ClimatePULSE: Municipalities and Carbon Markets (Part 1)

CC_logo_small.jpgIt is widely understood that urban planning, green design, transportation and other infrastructure decisions that municipalities have to make can have significant climate change impacts. Through actions such as promoting compact urban design and altering waste management practices, municipalities can reduce their carbon footprints immensely.
In support of such actions, numerous programs and initiatives aimed at formalizing municipal climate change commitments have been developed. Perhaps the most notable is the US Conference of Mayors Climate Change Protection Agreement, which has now been signed by over 830 mayors from across the United States. Internationally, ICLEI – Local Governments for Sustainability has run the Cities for Climate Protection program since 1993, and it now boasts over 800 members from Australia, Canada, Europe, Japan, Latin America, Mexico, New Zealand, South Africa, South Asia, Southeast Asia, and the United States.

And while climate change continues to grow in importance and concern for municipalities, most still do not understand how they, their citizens and developers can navigate the complex terrain that results from the intersection of policy, building codes, market realities, tax considerations, and technical constraints, etc, to end up with a tradeable carbon credit. (A great example of how such complexities play out is presented in a recent 3P blog about green buildings that can be found here.)
For example, a planner whose project clearly results in reduced car miles travelled and increased use of public transportation cannot find a way to generate credits from reduced GHG emissions. Or perhaps a municipal engineer who championed a subdivision where every home has next to no GHG emissions from space and water heating cannot tell the municipal manager that the project will result in any increased municipal revenues through carbon credit sales. . Such examples seem so widespread we’ve heard some municipal staff say they’ll never try anything related to carbon credits again.
But does it need to be this way? Why have these projects really failed to generate credits, and what can a municipality do differently to avoid these pitfalls?
Municipalities and their projects can generate credits in numerous ways, but they need to understand that having a project that reduces GHG emissions is only the first step. To generate credits, a municipality needs also to (1) have clear ownership of the reductions, and (2) be able to account for the emissions in a very detailed and accurate way. Once it achieves these two things, it then needs to understand the pathways to market for the credits it has generated.
In the coming week, Part 2 of this post will discuss the types of municipal project that lend themselves to carbon credit trading, some of the considerations involved in such projects, and the different ways municipal carbon credits can be brought to market.

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