09.21.2010

New York, Tuesday 21 September - On day two of Climate Week NYC, international NGO The Climate Group hosted city and state government and business leaders from across the globe to share their best strategies for financing large-scale deployment of low carbon technologies.

The discussion focused on ‘smart’ information and communications technologies (ICTs) already available that could make our growing urban infrastructure more efficient. The Climate Group’s 2008 report, SMART 2020, showed that ‘smart’ grids, buildings and transport systems could reduce global emissions by 15% in 2020.

This represents a significant proportion of emissions or energy/carbon intensity reduction targets currently on the table - Europe’s 20-20-20 emissions reduction target, India’s 20-25% emissions intensity target and China’s 40-45% carbon intensity target by 2020.

Dr Han Seung-soo, Former Prime Minister of the Republic of Korea and Chairman, Board of Directors of the Global Green Growth Institute, said in his keynote remarks, “We must unlock our potential to promote technological innovations and behavioral changes aimed at delivering a low-carbon future. Some remarkable changes are already taking place all over the world. While there is no silver bullet to dealing with the climate challenge, I am heartened to see a broad coalition from all sectors of society striving to achieve green growth within their own respective realms.”

Cities represent large and growing markets for smart technologies – with the global urban population of more than three billion predicted to grow to five billion by 2025, cities are currently responsible for 70% of global emissions.  But cities and regions must find ways of financing rapid large-scale deployment of smart technologies to meet their energy efficiency and renewable energy goals.

The financial community are already recognizing smart technologies as a good investment opportunity.

Alan Salzman, CEO and Managing Partner, VantagePoint Venture Partners said, “Low carbon technologies are now identified as significant investment opportunities by the global financial industry – they are already providing highly attractive returns on investment. But we need to greatly increase the pace and scale of financing to reach our societal goals. City and state governments have the power to accelerate the adoption of low-carbon solutions and make them even more attractive to the private sector.”

Deborah Ifrah, Executive Director, Investment Banking at JP Morgan Chase said, “The evolution and adoption of smart technologies across grids, commercial & industrial environments, and homes has created one of the largest and fastest growing global markets we have seen in quite some time. Global legislation, public and private financing, as well as consumer education have proven critical to forming the industry's foundation and revolutionizing world-wide energy consumption practices. JPMorgan is excited to be a part of this important global effort.”

Klaus Chavanne, Head of Research, MEAG NY said, “With over €1 billion invested in sustainable buildings, MEAG’s experience is that sustainable buildings provide a better value for investment. We will continue to pursue investment opportunities in sustainable buildings as they arise.”

The technology industry is actively involved in helping to find solutions to financial barriers to the deployment of smart technologies.

Clay Nesler, Vice President, Global Energy and Sustainability, Johnson Controls said, “Smart Buildings not only employ information and communications technology to reduce energy use, but also to continuously measure and verify energy savings.  This is a key enabler for energy efficiency financing models that help building owners make investments in large-scale energy efficiency retrofit projects."

Dimitri Zenghelis, Director Climate Change Practice, Cisco Systems said, “Strong, effective and timely action to protect growth, support poverty reduction and create new economic opportunities is needed now to avoid substantial risks from climate change. At Cisco, we’ve found that creating smart cities is a key enabling action to support the world’s emission reduction goals.”

City governments are also increasingly keen to invest in the deployment of smart technologies as a way of achieving their emissions reduction targets.

Frans-Anton Vermast, Advisor Public & International Affairs, Physical Planning Department, City of Amsterdam said, “Through a unique collaboration between citizens, businesses and governments we can achieve huge energy savings now and in the future through innovative technologies that combine electricity and connectivity. Smart Policy, government orchestration and initial public funding can trigger large private investments to boost a regional economy and stimulate new products and services that meet the ultimate goal of CO2 emissions reductions.”

Bernabé Unda, Regional Minister of Industry, Innovation, Energy and Tourism, Basque Government said, “Direct grants to users and consumers and innovative public procurement are helping us meet our energy efficiency targets.”

One size does not fit all, and promising ideas can be stalled, as seen with PACE financing in the US. Many thought PACE would unlock many of the financing barriers to building retrofits and small scale renewable energy, but the tax assessed financing mechanism has been ruled too risky by the Federal Housing Financing Authority and has left many states, local governments and homeowners frustrated.

Without many of the hurdles of retrofit, developing economies in Asia have been successful in attracting finance for energy efficiency and renewable energy projects.  Regional governments there regard the deployment of low carbon technology to reduce emissions associated with rapid urbaisation as closely tied to economic development and raising the quality of life for thousands of citizens.

Rutu Dave, Climate Change Specialist, World Bank Institute, said, “The role of finance has never been more important in tackling global challenges like poverty and climate change. But it is not just about providing money – it is also about the know-how on how to use the money in a way that is smart and innovative to support local communities. By understanding the impact of climate change at the local level, we can help countries to use their resources more effectively, for example by blending traditional development funding with climate and carbon finance.”

Dr Stephen Hammer, Executive Director, Energy Smart Cities Initiative Joint US-China Collaboration on Clean Energy (JUCCCE) said, “The rapid growth in real estate development, automobile use and energy use in cities around the world presents an unprecedented challenge for public officials. As the world’s population moves to cities, we have a unique opportunity to set the world on track for a clean technology future by integrating energy-efficiency, renewable energy and intelligent transportation options into local growth plans and economic development. If we can create energy smart cities in a timely and cost efficient matter, we will be well on our way to solving climate change.”

This event during Climate Week NYC forms part of The Climate Group’s SMART 2020 Cities & Regions programme, which aims to share learnings from ten, global, urban demonstration projects involving innovative partnerships, policies and financing mechanisms.