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World Bank Paper Outlines Options for Low-Carbon Urban Investment in Shanghai

World Bank21 January 2014: The World Bank has announced a paper that presents innovative bottom-up approaches to help cities set low-carbon targets and identify cost-effective, low-carbon investments for meeting these targets. The methodology presented in the study, titled 'Applying Abatement Cost Curve Methodology for Low-Carbon Strategy in Changning District, Shanghai,' is designed to be replicable in cities elsewhere in China and around the world.

The study, conducted at the request of the Shanghai Municipality and Changning District Government, identifies 58 carbon dioxide abatement measures in the District's Hongqiao area. The measures are grouped into six themes: retrofitting existing commercial buildings; green power; retrofitting existing residential buildings; low-emissions new buildings; behavior changes; and green mobility. Of these six areas, 80% of the total abatement potential was accounted for in building retrofits and green building. The study found, however, that while retrofitting offered great abatement potential, it was among the most difficult measures to implement due to, inter alia, a lack of financial incentives, business models and owner interest.

Based on these findings, the study also presents three potential abatement scenarios for the Changning District for 2015 and 2020, which illustrate that meeting low-carbon targets will require the concerted effort of the government and private sector through effective market mechanisms, consistent regulations and policies, and adequate enforcement. It further presents low-carbon investment strategies and institutional arranagements that Shanghai could adopt to advance these efforts.

The methodology used to identify abatement opportunities consists of four parts: conducting bottom-up surveys to diagnose energy use patterns; developing abatement cost curves to identify the potential and cost of various mitigation measures; prioritizing mitigation measures based on abatement potential, cost, and ease of implementation; and developing alternative abatement scenarios to set low-carbon targets.

The study concludes with a discussion on the potential for replicating the abatement cost curve methodology in other cities, and compares the methodology with different approaches developed by the World Bank administered Energy Sector Management Assistance Program (ESMAP) to facilitate low-carbon development at the national and city levels. [World Bank Press Release] [Publication: Applying Abatement Cost Curve Methodology for Low-Carbon Strategy in Changning District, Shanghai]