By Kim Fausing, CEO of Danfoss. Origanally posted on WEF.
Our cities are growing rapidly in terms of inhabitants and the space they occupy. Every minute, we add 10,000 square metres of city space. Every five days, we build a new Paris. Each year, the total size of Japan.
This urbanization requires us to rethink how our cities are engineered. Today, cities occupy 3% of the Earth's land, but account for two thirds of the world's energy demand and 70% of CO2 emissions. The large carbon footprint of cities also impacts air quality, raising growing concerns on the health and well-being of citizens. In fact, 91% of the world's population currently lives in places where air quality levels exceed the World Health Organization's limits.
In other words, the impact of cities is enormous. But so are the opportunities for urban efficiency. To deliver on the UN Sustainable Development Goals and the Paris Agreement, we need to be city-centric. Cities have a unique opportunity to reduce emissions and air pollution by using synergies between the different sectors of the urban energy system. They act as ambitious and inspirational frontrunners that showcase new, efficient technologies and create attractive and future-proof places to live and work.
Smart synergies to make more with less
The key to success is interconnection and integration, utilizing synergies between sectors by combining electricity, transport, heating, cooling, and water & wastewater and managing energy demand and supply in a smart and efficient way. That will allow us to do more, with less, and bring us on course for meeting Paris targets.
In fact, new data from Navigant shows:
- Cities and urban areas can reduce greenhouse gas emissions and local air pollution significantly through investments in already existing technology.
- Investments in energy efficient heating and cooling of buildings and electrified transport, both enabled by sector coupling, alone can bridge about half of the gap in urban greenhouse gas emissions reductions needed for reaching the 1.5°C target in the Paris agreement.
If all urban areas in Europe, China and the USA invested in energy efficient heating and cooling of buildings, they could fill 20% of the urban gap between today’s total emissions and a 1.5°C status with zero emissions. This is significant on its own. But increasing the energy efficiency of buildings will also speed up and support a higher share of renewables, the energy backbone of a de-carbonized energy system: less clean energy needed means less investments for grid extension, energy storage, back-up capacities and energy imports. It also means more security of supply.
Finally, it frees up energy to electrify transport, another area that requires significant action to meet climate goals and to bring down both air and noise pollution. If all urban areas in Europe, China and the US electrified their private and public transport, they would contribute to the 1.5°C end of the Paris agreement with 28%.
Sector coupling is already happening today: EnergyLab Nordhavn in Copenhagen, Denmark, is Scandinavia's largest urban development project. Over the next 50 years, it will become a district of 40,000 residents and 40,000 workplaces but already now, it is a place where the future of energy solutions is happening and an important part of Copenhagen's overall goal of being climate neutral by 2025.
Like HafenCity in Hamburg, it is a ‘living lab’, showing us how the future could look, but also that the future is already here.
Energy efficiency is essential for rapid, cost-effective CO2 reduction
We know the urgency to get the world on track for a 1.5°C scenario and the repercussions if we don’t. The International Energy Agency (IEA) estimates that, at a global level, approximately 44% of the required reductions can be achieved by energy efficiency, and an additional 36% can be achieved by changing to renewable energy. But at a time where we need to speed up action on energy efficiency, instead we are slowing down.
In fact, IEA’s Energy Efficiency 2019 report published in November showed that energy efficiency uptake is slowing down and that the 2018 primary energy intensity improved by just 1.2%, the slowest rate since 2010, and considerably below the average 3% improvement consistent with the IEA's Efficient World Strategy.
This is bad news from a climate, as well as a financial perspective: Capturing the full potential of energy efficiency will allow for a faster roll-out of renewables and lead us on the most cost-efficient path to carbon neutrality. Taking Denmark as an example, new research from EA Energianalyse for the Danish interest organisation SYNERGI shows that the total energy efficiency savings potential including the reduction already accrued will amount to 32-37% by 2050. This would have a substantial impact on the total bill for the Danish energy transition and starkly underlines that energy efficiency is the foundation for a cost-efficient decarbonization of our energy system. The negative trend in terms of uptake must be reversed, and quickly.
Time for action
2019 became the year where ‘climate emergency’ really entered our vocabulary. So much so that Oxford Dictionaries chose it as their word of the year, noting that by September 2019, it had become more than 100 times more common in usage compared to the previous year. 2020 needs to become the year of climate action.
There is much to do, but we know what to do, and we can achieve it while ensuring continued growth. As the private sector we have a key role in showcasing that there is business and jobs in such a net zero carbon future, and to encourage governments to step up climate ambition. This is called the ambition loop. In Denmark, this has long been the case – public-private partnerships are best practice and have helped spur innovation and leadership in the green transition. Denmark has also just agreed to reduce CO2 emissions by 70% by 2030, arguably the world’s most ambitious climate target as it stands. Let’s create that ambition loop globally and do it together, in partnership. No single actor - government, country, city, company, and definitely no citizen - can do this alone.
Over the last few months, more actors, of which many cities and urban areas, have stepped up to the plate to deliver ambitious climate plans of their own. We should applaud them, support them, and complement their actions with ambitious and actionable targets and thresholds. More than anything, we should get started. Now is the time to make sure we keep the momentum and execute our plans.
The green restart series
This is the moment. Now is a unique opportunity to implement green solutions on a greater scale that will lead the sustainable transformation to limit climate change.