London, Portland Tap Efficiency to Beat UN to Climate Fix

May 31, 2011, 5:32 AM EDT By Alex Morales

(Adds quote from London Mayor’s adviser in 22nd paragraph.)

May 31 (Bloomberg) -- Cities from Los Angeles to Johannesburg are changing street lights, insulating buildings and promoting cycling to slash carbon emissions as envoys at United Nations talks bicker about binding greenhouse-gas goals.

“While national governments continue their excruciatingly frustrating dialog on climate change, we in the cities are acting,” Portland Mayor Sam Adams said in an interview. “It’s sheer common sense. Becoming more efficient with your city’s energy needs means you’re also more economically secure.”

Wracked with budget deficits and economies recovering from recession, municipal leaders are looking for cheap ways to curb energy consumption and help governments meet pollution targets. General Electric Co. and Siemens AG, which make power generation equipment, and energy management tool-makers Johnson Controls Inc. and Honeywell International Inc. are winning contracts from cities to work on efficiency projects.

Global annual spending of $300 billion to $1 trillion on efficiency could slash energy use a third by 2050, according to the UN Environment Program. Former U.S. President Bill Clinton and New York Mayor Michael Bloomberg this week are spearheading a gathering in Sao Paulo of the C40 group of mayors to address topics from tree-planting to hydrogen-powered buses.

‘Lowest-Hanging Fruit’

“The lowest-hanging fruit is in the area of energy efficiency and conservation,” UNEP Executive Secretary Achim Steiner said. “If you look at much of the urban infrastructure that has been built up over the last 100 years, and even in the last 20 to 30 years, it’s extraordinarily inefficient.”

While cities take up just 2 percent of the Earth’s land mass, they contain more than half the global population and generate over 70 percent of its carbon emissions. That makes them central to achieving national targets, such as Brazil’s goal to cut greenhouse gases by more than a third by 2020.

“The target will be met by cities, where there’s more energy consumption,” said Hamilton Moss de Souza, director of energetic development at the nation’s Federal Ministry of Mines and Energy.

The work of the mayors may prod envoys at UN talks in Bonn next week aimed at drawing up an agenda for an annual gathering in December in South Africa. Those talks are aimed at setting new carbon emission limits for industrial nations for when current targets under the 1997 Kyoto Protocol expire in 2012.

While the UN talks stalled in Copenhagen in 2009, the city itself is pressing ahead with efforts to curb emissions. Copenhagen is working with Seoul-based Hyundai Motor Co. to test hydrogen-fueled cars, and with Bagsvaerd, Denmark-based Novozymes A/S to make fuel from waste, Mayor Frank Jensen said.

Talk Versus Action

“Ministers and heads of state talk a lot about climate change, but we in the cities are the ones who have to act,” Jensen said. “We want Copenhagen to be an international green laboratory, and we have made a catalog of green solutions to take to other cities in the world.”

A district heating system has helped Copenhagen cut emissions by 20 percent in a decade, Jensen said.

Portland’s Adams said he’s in Brazil to tout “green” loans that allows householders to install insulation and heat pumps, paying back the borrowings through their energy bills.

The Oregon city also is working to contain a $41.9 million deficit, caused by a slump in tax revenue from businesses, especially hotels, according to Moody’s Investors Service Inc.

Clinton’s initiative in April joined with the C40, led by Bloomberg, to bolster efforts by cities to slash emissions. The New York mayor is founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

Mayors Meet

During three days of meetings that begin today in Sao Paulo, C40 city leaders will swap notes on their experiences of fighting climate change. Attendees include representatives from cities including Addis Ababa, Athens, Berlin, Buenos Aires, Delhi, Hong Kong, Lagos, Lima, Moscow, Paris, Rome, Santiago, Chile, and Yokohama, Japan.

“Many of the things you can do to increase the efficiency of buildings, such as improving lighting and insulation have a very competitive investment return,” said Arah Schuur, director of the Clinton Climate Initiative’s building retrofit program. “That’s good for business as well as the environment.”

Among the program’s projects is a collaboration with Morris Township, New Jersey-based Honeywell to retrofit 21 municipal buildings in Johannesburg with more efficient lights and solar- heated water, Schuur said. In Houston, Munich-based Siemens and France’s Schneider Electric SA are refitting 271 city buildings to cut energy use by more than 30 percent.

Global Leverage

A U.S. plan to cut energy costs in public buildings known as the energy performance contract already generates $3.5 billion of work for companies, according to Tom Rowlands-Rees, an efficiency analyst at Bloomberg New Energy Finance. If projects like that were rolled out globally, the market could be more than 25 times bigger, he said.

“Energy efficiency has huge potential to help us reduce emissions globally,” Rowlands-Rees said. “If the energy performance contract concept could be scaled globally we’d go from a $4 billion industry to a $100 billion one.”

Landmark buildings are among those targeted for retrofits. New York’s Empire State building, once the world’s tallest, is remodeling to cut energy use by 38 percent and bills by $4.4 million a year, according to the Clinton initiative. Johnson Controls Inc. and Jones Lang LaSalle Inc. are working on building at the request of the owner Tony Malkin. The city’s deficit is projected to reach $4.1 billion, according to the Independent Budget Office.

Lights in London

In London, city authorities are working with General Electric Co. and Electricite de France SA to replace lights with more efficient light-emitting diodes on Tower Bridge in time for next year’s Olympic Games, which the U.K. capital won the right to host after making a virtue of sustainability in its bid. Mayor Boris Johnson last week announced plans to roll out 1,300 electric-vehicle charging points across the city by 2013.

“City governments have the opportunity to be a crucible for low-carbon innovation with the combined clout to influence national governments and international policy,” said Johnson’s environment adviser, Kulveer Ranger. “Boris Johnson has made greener transport a top priority for his administration, which will be a key theme for us in Sao Paulo.”

Los Angeles is also looking to LEDs to replace 140,000 street lights, a $57-million project that’ll pay back the cost with energy savings over seven years, according to the Clinton initiative. Los Angeles combined budget shortfalls of $895 million from fiscal years 2013 to 2015, after closing a $457 million hole for the budget year 2012, which begins July 1.

Law in Rio

While Brazil describes its national greenhouse-gas target as voluntary, the City of Rio de Janeiro has a law requiring it to reduce emissions by 8 percent in 2012 and 20 percent in 2020, from 2005 levels. Even so, nations must strive to reach an international agreement, or “none of these measures will mean anything,” said Sergio Besserman, president of Cadegom, Rio’s sustainable development chamber.

“Any real movement will have to come through a global agreement,” Besserman said. “Carbon must be priced, it has to be internalized in the global economy.”

--With assistance from Stephan Nielsen and Helder Marinho in Sao Paulo, Christopher Palmeri in Los Angeles, Timothy Jones in Chicago and Martin Braun and Mark Tannenbaum in New York. Editors: Reed Landberg, Todd White

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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