City of Bologna set to scale up local carbon market after successful EIT Climate-KIC pilot

The development of local carbon markets can catapult cities into a low-carbon and resilient future, according to EIT Climate-KIC’s City Finance Lab’s successful pilot with the City of Bologna. City Finance Lab is Europe’s first dedicated platform aiming to develop innovative finance solutions for sustainable urban projects, driven by EIT Climate KIC’s Low Carbon City Lab (LoCaL) and South Pole Group.

“The City Finance Lab was instrumental in the development of a robust local carbon market for industries in the city of Bologna, through tailored advisory services to alleviate existing financial and legal barriers,” said Giovanni Fini, Expert in Energy Efficiency and Urban Sustainability Policies, City of Bologna. “The scaling of the local carbon market will help the city transition further toward a low-carbon resilient state.”

Although carbon markets at national and international levels are widely used mechanisms, their impact at the municipal level has yet to happen – until now. The increasing commitments of private companies towards sustainability, climate neutrality and the desire to create benefits for the local community, creates a demand pull for local climate mitigation projects.

“A municipal carbon market innovates by providing the private sector with an investment opportunity through local climate mitigation projects. The Bologna Carbon Market (BOCAM) will accelerate local private sector investments into city-level climate mitigation projects by creating a voluntary offsetting scheme,” said Aymeric Reymond, Consultant, South Pole Group. “Such an approach, once successfully implemented, can easily be replicated in other industrial regions of Italy and Europe, where the demand for local climate mitigation projects is equally high.”

The City Finance Lab launched its first public call for proposals on 14 June and will be supporting four to five European initiatives until the end of the year. It will announce the winning proposals in September.

According to the Intergovernmental Panel on Climate Change (IPCC), cities are key to tackling climate change, representing 70 per cent of global greenhouse gas emissions. And global urbanisation is constantly growing. Between €0.36 and €1 trillion per annum of incremental investment is needed over the next 15 years to set cities on a path to meet climate targets and build resilience.

However, green urban projects still struggle to attract enough investment due to high transaction costs, uncertainty in national and international frameworks, a lack of resources in making these projects attractive to investors, and gaps in knowledge about available finance options and mechanisms.

Cities can be part of the solution by working with the City Finance Lab, which was founded to support the development of innovative and well-designed financial solutions that can remove barriers to sustainable project investment.

Specifically, it provides technical assistance to developers while also building a pipeline of bankable urban mitigation and adaptation projects via a network of multi-competence centres that evaluate the financial and technical expertise of urban projects.

 “The City Finance Lab is the first dedicated platform of its kind, designed to source innovative mechanisms, deploy KIC partners as technical advisors, and finally, capture the learnings into training materials – all this feeds the LoCaL training hub,” said Victor Gancel, Climate Innovation Programme Manager, EIT Climate-KIC.

“Combining the urgency for climate mitigation and adaptation actions, the strong and growing interest of stakeholders and liquidity of the capital market, this is a crucial moment to scale new financing solutions and boost the financial sector as a whole,” said Denis Jorisch, Senior Consultant, South Pole Group. “The City Finance Lab will support this change by bringing together leading city finance experts from public, private, and philanthropic organisations to develop their innovative solutions.”

The City Finance Lab’s team plans to expand its scope to other continents as well as to evolve its offering and become a hub for innovative financing solutions at the city level. It’s working to leverage over €430 million in additional finance for climate action in cities over the next five years.

 
Location
Italy
Related Goal
Goal 12: Foster bankable green assets in cities
Articles you may be interested in
In The News
Three cities building back better: Madrid, Milan and Amsterdam

EIT Climate-KIC will host a session at the 18th...

Three cities building back better: Madrid, Milan and Amsterdam
In The News
EIT Climate-KIC to work with Google on Impact Challenge

EIT Climate-KIC is delighted to announce that it will...

EIT Climate-KIC to work with Google on Impact Challenge
In Detail
EIT Climate-KIC’s case studies on innovative land use set the stage fo...

EIT Climate-KIC launches ‘Innovations in land use,’ a collection of case studies demonstrating the organisation’s innovation-led, systemic approach that’s poised to help Europe deliver...

EIT Climate-KIC’s case studies on innovative land use set the stage for transforming whole systems
In The News
What role can finance play in the green recovery? EIT Climate-KIC and UNEP Fin...

EIT Climate-KIC, in partnership with the UNEP Finance Initiative,...

What role can finance play in the green recovery? EIT Climate-KIC and UNEP Finance Initiative ask leading thinkers to weigh in
In The News
EIT Climate-KIC supports European green recovery with €4 million for start-u...

EIT Climate-KIC is investing €4 million in nine climate...

EIT Climate-KIC supports European green recovery with €4 million for start-ups affected by COVID-19
Opinion
How public servants can engage unlikely allies to deliver climate policies
Juan Azcarate Deputy director of Energy and Climate Change, Madrid City Council
How public servants can engage unlikely allies to deliver climate policies
In The News
The City Finance Lab calls on urban leaders to help build back better

Organised by sustainability expert South Pole, the competition for...

The City Finance Lab calls on urban leaders to help build back better
In The News
EIT Climate-KIC supported cities – Leuven, Milan, Valencia and Vienna no...

Twelve cities are in the final stage of the...

EIT Climate-KIC supported cities – Leuven, Milan, Valencia and Vienna nominated as European Capital of Innovation 2020
Opinion
Going beyond investments in single-point solutions, an Opinion by Kirsten Dunlop
Kirsten Dunlop CEO, EIT Climate-KIC
Going beyond investments in single-point solutions, an Opinion by Kirsten Dunlop
In The News
The climate emergency demands bold policy innovations – can cities d...

While the challenges of climate change and a global...

The climate emergency demands bold policy innovations – can cities deliver? 
In The News
EIT Climate-KIC joins circular economy side event at UN High Level Political F...

“Bold leaders are needed to drive a collaborative approach...

EIT Climate-KIC joins circular economy side event at UN High Level Political Forum on Sustainable Development
In The News
EIT Climate-KIC and Silesian Metropolis join forces to transform Europe’s la...

EIT Climate-KIC and the Metropolitan Association of Upper Silesia...

EIT Climate-KIC and Silesian Metropolis join forces to transform Europe’s largest coal region in the face of the climate crisis
In The News
Anders Wijkman represents EIT Climate-KIC at the International Society for the...

Speaking online at the inaugural Conference of IS4CE—the International...

Anders Wijkman represents EIT Climate-KIC at the International Society for the Circular Economy Conference
In The News
EIT Climate-KIC receives €8.4 million for innovation projects that stimulate...

Eleven climate innovation projects across Europe tackling COVID-19 related...

EIT Climate-KIC receives €8.4 million for innovation projects that stimulate job creation and support a post COVID-19 green recovery
In The News
CEO Kirsten Dunlop represents EIT Climate-KIC at Climate Policy Forum

On 25 June, EIT Climate-KIC attended the Climate Policy...

CEO Kirsten Dunlop represents EIT Climate-KIC at Climate Policy Forum
In Detail
A net zero future offers significant opportunities for the European economy,...

EIT Climate-KIC’s views on the EU 2030 Climate Target Plan.  The recent announcements from the European Commission on the EU Recovery Plan from the...

A net zero future offers significant opportunities for the European economy, society and citizens
In The News
EIT Climate-KIC supported LOOP-Ports project wins prestigious sustainability a...

The LOOP-Ports project, led by the Fundación Valenciaport  and funded by EIT Climate-KIC,...

EIT Climate-KIC supported LOOP-Ports project wins prestigious sustainability award
In The News
EIT Climate KIC joins roundtable as Republic of Korea moves Green Deal forward

On 24 June, EIT Climate-KIC attended the 7th Green...

EIT Climate KIC joins roundtable as Republic of Korea moves Green Deal forward
In our community
Water scarcity in Southern Europe: Manufacturing expert insights
Water scarcity in Southern Europe: Manufacturing expert insights
Opinion
A scientist’s opinion: Interview with Cliona Howie Del Rio about systems thinking
A scientist’s opinion: Interview with Cliona Howie Del Rio about systems thinking
In Detail
Citizen activation is essential for Europe to meet its climate ambition

EIT Climate-KIC provides ideas for action under the European Climate Pact. The debate on how to achieve ambitious climate targets is often dominated by...

Citizen activation is essential for Europe to meet its climate ambition
In The News
EIT Climate-KIC shines at the GLF Bonn Digital Conference, the year’s la...

EIT Climate-KIC’s Director of Sustainable Land Use and member...

EIT Climate-KIC shines at the GLF Bonn Digital Conference, the year’s largest global digital conference on the environment
In The News
EIT Climate-KIC supported Climeworks raises over €67 million to expand its c...

Climeworks, the world leader in capturing CO2 from air,...

EIT Climate-KIC supported Climeworks raises over €67 million to expand its carbon dioxide removal capacities
In The News
EIT Climate-KIC supported Zeleros raises €7 million for the development of h...

EIT Climate-KIC supported Zeleros Hyperloop has completed a financing...

EIT Climate-KIC supported Zeleros raises €7 million for the development of hyperloop in Europe
In our community
A just transformation for Rugeley, as the power station comes down
A just transformation for Rugeley, as the power station comes down
In Detail
Challenging paradigms as the gateway to innovation: New IIPP report for EIT ...

EIT Climate-KIC partner the UCL Institute for Innovation and Public Purpose (IIPP), which works on changing how public value is imagined, practiced and evaluated...

Challenging paradigms as the gateway to innovation: New IIPP report for EIT Climate-KIC’s Landscapes as Carbon Sinks Deep Demonstration
In our community
Water scarcity in Southern Europe: Raw materials expert insights
Water scarcity in Southern Europe: Raw materials expert insights
In Detail
Challenge-led system mapping: A knowledge management approach

The challenge-led system mapping approach responds to the need to improve the practitioner’s capacity to move towards system change by providing mechanisms by which...

Challenge-led system mapping: A knowledge management approach
In The News
EIT Climate-KIC is restructuring to deliver systems transformation for climate...

EIT Climate-KIC is restructuring to provide “systems transformation as...

EIT Climate-KIC is restructuring to deliver systems transformation for climate change
In our community
Water scarcity in Southern Europe: Food expert insights
Water scarcity in Southern Europe: Food expert insights