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Applying Abatement Cost Curve for Low-Carbon Strategy

January 21, 2014

BEIJING, January 21, 2014 - The Government of China is committed to reducing the country’s carbon intensity by 40 to 45 percent between 2005 and 2020. The World Bank has been working with Changning District in Shanghai to develop and implement a low-carbon strategy based on CO2 abatement cost curves and scenarios.  Abatement cost curves are a useful analytical tool to help cities set low-carbon targets and identify cost-effective, low-carbon investments for achieving these targets.

Cities are at the core of the action to achieve the government’s carbon-intensity-reduction target. With 300 million people projected to migrate to cities in China over the next 20 years, energy demand in buildings and for transportation will continue to increase rapidly.

“In China, the speed and scale of urbanization provides an unprecedented opportunity to invest in clean energy solutions to contain carbon emissions related to energy supply and consumption in the sprawling cities,” said Klaus Rohland, World Bank’s Country Director for China. “The window of opportunity is narrow because urban form and infrastructure have long lifetimes. Introducing efficient low carbon technologies into new urban infrastructure today would avoid locking cities into a high-carbon growth path for decades to come.”

Determined to become a low-carbon city, Shanghai Municipality and its Changning District Government requested the World Bank to assist in designing innovative and efficient ways to achieve their carbon-intensity-reduction targets. The report, titled Applying Abatement Cost Curve Methodology for Low-Carbon Strategy in Changning District, Shanghai, presents an innovative bottom-up approach to determine a city’s low-carbon targets and define an investment program.

The methodology follows four steps:

  1. Conducting comprehensive, bottom-up surveys  to diagnose current energy use patterns ;
  2. Developing CO2 abatement cost curves to identify the abatement potential and cost of various mitigation measures, based on the data from the survey;
  3. Prioritizing mitigation measures based on abatement potential, cost, and ease of implementation; and
  4. Developing alternative abatement scenarios to establish an ambitious, low-carbon target.

In the case of Changning District, the abatement cost curve helped identify 58 abatement measures which were grouped into four clusters: retrofit of existing commercial and residential buildings to improve energy efficiency; green energy supply to reduce emissions; enforcement of higher energy efficiency and lower emissions standards for new buildings; and green mobility.

“This study provided solid analytical underpinning for the local government to make an informed decision about priority mitigation actions, and also for the World Bank to design investment and technical assistance program in Changning district in Shanghai. The methodology has wide potential for replication in Chinese cities. And it will also benefit cities around the world in their quest for a low-carbon development path,” said Xiaodong Wang, World Bank’s Senior Energy Specialist who is a co-author of the report.

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