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Carbon banking helps families reduce CO2 emissions in Gwangju

Chisako Fukuda's picture

Dr. Kwi-gon Kim, February 2014How can green growth policy be translated into local action? The average household has an important role to play, as was demonstrated in Gwangju, a city of 1.5 million people located 270 km south of Seoul. With an ambitious goal to become carbon-neutral by 2050, the city implemented a carbon banking system which encourages households to act green – resulting in 54% of participating households reducing consumption of electricity, gas and water in four years. Dr. Kwi-gon Kim, Professor Emeritus of Urban Environmental Planning at Seoul National University and Secretary General of Urban Environmental Accords Secretariat, who played a key role in launching the program in Gwangju, explains how and what others can learn from the city’s experience to realize green economic development.

Carbon banking doesn’t sound like something families can do. Why are you targeting households?

We wanted to take a bottom up approach. Carbon banking starts with households, which is important because household and commercial activities account for 39% of greenhouse gas (GHG) emissions in Gwangju.  It also helps to raise public awareness for climate change, enhancing the city’s brand as a low-carbon leader.

How does it work?

A ‘green card’ is issued to participating households, which earn carbon points when there is more than a 5% reduction in the average consumption of electricity, city gas, and drinking water in the past six months compared to the average of the previous two years. They also get points when they buy registered eco-friendly products, or take public transportation – so it incentivizes green behavior. Accumulated points can be used to purchase green goods or to get discounts at national parks and other benefits.

Are households actually helping to reduce emissions?  

Participation increased from 20,327 to 281,730 households in the four-year pilot period beginning in 2008, and 54.3% of participating households successfully reduced consumption of electricity, city gas and drinking water. Cumulative emission reductions totaled 84.2 kilotons of CO2. Gwangju hopes to have all 500,000 households participating by 2020, with cumulative emission reductions projected to reach 973.2 kilotons of CO2.

Why were you able to expand so quickly?

Gwangju has a vision to meet all its energy demands from natural energy sources by 2050 and aims to adopt policies that support economic development through environmental actions. It is a testing ground for innovative policy, planning, governance and technology packages. So political will and a citizen's movement to make the city carbon-free were key. All actors worked together for this common goal.

What were the respective roles of the city, utility companies, banks, and citizens? 

For the pilot phase, agreements were made between Gwangju Metropolitan Government and Gwangju Bank, Korea Environment Corporation, utilities and billing companies. Gwangju Metropolitan Government managed data analysis on consumption and energy use reductions. Utility companies reported data on energy use to the city and Korea Environment Corporation, which processed data. Gwangju Bank issued carbon points, benefiting from increased usage of green cards, which can be used as ordinary debit cards linked to bank accounts. All local banks will be involved starting in 2014. Promotion and public education was managed by the Green Start Network, an NGO supported by the Ministry of Environment. Households were informed of how to reduce energy consumption – by lowering room temperature while sleeping, using appliances with energy saving certificates, purchasing green goods or installing solar panels.

How would you advise other cities, especially in developing countries, that are interested in implementing a similar scheme?

I would say, invite all who need to be involved to a meeting. Cooperation between the city, banks, utilities, billing company, civil society and households is very important. The availability and quality of data, particularly in less developed countries, are also critical. Sources of GHG emissions cannot always be measured easily. In Gwangju, we emphasized practicality. This is why we selected  electricity, city gas and drinking water at the pilot stage because this can be measured easily by meters at the household level. Many cities do have a billing system, so data can be provided for these three sectors. We are also developing an urban GHG accounting and carbon planning tool to support the carbon banking system that can be used by other cities. Gwangju Metropolitan Government is exploring opportunities to share accumulated technologies and experiences with developing country cities and is working closely with the Low Carbon, Livable Cities Initiative (LC2) of the World Bank.

Photo credit: Chisako Fukuda, World Bank

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