorized two-wheelers. In ment choices will have a substantial impact on addition, the lifestyles, and corresponding energy energy and emissions trends (World Bank 2005). use profiles, of urban middle- and upper-income Furthermore, large EAP cities are increasingly residents in the developing world increasingly vocal and influential in formulating national poli- mimic those of their counterparts in the developed cies that will shape the energy future and the ways in which the cities source and use energy. Finally, cities will be the main arena for economic trans- 1. The Association of Southeast Asian Nations, or ASEAN, consists of 10 member countries: Brunei Darussalam, Cam- formation and mainstreaming of energy efficiency bodia, Indonesia, the Lao People's Democratic Republic, policies and practices, which are the backbone of Malaysia, Myanmar, the Philippines, Singapore, Thailand, and sustainable energy development in the region-a Vietnam (OECD 2010). 6 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW TABLE 1.1. SUMMARY OF STRUCTURAL AND ECONOMIC models (World Bank 2010c) focusing on com- DATA FOR THE PILOT CITIES pact city design, enhanced public transportation, Parameter Surabaya green buildings, clean vehicles, and distributed generation. Smart urban planning-higher den- Population (m) 0.8 0.9 2.8 sity, more spatially compact, and more mixed-use City area (km 2) 291 1,283 327 urban design that allows growth near city centers Population density 2,748 711 8,458 and transit corridors to prevent urban sprawl- (OOO's/km 2) can substantially reduce energy demand and col GOP/cap/year($) 5,732 1,627 8,261 emissions and help cities become greener and more prosperous (World Bank 2009c). With sup- Economic structure(%) Services 73 56 50 port from AusAID, the World Bank Group initi- Industry 19 42 32 ated a regional program-East Asia and Pacific Agriculture/other 8 2 18 Sustainable Urban Energy and Emissions Planning Source: Authors. (SUEEP) Program-to provide support and guid- ance to city governments in the EAP region to sustained improvement in energy efficiency under formulate such long-term urban energy strategies an alternative energy scenario (ACE 2011) can within cities' overall development plans. provide a reduction of energy intensity of GDP from 580 toe/million US dollars in 2007 to 408 Understanding the Cities: toe/million US dollars in 2030, compared with 501 Energy Use and GHG Emissions toe/million US dollars under the business as usual The first phase of SUEEP was implemented in scenario in 2030. three Southeast Asian pilot cities-Cebu City, This alternative energy path requires a para- Philippines; Surabaya, Indonesia; and Da Nang, digm shift to new low-carbon development models Vietnam. Pilot city key statistics are summarized and lifestyles. EAP cities need to avoid the carbon- in table 1.1. intensive path and pursue sustainable lifestyles for The rapid population increase and rising stan- their citizens by promoting novel urbanization dards of living in the three pilot cities are causing a considerable increase in city energy consumption. Da Nang is currently experiencing 11.7 percent yearly increases in energy consumption, which will FIGURE 1.3. GHG EMISSIONS BY FUEL SOURCE lead to a doubling of energy demand in six years' 3.5 time. The increases in Surabaya and Cebu City's 3.0 - • Other sources Wastewater gas emissions yearly energy use are 4.9 percent and 4.3 percent, respectively, still notably high. The main drivers of the strong energy demand are the transporta- 2.5 tion sector and industry, which account for about Ill Solid waste gas emissions :t= a. 87 percent of energy consumption in Cebu City, Ill v • Electricity about 66 percent in Da Nang, and 68 percent in .... Transportation Gasoline and Diesel 5.8 PJ Gasoline and Diesel 27.4 PJ Gasoline 17APJ Gasoline and Diesel Combustion Losses 21.1 PJ Primary Energy Electrical Power Energy Supplied Electrical Power Fuel Combustion Productive Energy Supply Delivered to Substations to the City Distribution Losses Losses Used by Customers 26.8 PJ 2.3 PJ 23.2 PJ 107.3 PJ 62.4 PJ 39.2 PJ Source: SUEEP Pilot City Studies 2011 Note: PJ = Peta)oule. "Public" includes the end-use energy of city build1ngs, street lighting, city vehicles, water, wastewater, and solid waste management. ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE SYNTHESIS REPORT-OVERVIEW I9 of energy efficiency, are outside city control. Thus, better coordination across departments would close collaboration between the city and national solidify the basis for improving energy efficiency authorities is needed for developing an optimal and reducing GHG emissions on a citywide scale. approach to meet fast-growing urban electricity Therefore, EAP cities will benefit from establish- needs in a reliable, efficient, and environmentally ing strong sustainable urban energy and emissions sound manner. planning approaches that take a comprehensive Breakdowns of GHG emissions roughly match view of energy needs to future proof against the three cities' energy use patterns but with unsustainable increases in energy consumption some variation. Surabaya's energy balance (fig- and GHG emissions. ure 1.6) illustrates the importance of fuel choice There is a strong need in the pilot cities for fur- and conversion efficiencies in GHG emissions ther development of energy efficiency governance and the relative importance of energy efficiency and capacity. The planning and management of in the industrial and buildings sectors. All three energy is usually a multi-agency function, but pilot cities will face challenges for achieving none of the pilot cities demonstrated a cohesive their economic development aspirations while approach that encouraged communication among managing growing energy demand and develop- the relevant agencies. In addition, some cities ing local generation capacity. More consistency lacked any means of, or concentration on, coordi- in the cities' approaches to energy planning and nation between national- and city-level initiatives. FIGURE 1.7. COVER PAGE OF TRACE WEB-BASED TOOL Energy Efficient Cities Initiative ~ Save Tool for Rapid Assessment of City Energy Energy Energy Efficiency Sector Prioritization Benchmarking Recommendations Compare the performance of Identify the sectors with highest Find ways to improve your your city to others priority clty"s energy efficiency m Benchmark Data i! Relative Energy Intensity DOD ODD Recommendations DOD aliiI Benchmark Results D Sector Energy Spending g' Initial Appraisal -·· ··- -·- City Authority Control 8 Energy Savings Assessment ~ Sector Priority ••• ••• Review Results ••• User Guide & Documents Tool lor Rapid Assessment ol City Energy 10 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW If conflicts between national and local policies, The Tool for Rapid Assessment of City Energy programs, and initiatives exist, cities are advised (TRACE), developed by the World Bank Group's to proactively lobby the national government for Energy Sector Management Assistance Program action in areas that are outside of the city's control (ESMAP), 2 offers a quick diagnosis of energy effi- or in which the government has promised action, ciency performance across a city's systems and but delivery is absent or ineffective in the city. The sectors. It prioritizes sectors and presents a range ability to influence the national government effec- of potential solutions along with implementation tively requires cities to build energy governance guidance and case studies. TRACE is a software into their institutional fabric and use it to lead and guide the planning and implementation of citywide 2. For further details please visit http://www.esmap.org/esmap/ energy efficiency programs. node/235. FIGURE 1.8. LEVEL OF INFLUENCE OF CITY GOVERNMENTS IN VARIOUS SECTORS -+- Da Nang -11- Surabaya Cebu City Land-use planning City energy budgeting Capital investment Mass transit operation planning Building codes Water tariffs Solid waste Waste tariffs Wastewater treatment Power supply Public lighting Scale: 1 = No influence 5 = Maximum influence Source: Authors. ENERGIZING GREEN CITIES IN SOUTHEAST ASIA THREE SYNTHESIS REPORT-OVERVIEW I 11 platform for assessing the energy efficiency perfor- mance of six city sectors or services: urban passen- FIGURE 1.9. PRIMARY ENERGY CONSUMPTION BY SECTOR ger transport, city buildings, water and wastewater, public lighting, solid waste, and power and heat. As 100 shown in figure 1. 7, TRACE consists of three prin- 90 cipal components: an energy benchmarking tool 80 111 Other that compares key performance indicators among 70 Public services peer cities, a sector prioritization process that iden- 60 Commercial +' tifies sectors with the greatest potential for energy c: Q) 50 111 Residential u efficiency improvements, and a "playbook" of Qj • Transportation c.. 40 tried and tested energy efficiency recommendations 30 • Industry that helps in the selection of appropriate interven- 20 tions. The TRACE deployment is a three-month 10 assessment process that includes several weeks of 0 Da Nang Surabaya Cebu City upfront data gathering and benchmarking, sector meetings, and preparation of a final report. Based Source: Phase I pilot study on TRACE results, city governments can identify early wins in key sectors and start developing city- wide energy and emissions strategies. cities were generally not aligned with wider city- level planning strategies, giving rise to the poten- Sector Diagnostics: tial for unforeseen challenges affecting the overall Identifying Opportunities energy performance of the sector. Furthermore, The transportation and buildings sectors present trends in the three cities show a shift from non- the largest opportunities for scaling up energy effi- motorized and public transportation to private ciency at the city level. The buildings sector was vehicles. Compounding the problem of growing found to have the most potential for success of demand for private transportation, all three cities energy efficiency measures based on city authori- experience problems with the low fuel efficiency of ties' high degree of control or influence, and the their current vehicle fleets. Public transportation transportation sector accounted for significant has the potential to reduce energy consumption energy consumption and GHG emissions (figures and GHG emissions as well as to alleviate growing 1.8 and 1.9). The three pilot cities showed the congestion and pollution problems, but the quality potential to benefit from integrated transporta- of public transportation in each of the three cities tion planning and the deployment of green build- is deteriorating. High-capacity transit systems are ing codes. However, public lighting has the most absent in all pilot cities. impact on city authorities' budgets; therefore, Building stock is set to double in the region dur- energy efficiency improvements in this sector are ing the next 20 years, and the sector's energy con- a priority. sumption is projected to grow by 30 percent under A comprehensive approach to integrated trans- a business as usual scenario (lEA 2010b). EAP portation planning is needed in all three pilot cit- cities have low building energy intensity (kWh/ ies. The transportation sector in all pilot cities is m 2 ) because the existing building stock consists responsible for significant energy consumption and predominantly of smaller, low-rise buildings with GHG emissions and is thus a key target for action. basic lighting, air conditioning, and appliances. The transportation sector is the single largest user However, new buildings are responsible for a of energy in Cebu City (51 percent), Da Nang (45 rapid increase in energy consumption in the sector percent), and Surabaya (40 percent) and contrib- because they have larger floor areas, and increased utes significantly to GHG emissions in each of the air conditioning, ventilation, lighting, appliances, three cities (Cebu City 40 percent, Da Nang 46 and computers. Therefore, of all energy-consuming percent, and Surabaya 20 percent). Plans to imple- sectors, the buildings sector holds the most prom- ment public transportation systems in the pilot ise for cost efficient energy reduction. Voluntary 12 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT -OVERVIEW green building codes, which exist in all three pilot blackouts. The recent advances in smart metering cities, reflect this opportunity. However, none of and grid-control technologies offer opportunities the green building codes have been implemented for cities to work with electricity suppliers to pro- within city boundaries yet because most developers mote and harness demand-side energy efficiency and and financiers still perceive the associated market reduce distribution losses. risks to be too high. Many cities in Southeast Asia, including the EAP cities are recycling waste through infor- three pilot cities, have the capability to increase the mal methods, but action is needed to capitalize use of renewable energy and distributed genera- on energy recovery and composting potential. As tion. However, none of the pilot cities has a renew- household income grows within the region, waste able energy master plan that can guide a scale-up generation is expected to increase, underscoring of renewable energy production at the city level. the future need for formalized methods of waste Another way in which cities can improve efficiency processing. However, landfill gas capture projects of energy conversion and reduce GHG emissions is appear to be difficult for the pilot cities-proposals by increasing the use of natural gas and liquefied for old landfills in two of the three pilot cities were petroleum gas, including for distributed generation not successfully concluded largely as a result of and other applications where it can cost-effectively technical and institutional challenges. Cities need replace other fuels and coal-fired grid-based power to be better equipped to take advantage of special- generation. However, these options are fairly ized procurement and funding arrangements such limited at the moment because subsidies (at the as public-private partnership opportunities and national level) favor large power producers. carbon finance. In the public lighting sector, EAP cities can The water and wastewater sectors face numer- take advantage of potential energy efficiency gains ous challenges, including high leakage rates, lack by replacing existing metal halide bulbs with of city-scale infrastructure, and low demand-side more efficient technologies such as high pressure efficiency awareness. EAP cities can take action to sodium bulbs or light-emitting diodes. In addi- improve or develop their centralized infrastructure tion, optimized operation (on and off times) and by prioritizing energy efficient water resources, maintenance regimes can further reduce energy upgrading pumps, and addressing the high leakage consumption by this sector. The public lighting rates that characterize the region. On the demand sector is characterized by a high level of city gov- side, lack of awareness is a major challenge. Some ernment influence and accounts for a consider- EAP cities are implementing awareness campaigns, able proportion of overall city energy expenditure. but as personal wealth and demand for resources However, limited awareness of technology benefits increase, more aggressive demand-side manage- and available financing are major barriers. All cit- ment initiatives will be required. ies displayed some confusion about the benefits of Managing electricity peak load and increasing energy efficient lighting technologies and concern the efficiency of electricity supply are major chal- about the capital funds required for replacement lenges for the three pilot cities, and also provide programs. Cities can address these issues through opportunities for the application of smart grid tech- pilot studies to demonstrate improved energy per- nologies. Within the power sector, direct city-driven formance and financial viability. interventions to affect energy efficiency performance are limited to the demand side and to the provision The Role of Institutions of decentralized renewables, underscoring the need The institutional and policy environment is emerg- for cities to leverage their influence systematically ing, but EAP cities still lack cohesive, citywide at the national level to shape this sector. Cities can, regulatory frameworks in the energy sector. The however, successfully manage the demand side to degree of regulation and government oversight in reduce the extent of capacity expansion and can the energy sector varies by country, but national level off peak loads, mitigating the risk of rolling and regional governments are always critical for ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE SYNTHESIS REPORT-OVERVIEW I 13 energy sector management and regulation, and the emissions profile. The outcome, presented in fig- role of city government in setting energy sector ure 1.8, shows that each pilot city generally has policies and regulations is limited. However, this control of investment, budgets, and several local limitation does not prevent cities from planning energy efficiency activities, as well as of certain and deciding what, where, and how urban energy aspects of public lighting, public buildings, and infrastructure should be built. Furthermore, cities wastewater treatment and water tariffs. The main can take steps to influence national policies while areas in which the city authorities' influence is lim- continuing to influence local behavior through vol- ited relate to power supply and electricity tariffs. untary programs and incentives. Because city gov- Significantly, in most other energy-related areas ernments are intimately involved with every aspect there is a mix of influence concentrated at the city of urban development and management and wield level, with coordination between local agencies power and influence over urban energy demand, more likely if facilitated by the city government. they have the unique ability to tie urban energy This situation reinforces the need for city govern- supply to demand. ments to be aware of their local circumstances so Promoting sustainable urban energy develop- as to tailor their plans to their own needs and gov- ment requires cities to build institutions, strengthen ernance structures. The institutional mapping exer- energy governance, and create conducive regula- cise is also useful for understanding the range of tory frameworks. Despite their significant regula- stakeholders that are involved in energy planning, tory powers, most cities in Southeast Asia have not delivery, and management, and serves to commu- effectively pursued sustainable energy planning nicate to all parties the relevant responsibilities, and management practices. Several development ensuring that all understand why each stakeholder gaps need to be bridged, including improvement is involved. Furthermore, the institutional map- of legal and fiscal frameworks, land-use planning, ping exercise provides a means for understanding and development practices; leveraging of emerging the interplay between agencies. technologies and innovations; and improvement of The limited number of policies enacted at the the institutional structures for effective monitor- city level stems from the requirement to coor- ing, reporting, and management of city energy use dinate and institutionalize energy policies at a and emissions. Filling the institutional gaps will national level as part of the sustainable energy help EAP cities to ensure that urban energy sup- planning process. Implementing energy policies at ply is reliable, efficient, and affordable, and that the national level is more efficient and effective, energy demand and emissions are efficiently man- and ensures consistency in application throughout aged. Cities can optimize operating costs, improve the country. It is in the national government's best air quality, and improve quality of infrastructure interests to work with individual cities on national- services, while concurrently supporting economic level policies and plans, because the efforts of development and climate change mitigation objec- city governments will be essential in the effort to tives. Given energy and GHG emissions' cross- achieve national energy and emissions policy goals sectoral nature, city governments need to evaluate and targets. National governments should provide options holistically. Within the urban planning clear guidance to cities on the direction they will framework, options must be assessed across sec- take on sustainable development to enable cities to tors as well as across time because sustainability plan and, where possible, cooperate on issues for initiatives do not always have immediate impacts which national and city goals are aligned. In these or quick roll-out strategies. areas, policies implemented by both the city and During Phase I of SUEEP, an institutional map- national governments can serve to reinforce each ping exercise was undertaken in each city to estab- other, thus making efforts to develop the city sus- lish the principal agencies and actors involved tainably more effective. The city government's key in the delivery and management of services task would be to take the lead in energy and emis- that affect the city's energy efficiency and GHG sions planning and to implement and advocate for 14 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW changes that contribute to the advancement of its To maintain momentum and traction after devel- goals. City governments must recognize the level of opment of the plan, an institutional governance influence they have in implementing policies at the mechanism is required to formalize and govern its city level and be fully responsible for sectors over implementation. One of the principal institutional which they have significant control (for example, recommendations is for each of the pilot cities to street lighting, public buildings, and wastewater establish a citywide energy and emissions task force treatment). For sectors in which national policies to improve coordination and establish an integrated affect the city, the city government should work approach to energy planning and management. closely and establish a strong dialogue with the In all three cities, a committee or like group has national government. The city can seek support or already been entrusted with the governance of vari- financing for measures that are compatible with ous aspects of energy and emissions management. national goals and can ensure that city policies Existing committees can be used by extending their are not negatively affected by national ones. City mandates through broader terms of reference and governments should also work with national agen- enhanced powers (if necessary) to take on the role cies and departments to coordinate activities and of the energy and emissions task force. develop a mutual understanding of responsibilities Because existing urban planning processes in and expectations. the pilot cities rarely include a comprehensive city- A comprehensive sustainable urban energy and wide assessment of and plan for energy needs and emissions plan should demonstrate a clear under- systems, the pilot cities could consider proposing standing of which of its components can be aided the plan for formal review and agreement by an through national programs, and its leaders should executive authority to embed the energy and emis- engage with national agencies from the outset to sions plan into a long-term citywide strategy. By determine the level of support that may be forth- doing so, projects would no longer be at the mercy coming. In discussing areas of common interest of political cycles, and the responsibility to follow between the city and the national governments, cit- through on the plan must be taken seriously. The ies can use the opportunity to secure support or pilot cities will have to consider the appropriate- financing from the national government to imple- ness of this route based on their respective gover- ment national policies. For example, in Da Nang nance structures. several programs with significant energy efficiency Monitoring and reporting systems are crucial components were implemented at the city level for providing credibility to energy and emissions with coordination and cofinancing by a national management; therefore, policies need to be imple- agency. mented carefully to ensure they do not increase costs unnecessarily, and that they address the Governance Mechanisms needs of investors who may, at some point, become SUEEP results in a strategic plan guided by a involved in financing SUEEP components. The "vision" and a set of objectives that city authorities establishment of a city-level platform for monitor- seek to achieve. Reliability, efficiency, and afford- ing and managing energy and emissions is one of ability of energy supply; reduction of GHG emis- the first practical steps in implementing the vision sions; and the city's adaptation to climate change of sustainable urban energy development, and is should be strongly featured as strategic objectives a prerequisite for mobilizing "green financing," in this process. An integrated strategic planning which requires verification and certification of process enables providers of public services, from reductions in GHG emissions. mass transportation to wastewater treatment, to Of the pilot cities, Da Nang had the most read- contribute and identify opportunities that would ily available energy data from a variety of govern- lead to greater energy efficiency, cost savings, and ment agencies; collection of energy data was much reduced GHG emissions, while helping to define less routine in Cebu City and Surabaya. Even when investment programs that respond to future data were available, sharing of data across depart- demand projections. ments was limited in all three cities. Sharing of information, experiences, and knowledge will be ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE SYNTHESIS REPORT-OVERVIEW I 15 a major opportunity for improvement of energy oversight and coordination of vanous energy- efficiency for all three cities. For example, analy- related initiatives across sectors. All three pilot sis of trending information on population, vehicle cities had begun creating appropriate gover- use, traffic, economic growth, and industry would nance structures, but it did not appear that they help all city agencies to make better decisions with had adopted a comprehensive approach by, for regard to energy consumption and energy policy. instance, actively engaging a broad range of stake- Effective monitoring and reporting systems holders and legislatively formalizing the energy should be structured and formalized in a way that planning bodies. Cities need to ensure that energy demonstrates a high level of integrity and reliabil- governance is adequately structured to allow effec- ity and should cover the following: tive communication, coordination, and action. The pilot cities also demonstrated a need for a m Institutional arrangements, roles and respon- SUEEP process to achieve improved energy man- sibilities assigned to individual agencies and agement and GHG mitigation. The SUEEP process personnel. provides a comprehensive approach to planning Boundaries, defining what the energy and emis- to maximize energy efficiency across sectors, sions inventories have included and excluded. with the intent of helping cities to develop their Sources of data, including data from national own initiatives using different mechanisms. The agencies to city government collection arrange- SUEEP process also defines governance systems for ments and so forth. How data are collected implementation and for monitoring and report- and reported (for example, through surveys or ing, which are important outcomes because they meters), and the frequency with which data are improve energy governance in the city and create collected, should all be defined clearly. a common platform for collaboration between the Data collation methods, to provide transpar- city and donors, civil society, and the private sec- ency to the way in which raw data are pro- tor. The SUEEP process also provides a framework cessed. This is particularly important if proxy enabling city governments to prepare a pipeline of data or extrapolations have been used, or where investments in energy efficient infrastructure (from data are incomplete. mass transportation to wastewater treatment) as Quality assurance processes, to demonstrate well as to mobilize "green financing" support. that the methods, processes, and sources used Despite the benefits of such a holistic approach, have been adequately audited or reviewed to none of the pilot cities had established an inte- identify gaps, omissions, and potential improve- grated approach to energy planning or GHG miti- ments to the monitoring and reporting process. gation, and the study revealed significant conflicts Monitoring and reporting systems should strive between various city plans, for example, transpor- for continual improvement to make them accurate, tation planning and land-use planning. reliable, consistent, transparent, and complete. Although a comprehensive approach to planning, like the SUEEP process, is ideal, cities have differ- Next Steps ent levels of capacity, resources, and priorities. Given The results of the three pilot city studies demon- this, city governments could engage with energy strated that there are significant opportunities for planning at three different levels. At the first level, energy management and GHG mitigation in EAP the pilot cities could undertake a high-level, rapid cities, but challenges to achieving improvements assessment of its energy efficiency measures (for remain. Lack of coordination and planning, and example, TRACE). The second level entails deeper deficiencies in technical know-how, funding, and sectoral engagements in selected areas (for example, procurement capability all impede progress. Cities public-private partnerships [PPPs] and sector-wide can address these challenges through improved interventions). A city that is fully committed to com- energy governance and a robust energy efficiency prehensive planning could approach it from the third and GHG planning framework. level-implementation of the full SUEEP guidelines. Institution building enables cities to deploy City governments are in a unique position to effective energy efficiency programs by improving achieve SUEEP goals through their own activities. 16 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW Although their institutional arrangements and FIGURE 1.10. COVER OF SUSTAINABLE capacity are still works in progress, city govern- URBAN ENERGY AND EMISSIONS PLANNING GUIDEBOOK ments perform several roles, including policy mak- ing, regulation and enforcement, and leading and facilitating across a broad range of stakeholders. A city government is the only body with this unique blend of roles and relationships, reinforced by the credibility and tenure to facilitate citywide, com- prehensive, and strategic energy and emissions planning. City governments should also engage in strong dialogue with national governments, and where appropriate, align SUEEP with national and regional programs. This would attract broader support for SUEEP, which could be channeled to locally led initiatives and specific projects driven by the priorities and unique set of circumstances in each city. SUEEP is a continuous process that evolves through institutional reform, capacity building, and implementation of priority investments. To develop a successful SUEEP process, cities must establish sustained city government commitment, II THE WOAlD BANK FIGURE 1.11. SUSTAINABLE URBAN ENERGY AND EMISSIONS PLANNING PROCESS MJ 8 Urban energy and ~rv GHG emissions diagnostics 0 Goal setting ~ (CO,I Step 4: Inventory energy and emissions Step 7: Make the case for SUEEP Step 5: Catalog existing projects Step 8: Establish goals and initiatives Step 9: Prioritize and select projects Step 6: Assess potential energy and emissions projects 0 Commitment g~ Step 1: Create a vision statement Step 2: Step 3: Establish leadership and organization Identify stakeholders and links O Planni~g Step 10: Draft the plan ... A Step 11: Finalize and distribute 0 II Monitoring ' i mtm~ 8 (!) Implementation the plan and reporting Step 12: Develop content for high-priority projects Step 13: Improve policy environment Step 16: Collect information on projects Step 14: Identify financing mechanisms Step 17: Publish status report Step 15: Roll out projects ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE SYNTHESIS REPORT-OVERVIEW I 17 create a baseline based on energy and emissions energy consumption and GHG emissions, which is diagnostics, articulate a vision and goals, priori- essential for the creation of carbon assets (such as tize projects, develop an implementation plan, and GHG emissions reduction credits) and mobiliza- regularly monitor and report on implementation tion of carbon financing support. progress. SUEEP has many benefits, including the Looking ahead, the attainment of long-term, following: sustainable urban energy and emissions develop- ment is not a goal easily defined or achieved. But identification of the principal energy and emis- the SUEEP process and its partners bring EAP cities sions issues facing the city; one step closer through three critical contributions: tl establishment of what can be achieved by the city government, as well as with the aid of other Institutional Development and agencies, and how it can be achieved; Capacity Building integration of energy and emissions issues into The SUEEP process introduces a number of key wider city planning processes; foundation-building activities required to sup- coordination across sectors and agencies and port long-term urban green growth strategies. The the establishment of shared goals; and SUEEP guidelines bring clarity and international establishment of governance, monitoring, and best practices to the institutional reform, policy reporting processes essential to future manage- development, and stakeholder outreach processes ment of the issues, and that are prerequisites for necessary to achieve targets. The SUEEP pro- third-party involvement in project and carbon cess also includes accounting tools cities can use finance. to quantify their energy consumption and GHG emissions for use in target-setting, as well as for Building on the three-city pilot work completed ongoing monitoring and reporting of results and in Phase I, the project team developed a SUEEP implementation progress. Guidebook and Toolkit that cities can use to facili- tate the development of their institutional capac- Creation of a High-Quality Pipeline of ity-building programs and sustainable energy and Green Investments emissions plans. The Guidebook (see figure 1.10) Policy and institutions alone will not create green and Toolkit are designed to give cities a starting growth outcomes-investments in energy efficiency point to begin planning for a more energy efficient improvements and GHG mitigation activities will development path, guiding leadership through also play an important role. Through the SUEEP each key step of the process, including crafting a process, city leadership can evaluate investments vision statement, forming a task team, communi- comprehensively, based not only on their fiscal cating with stakeholders, measuring urban energy return, but also on their relative green impact and consumption and emissions, setting green targets, contribution to other social and economic devel- preparing a sustainable urban energy and emis- opment goals. The result is a well-defined pipeline sions plan, implementing and financing the plan, of green investment projects that can be commu- and ongoing monitoring and reporting (see figure nicated not to just local stakeholders and financ- 1.11). ing institutions, but also to the international donor The SUEEP Guidebook will be tested by the community and potential partners, including pri- pilot cities and refined to support regionwide vate investors. replication. In addition to assisting pilot cities Mobilization of Financing to develop their own SUEEP processes and cre- The international donor community's interest m ate and start implementing their own sustainable supporting sustainable infrastructure for green urban energy and emissions plans, the next phase growth in rapidly developing EAP cities is substan- of the program will be the creation of a web-based tial. However, there have been many challenges: platform that cities can use to measure and report 18 I ENERGIZING GREEN CITIES IN SOUTHEAST ASIA: THREE CITY SYNTHESIS REPORT-OVERVIEW defining green city goals; identifying those activities green investments; (ii) setting up a quantitative sys- that would optimally support green growth goals; tem of indicators for identifying green growth tar- ensuring local governments have the capacity and gets and monitoring and reporting progress over institutional structures needed to support both con- time; and (iii) creating a long-term green growth struction and maintenance of green investments; and plan and a well-defined, thoroughly evaluated pipe- identifying means to measure success. The SUEEP line of bankable investments that can be easily com- process attenuates these challenges by (i) building an municated to potential investors and financiers. institutional and policy foundation for supporting