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Latin America and the Caribbean hop into electric mobility

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Photo by Empresas Públicas de Medellín

Air pollution kills nearly 7 million people every year around the world. The situation could worsen in the coming years in Latin America and the Caribbean, where transport – a rapidly growing sector – is the main source of greenhouse emissions.

The region’s vehicle fleet is expanding faster than any other in ​​the world and could triple over the next 25 years. This would result in a collapse of the cities’ road infrastructures and in a proportional increase of pollutants.

To avoid this dramatic scenario, several countries in the region are implementing innovative laws and projects to promote electric mobility and introducing clean vehicles into their public transport.

If the current fleet of buses and taxis of 22 Latin American cities were replaced with electric vehicles right now, the region could save almost US$64 billion in fuel by 2030, avoid the emission of 300 million tons of carbon dioxide equivalent, and save 36,500 people from premature death, revealed a UN Environment and International Automobile Federation (FIA Region IV) study, supported by the Spanish Agency for International Development Cooperation (AECID) and the European Union.

UN Environment, through its MOVE platform and with the support of Euroclima+ project, is assisting Argentina, Colombia and Panama with their national electric mobility strategies, and is also helping Chile and Costa Rica in their plans to expand the use of electric buses.

Costa Rica is one of the regional leaders of the transition. The Central American country wants to be the first “decarbonized” nation in the world, as its President, Carlos Alvarado, announced last May during his inauguration.

The country already has an energy matrix that is almost a 100 per cent clean, which helped to reach an important record in 2017: more than 330 continued days consuming electricity only from renewable sources. But transport still depends on fossil fuels and is responsible of 68 per cent of energy sector emissions. The public sector is therefore paying greater attention to electric mobility.

Earlier this year, Costa Rica adopted a groundbreaking law in the region to encourage electric vehicles. The law creates economic incentives to the public and private sectors and introduces benefits, like better access to loans. Additionally, three electric buses will travel across the country as part of a pilot plan.

In the southern part of the continent, Chile is working to have the second largest electric buses fleet in the world, right after China, which currently has 150,000 units. The Chilean government approved a plan last year to gradually introduce 200 electric buses into the transport system of Santiago, Transantiago, and is aiming to exceed 2,000 buses by 2025.

Gianni López, a civil mechanic engineer at the Mario Molina Development and Research Center, says, at this stage, electromobility in Latin America and the Caribbean is mostly competitive in cargo and public transport vehicles.

“In the short term, the region will not have a transition like Norway’s, the world leader. The difference in prices between conventional and electric cars in our countries are still huge and can only be amortized through intensive uses,” such as buses, taxis, company fleets or cargo transport, explains López.

Gonzalo Pacheco, General Manager of the Chilean company Movener, says Chile and the rest of the region need to improve after-sales and maintenance processes, as there are only a few experts in the region and the local universities still do not offer this kind of training.

However, the charging infrastructure is seen as the great challenge of Latin America and the Caribbean.

“Although electric cars can be charged at home, users suffer from the so-called ‘anxiety range’. They are afraid the car will run out of energy before reaching the destination,” says Gastón Turturro, Engineering Professor at the University of Buenos Aires.

Gustavo Mañez, UN Environment Climate Change Coordinator in Latin America and the Caribbean, believes this is far from the truth. “Everyone in the region has electricity outlets at home or at work, and considering that vehicles are parked more than 90 per cent of the time during the day, they could be charged virtually anywhere at a cost almost 10 times lower than that of fossil fuels,” he explains.

Uruguay has recently taken important steps in this field: the country has built electric charging stations in 300 km of its main touristic roads, now the first ‘electrified’ route in the region. The South American country intends to cover 20 per cent of the 9,000 km of its national roadways by 2020. In addition, it has exempted commercial electric vehicles from import taxes.

Argentina has also shown determination. The Government has recently approved a decree that reduces duties on the import of electric cars from 35 to 2 per cent and has presented a law in the National Congress to encourage electric mobility, “very similar to that of Costa Rica and which will mark a precedent in the region,” says Turturro.

The country will also release a dozen of electric buses in Buenos Aires by the end of the year: “If we electrify the capital bus fleet, we could even have a 25 per cent reduction in emissions,” adds the expert.

In Colombia, Medellín prepares the deployment of 1,500 electric taxis by 2020, 500 of which will operate this year. While in Mexico – one of the world’s largest automotive producers –, two large companies, Zacua and Giant Motors, lead projects to manufacture 100 per cent national electric cars.

“Latin America has the greenest electricity matrix in the world, the fastest growing emissions of the transport sector and the highest use per capita of public transport globally. The region is uniquely positioned to take advantage of electric mobility”, adds Mañez.

The transition to electric mobility will help Latin American countries reduce emissions and fulfill their commitments under the Paris Agreement. The pact, signed in 2015 by nearly 200 countries, aims to keep the global temperature rise well below 2 degrees Celsius above pre-industrial levels by the end of the century and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.

UN Environment Office in Latin America and the Caribbean launched the MOVE platform in 2016 to accelerate the transition to electric mobility in the region. Since its creation, MOVE has positioned itself as a flagship community of practice in the provision of technical assistance, resource mobilization, capacity building and knowledge creation on electric mobility in the region.

UN Environment

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Urban Development

Bridge for Cities 2020: Mayors discuss urban development during COVID-19 crisis

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The Bridge for Cities 2020 event provided a forum for mayors and other urban stakeholders to discuss and exchange views on relevant experiences, challenges and opportunities related to the COVID-19 pandemic. The event placed particular emphasis on green, social and technological innovations which can assist cities to recover from the crisis and act as an accelerator for the Sustainable Development Goals.

Organized jointly by the United Nations Industrial Development Organization (UNIDO) and the Finance Center for South-South Cooperation (FCSSC), in close collaboration with the City of Vienna, the event attracted more than 500 attendees.

In his opening statement, UNIDO’s Director General, LI Yong, stressed that “the pandemic has forced us to think outside-the-box and identify innovative solutions. It is important for us all to work collaboratively towards an inclusive and climate-resilient recovery. Bridge for Cities aims to facilitate long-lasting city-to-city partnerships in the course of the COVID-19 crisis and beyond.”.

CAI E-Sheng, Chairman of the FCSSC, added that “in the post-pandemic era, urban development should be resilient. Resilient cities should have both the ability to deal with the crisis, and the ability to recover from the crisis.”

Discussing how digitalization can help to promote behavioral shifts in designing and imagining cities in the context of the COVID-19 crisis, Professor Carlo Ratti, Director of the MIT Senseable City Lab, highlighted that “to respond to the pandemic, cities must act fast, try new innovations, and obtain citizens feedback, as this constant feedback loop will allow the transformation of cities for the future.”

The first Mayors’ Roundtable brought together representatives from Almaty, Antananarivo, Dortmund, Manama, Shenzhen, Vienna, Zamboanga and Zhengzhou to present their cities’ response in ensuring an inclusive recovery from the crisis. The discussion focused on solutions to protect peoples’ jobs, especially those of vulnerable groups, and to support measures for MSMEs that will assist urban development in the long term.

The second Mayors’ Roundtable moved the spotlight onto the topic of a green economic recovery. Mayors and representatives from Amman, Budapest, Colombo, Damietta, Manizales, Sarajevo, Sihanoukville and Tunis offered diverse perspectives on the issue, including opportunities to decouple industrial production and urban infrastructure growth from environmental degradation by making the necessary investments now.

The event was enriched by a series of workshops and exhibition booths organized by partner cities, international organizations and innovative start-ups, showcasing ground-breaking solutions for the future of smart cities’ development.

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Urban Development

Rebuilding Cities to Generate 117 Million Jobs and $3 Trillion in Business Opportunity

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COVID-19 recovery packages that include infrastructure development will influence the relationship between cities, humans and nature for the next 30 to 50 years. With the built environment home to half the world’s population and making up 40% of global GDP, cities are an engine of global growth and crucial to the economic recovery.

Research shows that nature-positive solutions can help cities rebuild in a healthier and more resilient way while creating opportunities for social and economic development. The World Economic Forum’s new Future of Nature and Business Report found that following a nature-positive pathway in the urban environment can create $3 trillion in business opportunity and 117 million jobs.

“Business as usual is no longer sustainable,” said Akanksha Khatri, Head of the Nature Action Agenda at the World Economic Forum. “Biodiversity loss and the broader challenges arising from rapid urban population growth, financing gaps and climate change are signalling that how we build back can be better. The good news is, there are many examples of nature-based solutions that can benefit people and planet.”

Cities are responsible for 75% of global GHG emissions and are a leading cause of land, water and air pollution, which affect human health. Many cities are also poorly planned, lowering national GDP by as much as 5% due to negative impacts such as time loss, wasted fuel and air pollution. However, practical solutions exist that can make living spaces better for economic, human and planetary health.

The study, in collaboration with AlphaBeta, highlighted examples of projects deploying nature-positive solutions and the business opportunities they create.

Cape Town: Cape Town was just 90 days away from turning off its water taps. Natural infrastructure solutions (i.e. restoring the city’s watersheds) were found to generate annual water gains of 50 billion litres a year, equivalent to 18% of the city’s supply needs at 10% of the cost of alternative supply options, including desalination, groundwater exploration and water reuse

Singapore: Singapore’s water leakage rate of 5% is significantly lower than that of many other major cities thanks to sensors installed in potable water supply lines. Globally, reducing municipal water leakage could save $115 billion by 2030. Returns on investment in water efficiency can be above 20%.

Suzhou: Suzhou Industrial Park’s green development in China has seen its GDP increase 260-fold, partially through green development. The park accommodates 25,000 companies, of which 92 are Fortune 500 companies, and is home to 800,000 people. The park has 122 green-development policies, including stipulations on optimizing and intensifying land use, improvement of water and ecological protection, and the construction of green buildings. As a result, 94% of industrial water is reused, 100% of new construction is green, energy is dominantly renewable and green spaces cover 45% of the city.

San Francisco: San Francisco requires new buildings to have green roofs. The “green” roof market is expected to be worth $9 billion in 2020 and could grow at around 12% annually through 2030, creating an incremental annual opportunity of $15 billion.

Philippines: The loss of coastal habitats, particularly biodiverse and carbon-rich mangrove forests, has significantly increased the risk from floods and hurricanes for 300 million people living within coastal flood zones. A pilot project in the Philippines, one of the countries most vulnerable to climate change, is monetizing the value of mangroves through the creation of the Restoration Insurance Service Company (RISCO). RISCO selects sites where mangroves provide high flood reduction benefits and models that value. Insurance companies will pay an annual fee for these services, while organizations seeking to meet voluntary or regulatory climate mitigation targets will pay for blue carbon credits. Overall, restoring and protecting mangrove forests in human settlements can reduce annual flood damage to global coastal assets by over $82 billion while significantly contributing to fighting climate change.
The report identifies five complementary transitions to create nature-positive built environments and outlines the business opportunities and potential cost savings for programmes targeting urban utilities for water, electricity and waste, land planning and management, sustainable transport infrastructure and the design of buildings.

Office space the size of Switzerland
Global examples call out areas to be improved. For example, an estimated 40 billion square metres of floor space is not used at full occupancy during office hours – an area roughly equivalent to the size of Switzerland. The COVID-19 upheaval has prompted a surge in flexible and remote working models in many countries – greater application of such models could help reduce the need for private office space in the future.

Governments’ role to raise and steer finance
The report calls for both government officials and businesses to play their part in raising and steering finance for sustainable urban infrastructure. “Regulations in areas including urban master planning, zoning and mandatory building codes will be critical to unlocking the potential of net-zero, nature-positive cities and infrastructure,” said Khatri. “We are at a critical juncture for the future of humanity. Now is the time to treat the ecological emergency as just that. A net-zero, nature-positive path is the only option for our economic and planetary survival and how we choose to use COVID-19 recovery packages might be one of our last chances to get this right.”

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Urban Development

City Climate Finance Gap Fund Launches to Support Climate-smart Urban Development

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Today, the City Climate Finance Gap Fund (“The Gap Fund”) was launched jointly by ministers and directors of the Governments of Germany and Luxembourg together with the World Bank, European Investment Bank, and Global Covenant of Mayors. It paves the way for low-carbon, resilient, and livable cities in developing and emerging economies by unlocking infrastructure investment at scale.   

The Gap Fund will support city and local governments facing barriers to financing for climate-smart projects. Filling a gap in available project support, the Gap Fund offers technical and advisory services to assist local leaders in prioritizing and preparing climate-smart investments and programs at an early stage, with the goal of accelerating preparation, enhancing quality, and ensuring they are bankable.

With a target capitalization of at least €100 million, the Gap Fund will accelerate investments supporting cities in developing and emerging economies, as they determine goals and objectives for low-carbon and well-planned urbanization. The Gap Fund investment is aiming to unlock at least €4 billion of final investment in climate-smart projects and urban climate innovation.

“What cities do today will forever shape our climate tomorrow,” said Mari Pangestu, World Bank Managing Director for Development Policy and Partnerships. “Cities in developing countries urgently need resources to realize their climate ambitions. Through the Gap Fund, the World Bank is supporting low-carbon, resilient, inclusive, healthy, creative, and sustainable communities for all.”

Cities are on the frontlines of the climate emergency and currently account for around 70 percent of global CO2 emissions. Urban centers’ share of emissions is expected to grow as 2.5 billion people migrate from rural to urban areas by 2050. Before the COVID-19 pandemic struck, it was estimated that more than $93 trillion in sustainable infrastructure investment was needed by 2030 to meet climate goals. As cities strive to recover from the economic impacts of COVID-19, investments in clean energy, climate-resilient water and sanitation, and urban regeneration projects will play an important role in eliminating pollution, improving local food systems, and creating green jobs. They will also lead to cleaner, healthier, and more equitable communities – conditions that can help prevent future pandemics.

Climate investment projects are an indispensable opportunity to improve lives of the millions who live in cities around the world. However, cities frequently lack the capacity, finance, and support needed for the early stages of project preparation – especially in developing and emerging economies. This leads to impasses where cities cannot move project ideas to late-stage preparation and implementation. This hurdle is frequently overlooked by national and international support – a challenge the Gap Fund will seek to overcome.

The Gap Fund is an initiative of the governments of Germany and Luxembourg together with the Global Covenant of Mayors for Climate and Energy (GCOM), in partnership with several other key players in the climate finance arena (including C40, ICLEI – Local Governments for Sustainability, and Cities Climate Finance Leadership Alliance). It will be implemented by the World Bank and the European Investment Bank. The Gap Fund was announced at the UN Climate Action Summit 2019 as a key initiative of LUCI, the Leadership for Urban Climate Investment, which promotes financing for ambitious urban climate action until 2025. Core donors to the Gap Fund are Germany (€45 million – including €25 million from the Ministry for the Environment, Nature Conservation and Nuclear Safety, and €20 million from the Ministry for Economic Cooperation and Development) and Luxembourg (€10 million).

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