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
Wanted: Green business ideas to fix climate change

Starting today, the seventh edition of the global green...

Wanted: Green business ideas to fix climate change
In The News
Why sustainable water management needs a systemic solution

Ensuring that fresh water is available, in a sustainable...

Why sustainable water management needs a systemic solution
In The News
Integrating nature with technology to strengthen climate adaptation

The European Commission released the new EU Climate Adaptation...

Integrating nature with technology to strengthen climate adaptation
In The News
EIT Climate-KIC is a key player in helping Europe adapt to climate change

EIT Climate-KIC welcomes the new EU strategy on adaptation...

EIT Climate-KIC is a key player in helping Europe adapt to climate change
In The News
Edinburgh: building climate resilient infrastructure and communities

A labyrinth of cobblestone streets, dimly lit and presided...

Edinburgh: building climate resilient infrastructure and communities
In The News
Residents of Kessel-Lo, Belgium, are invited to shape the future of their neig...

EIT Climate-KIC is working with the city of Leuven...

Residents of Kessel-Lo, Belgium, are invited to shape the future of their neighbourhood
In The News
Improved urban parks increase communities’ climate resilience

Start Park, a project led by citizens from Florence,...

Improved urban parks increase communities’ climate resilience
In The News
New accelerator programme geared towards systemic change secures key partners

Following its Open Call, the New Accelerator programme has...

New accelerator programme geared towards systemic change secures key partners
In The News
New videogame builds climate awareness among players

Change Game, a videogame financed by EIT Climate-KIC and...

New videogame builds climate awareness among players
In The News
Organic and homemade food brought to the dining rooms of large corporations

Carlota Mateos and Juan Vila, co-founders of PlenEat have...

Organic and homemade food brought to the dining rooms of large corporations
In The News
Climeworks added to Microsoft’s climate portfolio

EIT Climate-KIC supported Climeworks, a carbon capture technology, is...

Climeworks added to Microsoft’s climate portfolio
In The News
Circular Slovenia named in 100 Climate Policy Breakthroughs

The peer-to-peer learning platform for governments, Apolitical, included EIT...

Circular Slovenia named in 100 Climate Policy Breakthroughs
In The News
New tool uses satellite imagery to accelerate sustainable agriculture

Supported by EIT Climate-KIC and developed by its partner...

New tool uses satellite imagery to accelerate sustainable agriculture
In The News
EIT Climate-KIC at the Climate Adaptation Summit 2021

EIT Climate-KIC will be taking part in the Climate...

EIT Climate-KIC at the Climate Adaptation Summit 2021
In The News
Green Invest from Stuttgart and Start Park from Florence win Climathon Awards ...

A total of 140 teams of citizen finalists applied...

Green Invest from Stuttgart and Start Park from Florence win Climathon Awards 2020
In The News
Biden’s Opportunity for Reinventing Climate Innovation

Joe Biden will be sworn in today as 46th...

Biden’s Opportunity for Reinventing Climate Innovation
In The News
EIT Climate-KIC’s Open Accelerator: collaboration, not competition

It is no secret that to tackle climate change...

EIT Climate-KIC’s Open Accelerator: collaboration, not competition
In The News
New platform inspires sustainable Nordic wood construction

This week marks the launch of NoMuWood.com, an EIT...

New platform inspires sustainable Nordic wood construction
In The News
European Union launches Pact to support citizen-led climate action

On Wednesday 16 December, the European Commission is launching...

European Union launches Pact to support citizen-led climate action
In The News
“An avalanche of hope and energy”: The power of Paris

Our Climate Champions 2020: Melissa Capcha. Five years on...

“An avalanche of hope and energy”: The power of Paris
In The News
“Let’s find ways to take action within our abilities”

Our Climate Champions 2020: Gopal Kumar Mohoto. Five years...

“Let’s find ways to take action within our abilities”
In The News
“Climate change is outpacing us, there is no time for excuses”

Our Climate Champions 2020: Cristina Aleixendri Muñoz. Five years...

“Climate change is outpacing us, there is no time for excuses”
In The News
COP26 gives Scotland “a platform to showcase… what’s possible”

Our Climate Champions 2020: Kit England. Five years on...

COP26 gives Scotland “a platform to showcase… what’s possible”
In The News
COP26 might be postponed but “climate action cannot wait”

Our Climate Champions 2020: Melani Furlan. Five years on...

COP26 might be postponed but “climate action cannot wait”
In The News
A climate service for flood risk mapping in urban areas

The SaferPlaces project, supported by EIT Climate-KIC, has created...

A climate service for flood risk mapping in urban areas
In The News
Raising climate awareness through art in the Glasgow City Region

The Glasgow City Region uses arts as a means...

Raising climate awareness through art in the Glasgow City Region
In The News
Helping Europe achieve a circular economy transition

EIT Climate-KIC, EIT RawMaterials, EIT Digital, EIT Food, EIT...

Helping Europe achieve a circular economy transition
In The News
EIT Climate-KIC and EASME host WCEF event on circular economy

The World Circular Economy Forum brings together business leaders,...

EIT Climate-KIC and EASME host WCEF event on circular economy
In The News
Citizens across globe eager to contribute to a post-COVID recovery

Over 4,500 citizens from around the world will join...

Citizens across globe eager to contribute to a post-COVID recovery
In The News
Transformative climate action and COP26: Join our webinar

Are you working to deliver transformative change for a...

Transformative climate action and COP26: Join our webinar