Dr. David J.

Jhirad Professor and Director Johns Hopkins SAIS Energy Resources and Environment Program US-Taiwan Sustainability Symposium, December 10, 2012

Global Developments in Infrastructure and Energy ! Energy-Water Nexus ! The Strategic Benets of Energy Eciency ! Sustainable Mobility and Transport ! The Obama-Roussef Joint Initiative on Urban Sustainability ! The Rockefeller Foundation Asian Cities Climate Resiliency Network(ACCRN) ! Innovative Partnerships and Financing (ARISE) !

 68.7% Of the worlds population will live in urban areas by 2050 (in 2010, this figure was 50.5%) 25% of global GDP comes from the top 100 cities 13% Of the worlds population live in at-risk coastal areas (which make up 2% of the worlds land area) 75% Of people who live in at-risk coastal areas (010 m above sea level) are in Asia 80% expected $80 billion to $100 billion per year in climate change adaptation costs will likely be borne by urban areas

Sources: Booz Allen Hamilton, Global Infrastructure Partners, World Energy Outlook, OECD, Boeing, Drewry Shipping Consultants, US Department of TransportaHon (2007)

Global water use

100%

Water for energy

Other Biofuels Fossil fuels

80% 60% 40% 20%

Energy Power

Nuclear

Coal

2010

2010

The energy sectors water needs are set to grow, making water an increasingly important criterion for assessing the viability of energy projects
Source: IEA WEO 2012

Energy eciency potenFal used by sector in the New Policies Scenario

100% 80% 60% 40% 20% Industry Transport Power genera9on Buildings Unrealised energy eciency poten9al Realised energy eciency poten9al

Two-thirds of the economic potenFal to improve energy eciency remains untapped in the period to 2035
Source: IEA WEO 2012

Energy expenditure in 2035 compared with 2010

Trillion $1.5 $1.2 $0.9 $0.6 $0.3 $0 -$0.3 China India European Union United States Japan New Policies Scenario Ecient World Scenario

In addiFon to cuNng energy expenditures by an average of 20%, improved eciency brings wider economic gains, parFcularly for India, China, the United Sates & Europe
Source: IEA WEO 2012

District Cooling could greatly increase the energy eciency of very densely populated ciFes such as New York City, replacing the need for air condiFoning and hence greatly reducing electricity consumpFon.
Sources: Cenergy and Logstor

Electrical and Thermal Efficiency in %#

Source: Logstor

Source: IEA WEO 2010

A Smart City incenFvizes and supports: Non-motorized transport through prioriFzaFon of bicycle and pedestrian infrastructure development Transit-oriented development of residenFal and commercial areas Use and eciency of public transport (e.g. Bus Rapid Transit) Aordable transport soluFons for everyone But puts in place disincenFves for: Individual car use through measures such as congesFon charging, limited parking, and vehicle taxes Urban sprawl through proper zoning

 Dedicated lanes and bus stops with easy access Local, Express and Feeder Services Tickets integrated across whole system and aordable for general public Reliable user informaFon system Clean buses with low emissions, e.g. using CNG Integrated into zoning to enable transit- oriented hubs

Major global gas trade ows, 2010 035

Source: IEA WEO 2012

" Sustainable development for

the next 20 years: Rio+20 !
" Integrating environmental,
economic and social goals!

" Addressing rapid urbanization!

" Domestic priority on

infrastructure in US & Brazil!

" New frame for bilateral

engagement and action !
Brasilia, March 2011!

Source: Dr. Shalini Vajjhala

- President Obama!

" Key Objectives! " Bundling: moving from project to portfolio-nance! " Avoiding losses: capturing savings and externalities! " Leveraging: making the most of public resources! " Structure: Bilateral public-private partnership with federal,
state and local governments and communities!

" JIUS Cities: Rio de Janeiro and Philadelphia!

Source: Dr. Shalini Vajjhala

" Local leadership on sustainability!

" Rio mega-events: Rio+20, 2014
World Cup, 2016 Olympics!

" Philly 100% green stormwater plan!

" Major gaps in implementation! " Opportunity to transform

infrastructure nance & delivery!

" Model for both established &

emerging cities around the world!
Source: Dr. Shalini Vajjhala

" Targeting urban adaptation investments ! " Identifying opportunities for avoiding losses! " Enabling integrated planning and policy! " Creating local institutions and delivery mechanisms! " Financing integrated, exible, resilient infrastructure! " Successful adaptation is often a non-event ! " Need to create space for continuous improvement! " Building investor condence in sustainable systems !
Source: Dr. Shalini Vajjhala

Private! Public!
Loans! Grants!
(Zero/LowInterest)$

[Equity/Debt]!
+15% Return!

10-15% Return!

Concessional Finance! National/Local Capital!

5-10% Return!
National/Local Capital!

Asset Manager

Independent Management Board! (Governments, Stakeholder Groups, etc.)!

Local Green * Development B-Corporation!

[Implementing Authority / Delivery Mechanism]!

Sustainable Development Portfolio!

Social! Programs!
Integrated Systems / Public Goods / Networks! Project! Finance! Corporate Finance!

Jardim Gramacho Redevelopment

(~$2 billion, 15-year, est. ROI 12-25%)
Public

MDB Development Policy Loans

(Zero/Low-Interest)

Tech. Assistance/Planning Grants

Private

20+% Return (Private Equity/Debt)
15-20% Return (Private Equity/Debt)
12%-15% IFC & Sovereign Funds (1st loss)
OPIC (Risk Insurance)

Asset
Manager

Grants

Jardim Gramacho Board -- City and State of Rio, Duque de Caxias, local stakeholders

New B-Corp
Land concession & development rights incentive mechanisms;
15-year life, contracting authority with State and City of Rio

Job Training Center(s)

Green building, affordable housing, transit, energy, water, lighting systems, etc.

E-Waste Recycling Facility

Construction, technology rms -- corporate nance

Revenue Streams: Real Estate Development, CDM Credits

Source: Dr. Shalini Vajjhala

 Historically, the landfill has received 3 million metric tons of waste per year, releasing large volumes of methane, a highly potent greenhouse gas. In June, the landfill was closed, with daily trash now transported to the most advanced treatment plant in Latin America to curb production of greenhouse gases and pollution of nearby marshes. Further, about 75 million cubic meters of methane gas will be collected over the next 15 years from the remaining waste. The Brazilian petroleum company Petrobras plans to purchase the landfill's methane gas for use in its refineries. A portion of the revenue stream from the methane sales will help rehabilitate the impoverished favelas that have sprung up around the landfill - generating social and environmental benefits.

" Project Recipes! " Financial

Ingredients!

" Policy Menus! " www.epa.gov/jius!

 Structuring at least 3 Sustainable Development Portfolios to jump-start the master planning process $1.2-1.5b bankable portfolios developed by NGOs and entrepreneurs Gramacho Landfill Guanabara Bay Another currently being selected in the US Identifying legal and financial structure for the SDCs

 7 year initiative launched in 2008 $60 M of $90M Global Climate Change Initiative Investing in 10 cities in 4 Asian countries Emphasis on 2nd tier cities

Source: CrisHna RumbaiHs del Rio(Rockefeller FoundaHon)

Impact
The resilience and capacity of a growing number of developing country/Asian cities in relation to current and future climate risks is enhanced, and through this work the lives of poor and vulnerable men and women are improved.

Outcomes
1. Capacity of Cities to plan, finance, coordinate and implement climate change resilience strategies 2. Network for Knowledge, Learning and Engagement 3. Expansion, deepening of experience, scaling up

Source: CrisHna RumbaiHs del Rio(Rockefeller FoundaHon)

Educa9on & capacity building of ci9zens!

Climate sensi9ve land use & urban planning!

Drainage, ood & solid waste management Water demand & conserva9on systems

Diversica9on of climate aected livelihoods

Urban Climate Change Resilience #

Emergency early warning systems

Large-scale ecosystems service strengthening

Resilient housing & transport systems

Responsive health systems

Institutional coordination

Source: CrisHna RumbaiHs del Rio(Rockefeller FoundaHon)

City !

Taxes, receipts!

National!

National transfers, Urban Development Funds !

Bilateral!

ODA, Climate Funds !

Multilaterals!

Climate Funds (e.g. Green Climate Fund), Loans for urban development!

Private Sector!

CSR, Climate Proofed Value Chains, Resilience building goods & Services!
Source: CrisHna RumbaiHs del Rio(Rockefeller FoundaHon)

ARISE

 Global facility to assemble sustainable development portfolios consisting of pipelines of investible projects Wholly capitalized and supported by grant funds Resolves credibility challenge by providing continuity and due diligence across regions and portfolios Provides three intelligences: technical, financial, communication Unresolved: Where will be GPPFs home? Role of the Green Climate Fund (GCF) located in Seoul

Market Viability Challenge Small, fragmented, non-existent market often dominated by public sector (now experiencing budget constraints) Projects often fall below the initial capital investment threshold required of large institutional investors Lack of proven revenue models Prohibitively high transaction costs Upfront Capital Challenge Despite favorable economics when full lifecycle and avoided costs are considered, relatively higher relative initial capital requirements often deter serious consideration and implementation Risk Premium Challenge Would-be borrowers (city, municipal, local governments) suffer from lower credit ratings than provincial and national counterparts Innovative technologies and project designs lack sufficiently robust track records, thereby raising their risk profiles

Innovative Public-Private Partnerships Visibility, transparency, well-defined channels of communication Global Initiative on Urban Resilience: World Bank; SAIS/ERE; ICLEI; C-40; US Green Building Council; Abu Dhabi Eye-onEarth Summit Intermediary entities to ensure access to full array of capital available Bring together different stakeholders representing different colors of money public and private grants all the way to venture capital and private equity Global entity to prepare portfolios of smaller projects: New Role for Green Climate Fund? De-risks individual projects Reduces aggregate transaction costs