Wednesday, November 12, 2014

IPCC Response Essay #7: Climate Change and Cities

Alexandra B. Klass, Professor of Law, University of Minnesota Law School

For the first time in 2014, in its Fifth Assessment Report, in the volume on Mitigation of Climate Change, the Intergovernmental Panel on Climate Change (IPCC) included a separate chapter, Chapter 12, on “Human Settlements, Infrastructure, and Spatial Planning.” According to the IPCC, “[s]ince the publication of the Fourth Assessment Report, there has been a growing recognition of the significant contribution of urban areas to GHG [greenhouse gas] emissions, their potential role in mitigating them, and a multi-fold increase in the corresponding scientific literature.”[1] In both Chapter 12 of the Mitigation of Climate Change volume and the Summary for Policymakers for that volume, the IPCC concludes:

Thousands of Cities are undertaking climate action plans, but their aggregate impact on urban emissions is uncertain (robust evidence, high agreement). There has been little systematic assessment on their implementation, the extent to which emission reduction targets are being achieved, or emissions reduced. Current climate action plans focus largely on energy efficiency. Fewer climate actions plans consider land-use planning strategies and cross-sectoral measures to reduce sprawl and promote transit-oriented development.[2]

The urbanization of the world and the impact of that urbanization on GHG emissions are significant. Today, more than half the global population is urban, as compared to only 13% in 1900.[3] By 2050, the global urban population is expected to increase by between 2.5 to 3 billion, corresponding to nearly 70% of the world’s population.[4] Today, urban areas account for approximately 75% of global energy use and the same amount of CO2 emissions from global energy.[5] Moreover, the majority of future urban population growth will take place in small- or medium-size urban areas in developing countries.[6]

There is, of course, both potential and risk with this type of growth. Because such development will be mostly new, there is the potential to create buildings, other infrastructure, transportation, and land use plans that maximize efficiency and reduce GHG emissions from the outset, as opposed to having to retrofit existing buildings, infrastructure, and transportation networks. On the other hand, because most of this urban growth will be in developing countries, there is the risk that lack of political will, coupled with limited institutional and financial capacity, will result in low-efficiency buildings and infrastructure and urban sprawl.

As noted in the IPCC Fifth Assessment Report, thousands of cities are undertaking climate action plans, raising the issue of what kind of GHG emissions cities can actually control. According to the U.S. Energy Information Agency (EIA), the factors that contribute to statewide per-capita GHG emissions (and thus impact urban GHG emissions) include climate (significant cold or hot weather results in more energy-related emissions in urban areas), the structure of the state economy (energy-producing economies are more carbon-intensive), population density, energy sources, building standards, and explicit state policies to reduce emissions.

With regard to these factors, cities have little control over their baseline climate, although planners of new cities can attempt to concentrate development in more moderate regions. Cities have some but not significant control over whether they build their economies on energy production or on non-energy-producing activities such as finance, higher education, or high-tech industries. Energy-producing economies are tied to the physical location of energy resources, which means cities near energy resources will generally base their economies on development of those resources, leading to greater GHG emissions. But cities can choose to focus on other economic drivers, such as high-tech or higher education, if they create the amenities to draw the target companies and workers to those cities. Pittsburgh, Pennsylvania, is an example of a city that has made a significant effort in recent decades to transition from an energy-intensive economy (coal mining and steel manufacturing) to one based on higher education, medicine, and high-tech industries.

Cities also have some, and increasingly significant, control over the energy sources they use for heating and electricity. Although state public utility commissions and state legislatures make many of the primary decisions regarding energy use in the state, cities are increasingly choosing to limit their use of coal and other fossil fuels and to shift their energy uses to natural gas and renewable energy. Chicago, Illinois, is an example of a city that has made a policy choice to reduce coal in its electricity mix and rely much more heavily on renewable energy, relying on an “electric aggregation” program whereby it enters into long-term power purchase agreements (PPA) with electricity suppliers on behalf of its citizens. By negotiating a new price for all of its residents under one contract, Chicago can use its bargaining power to lower electricity rates and/or demand certain types of generation like wind, solar, and natural gas and eliminate or reduce reliance on coal.

Cities have even more control over building efficiencies, density, and mass-transit, all of which have significant impacts on urban GHG emissions. While it is difficult to make major changes to existing building efficiency, transportation infrastructure, and density because such investments are prone to “lock-in” of energy and emissions pathways, many European and Asian cities and even some U.S cities that have a long history of high density and excellent mass-transit are good examples for future urban development.

But many city efforts in this area have focused on the energy efficiency of buildings. This is not surprising as buildings are a major contributor to GHG emissions and a source of such emissions over which cities have significant control. In the United States, buildings account for 39% of total energy use and 68% of electricity use. As a result, increasing the efficiency of electricity use in buildings has the potential to reduce overall energy use, leading to decreased energy costs, reduced need to build more power plants, greater energy security, and significant environmental protection benefits. McKinsey & Company estimates that $520 billion invested in non-transportation energy efficiency in the United States by 2020 could generate energy savings worth over $1.2 trillion, reduce end use energy demand by 23% of current projections, and as a co-benefit provide over 1.1 billion tons of GHG reductions.[7] On a global scale, of course, these benefits multiply exponentially.

U.S. cities are beginning to enact innovative policies to “benchmark” commercial buildings by collecting, disclosing, and analyzing building energy consumption data. With such data, cities can encourage market transactions that allow more efficient buildings to benefit, shape energy-efficient behavior of building owners, and learn from that data to shape future city policies and guide building construction policies in the new cities that will inevitably result from the urbanization of the world’s population.

The cities of Austin, Texas; Seattle, Washington; Washington, D.C.; Minneapolis, Minnesota; and New York City all impose some form of benchmarking requirements on commercial buildings and mandate some information disclosure to local governments or prospective buyers to increase demand for energy efficient buildings. Nevertheless, even though this is one area where cities have significant regulatory authority, barriers to collecting such data as a result of public utility privacy policies and sometimes state public utility commission privacy policies makes collection of such data difficult. For instance, some public utilities do not provide such data in a uniform format that can be easily analyzed by customers or third parties. State privacy laws also can pose a barrier to accessible energy consumption data because they direct the utilities to disclose such data only in highly aggregated form that makes it difficult for third party energy efficiency providers or policymakers to determine trends, recommend energy efficiency improvements, or otherwise analyze the data for research or consulting purposes. Some states, like California, are in the process of developing rules to balance any privacy interests in energy consumption data with the need to make such data available to shape energy efficiency policies and allow cities to make GHG reductions in their building stock. But most states have no policies in place at all and thus are limiting the ability of cities to engage in GHG mitigation in the areas in which they would otherwise have the most authority to act.

In sum, cities will play an increasingly significant role in contributing to worldwide GHG emissions but also have the potential to make major contributions to GHG mitigation efforts with the right policies in place. In order to realize that potential, however, cities must be given the tools to collect, analyze, and use energy consumption data to improve building efficiency. If cities are able to make strides in this area, their research and policies can serve as models for the cities of the future.

[1] Fifth Assessment Report of the Intergovernmental Panel for Climate Change, Mitigation of Climate Change, Ch. 12: Human Settlements, Infrastructure, and Spatial Planning 7 (2014); WGIII: Summary for Policymakers at 26.

[2] IPCC, Mitigation of Climate Change, Ch. 12, at 6.

[3] Id. at 7.

[4] Id. at 4.

[5] Id.

[6] Id. at 7.

[7] McKinsey & Co., Unlocking Energy Efficiency in the U.S. Economy iii (July 2009).

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