BREATHE BETTER BOND INITIATIVE October 16, 2019 THE AVERAGE - - PowerPoint PPT Presentation

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BREATHE BETTER BOND INITIATIVE October 16, 2019 THE AVERAGE - - PowerPoint PPT Presentation

Aug 12, 2023 33 likes •163 views

BREATHE BETTER BOND INITIATIVE October 16, 2019 THE AVERAGE RESIDENT OF DELHI WILL LIVE ABOUT 10 FEWER YEARS BECAUSE OF HIGH POLLUTION Source: Introducing the Air Quality Life Index, Energy Policy Institute at the University of Chicago 1

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BREATHE BETTER BOND INITIATIVE

October 16, 2019

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“THE AVERAGE RESIDENT OF DELHI WILL LIVE ABOUT 10 FEWER YEARS BECAUSE OF HIGH POLLUTION”

Source: Introducing the Air Quality Life Index, Energy Policy Institute at the University of Chicago

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Cities are at the nexus of climate change and air pollution

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THE URBAN AIR POLLUTION PROBLEM

97% of urban populations in low- and middle-income countries are exposed to unsafe air quality, resulting in about 7 million premature deaths per year Cities are responsible for 70% of CO2 emissions globally

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AIR POLLUTION CAUSES PREMATURE DEATHS AND ECONOMIC LOSS

Ambient air pollution and household air pollution Unsafe water and unsafe sanitation Lead exposure Total High income 1,691 (3.52%) 159 (0.33%) 303 (0.63%) 2,153 (4.48%) Upper-middle income 1,691 (8.37%) 89 (0.44%) 118 (0.59%) 1,898 (9.40%) Lower-middle income 367 (6.38%) 143 (2.49%) 28 (0.49%) 538 (9.39%) Low income 18 (4.83%) 12 (3.30%) 0.74 (0.20%) 31 (8.33%) Total 3,767 (5.06%) 404 (0.54%) 451 (0.61%) 4,622 (6.21%) Welfare Damages, in billion US$ and (percentage of GNI) by Pollutant

  • Air pollution results in significant welfare loss and

premature deaths each year

  • Lower-middle income countries face higher

premature deaths (1.8 million in 2016) from air pollution than upper-middle or high income countries

Source: Lancet, 2018

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SELECT CITY EXAMPLES

PM2.5 and PM10 Reduction in Selected Cities

Significant reductions in pollution levels are achievable.

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Legal

Inability to structure and issue bonds

Financial

Competing demand for capital

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GOAL, BARRIERS, AND SOLUTIONS

Barriers Solutions Goal Support cities to launch projects that reduce short-lived climate pollutants and greenhouse gas emissions.

Support competitive financing for air pollution-reducing projects

Knowledge

Lack of SLCP- reducing, bankable projects Technical assistance for project identification and preparation

Data

Lack of data to quantify pollution problem Technical assistance for emissions inventory and projections Technical assistance to structure bond issuances

Approach Address barriers that have prevented cities from taking pollution mitigation measures

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Grant Finance Results Based Payments

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BBB STRUCTURE

The BBB Initiative Phase I: Technical Assistance Pollution assessments, bond structuring, project selection Phase II: Bond Issuance Phase III: Results Based Payments Grant Funding Sources (Donors, national governments) Institutional Investors Results Based Payments Funding (Donors, national governments) Municipal Government or PPP Projects Projects Pollution-Reducing Projects Results Based Payments Interest and Principal Bond Proceeds Repayment Capital Technical Assistance

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CITY SELECTION RESULTS

Ahmedabad Delhi Bogota Lagos Santiago Johannesburg Jakarta Bengaluru Mexico City Lima 0.0 0.2 0.4 0.6 0.8 1.0 1.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 Air Pollution + GHG Coefficient Conducive Environment Coefficient

  • Location on graph reflects severity of air pollution problem and actionability
  • Size of each city’s circle scaled to population
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MOST CITIES CANNOT ACCURATELY MEASURE POLLUTION

0.4 0.4 1.4 1.5 1.9 4.7 15.9 2 4 6 8 10 12 14 16 18 ECA NA EAP MNA LAC SA SSA 54.3 5.6 1.5 0.3 10 20 30 40 50 60 LI LMI UMI HI

Million People per Ground Level Monitoring Station by Country Income Level and by Region

  • The problem is most severe in low income Sub-Saharan African countries
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  • Monitoring, reporting and verification
  • Capacity building at project level to evaluate impact
  • Bond structuring
  • Project identification and preparation
  • From stakeholder capacity building to feasibility studies and project tender
  • GHG/air pollution emissions inventory (current and projected)
  • Identifying types and sources and integrating into pollution models

TECHNICAL ASSISTANCE COMPONENTS

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PROJECT TYPES

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SIMULATION CITY CASE STUDY

IFC used a pollution model to assess the impact of three projects implemented in a hypothetical South Asian city.

In USD millions Mitigation Actions Starting Year Debt Equity Total Electricity Generation – Project to install a 200MW Solar Plant. 2021 101 34 135 Transport – Replace 300 diesel buses with 250 electric trolleys. 2021 155 52 207 Waste – Construction

  • f a waste to energy

plant that can process 420,000 tons of municipal solid waste. 2021 131 44 175 Total 387 130 517

  • Using recent investments as a

benchmark, IFC estimated the capital required to achieve specific changes in the energy mix

  • The pollution model then assessed

the impact on GHG emissions and several types of pollutants

  • Conclusion. A $130 million BBB

issue coupled with $387 million of project debt would result reductions of 3.4 million tons of CO2 and almost 2 million tons of PM2.5 over 8 years.

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BBB IMPLEMENTATION PATHWAY

Issuance of the BBB with proceeds to be used for SLCP-reducing projects Implementation

  • f projects

Ongoing impact assessment oversight and project monitoring & Results Based Payment Project selection and bond design and choice of performance metric Establishing relationship with city and understanding SLCP problem and potential solutions

Phase I: Technical Assistance (6 months – 2 years) Phase III: Measuring Results and Incentives Phase II: Issuing the BBB