Achieving Ambitious Emissions through Carbon Pricing in Developing Countries

(Photo: Aki Kachi / NewClimate Institute)

Background and Objective

Colombia faces an affordable housing deficit, rapid urbanisation pressure, and the need to improve energy efficiency to reduce emissions from the building sector while working towards longer term decarbonisation. To address these challenges, NewClimate Institute and Oeko Institute, supported by the German Emission Trading Authority (DEHSt), has developed a conceptual study for a market-compatible approach for mitigation action in the Colombian building sector. The project focused on the social housing sector.

Examples of Nearly Zero Energy Buildings (NZEBs) are scarce in Latin America and so far non-existent in Colombia. Experience gained from a pilot of this type could help inform broader policy change in the building sector. Considering the novel nature, transformation potential and Paris compatibility of an NZEB activity, it could be argued that a host country such as Colombia could “afford” to sell carbon credits generated by such action and not risk undermining the achievement of its own climate change mitigation targets.

Implementation

NewClimate Institute’s previous work has identified the need to make ambition raising central to Article 6 projects and reduce energy use/emissions from new buildings to net-zero (along with ambitious retrofitting programs) to limit the global temperature rise to 1.5C or well below 2C.

The project identified measures that can generate an incentive for ambitious emission reductions and contribute to sectoral transformation, making part of the reductions available to investors in the form of internationally transferred mitigation outcomes (ITMOs) or other results-based sources of climate finance. The project established a strong case for incorporating sustainable design and energy efficiency considerations into new residential development, especially in the social housing segment.

Results and Outlook

The substantive work of the project has now been completed, but the publication of the research findings is still pending. The project will produce two main outputs which focus on the Colombian context: A report on the theoretical framework of a pilot concept for Colombia, including a benchmarking approach for such an activity, and key policy recommendations to further transformational change towards decarbonisation. Findings from the research project will be used to develop a handbook to help potential host countries interested in engaging with Article 6 navigate relevant considerations that they may face.

Achieving Ambitious Emissions through Carbon Pricing in Developing Countries

Countries: Colombia

Role of BMU: Research funding

Lifecycle: 2015 - 2019

Implementation: NewClimate Institute

Other Organisations Involved: Öko-Institut e.V.

Contact: Aki Kachi, a.kachi@newclimate.org