A comparative analysis of Copenhagen's and Vienna's climate targets

MASTERTHESIS

University of Copenhagen, Copenhagen

Supervisor: Kjeld Rasmussen

University of Natural Resources and Life Sciences, Vienna

Co-Supervisor: Helga Kromp-Kolb

Author: Eva Christine Pangerl 2014

Abstract

This study analyses Copenhagen's and Vienna's accounting schemes and climate plans and shows how to improve Vienna's climate strategy on the basis of Copenhagen's climate plan. Copenhagen

seeks to be the first climate neutral capital in the world by 2025, receiving worldwide attention for its climate efforts. Therefore the motivation of this study is to investigate Copenhagen's method of becoming carbon neutral in more detail and to apply it to Vienna.

Since GHG accounting (greenhouse gas accounting) is a central theme in climate planning, it is thoroughly elaborated. Aside from Copenhagen's and Vienna's GHG accounts, the first international standard on city GHG accounting, GPC (Global Protocol for Community-Scale Greenhouse Gas Emission Inventories), is also introduced as an alternative to Copenhagen's and Vienna's current climate accounts. Further analysis shows that large amounts of GHG emissions are embedded in the

cities' consumption, which is why the consumption-based accounting system by the consulting company NIRAS is presented as well. A baseline scenario for the GHG emissions of Vienna is developed projecting how the emissions could develop from now until 2030 provided that no policies or initiatives are initiated by the City of Vienna. Copenhagen's method of reaching carbon neutrality consists of emission reductions and compensation methods. Copenhagen's ratio of these two

measures is applied to Vienna's emissions in 2030 to see how many emissions Vienna would need to reduce to reach carbon neutrality. Last but not least, this study discusses the meaning of carbon neutrality and how misleading interpretations of the term can be avoided. It additionally elaborates on Copenhagen's experience with its climate plan concerning brand recognition and non-climate benefits.

The study is based on literature analysis, semi-open interviews with experts from Copenhagen, and calculations for Vienna's baseline scenario and its consumption-based emissions. The results of the baseline scenario show that Vienna's emissions will decrease by 9% from 8.5 mill t CO2e to 7.7 mill tons of CO2e in 2030. Vienna can reach Copenhagen's interpretation of carbon neutrality by 2030 if this 7.7 mill t CO2e are further reduced by 5.4 mill t CO2e and if the remaining 2.3 mill tons CO2e are

compensated. Furthermore, a 3-step plan is developed that can eliminate Vienna's accounting weaknesses, which were identified by this study. Step 1 recommends establishing a comprehensive report about Vienna's currently available GHG data and its accounting methods. Step 2 suggests implementing the GPC and including emissions by EU ETS and Step 3 advocates a consumption-based accounting assessment to identify and address consumption-based emission hotspots.

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Acknowledgements

I would like to thank my parents, my sister and all the people that have supported me and without whom the completion of this thesis would not have been possible.

Next, I would like to thank my supervisor, Kjeld Rasmussen, and Co-Supervisor, Helga Kromp-Kolb, for all of their advice throughout these past months.

Finally, I would like to thank all of the interviewees for taking their time to meet me for an interview and for sharing their experience and knowledge with me. Special thanks also to the City of Copenhagen and the City of Vienna, who have provided me with such valuable information.

I feel fortunate to have been able to do this research about Copenhagen and Vienna, two cities that I truly love. Thank you.

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Table of Content List of Figures.................................................................................................................................................... 6

List of Tables ..................................................................................................................................................... 9

List of Equations.............................................................................................................................................. 11

List of Abbreviations....................................................................................................................................... 12

Dictionary......................................................................................................................................................... 13

1 Introduction.............................................................................................................................................. 14 1.1 Background......................................................................................................................................................... 14 1.2 Field of Enquiry ................................................................................................................................................... 15 1.3 Outline ................................................................................................................................................................ 16

2 Methodology and data sources.............................................................................................................. 18

I - THEORY............................................................................................................................................ 20

3 Theory of Carbon Accounting and Climate Neutrality ......................................................................... 21 3.1 Carbon Accounting.............................................................................................................................................. 21

3.1.1 Definition of Carbon Accounting ................................................................................................................. 21 3.1.2 National greenhouse gas inventories.......................................................................................................... 21 3.1.3 Greenhouse gas accounting in cites ........................................................................................................... 22 3.1.4 Consumption- and production-based accounting ........................................................................................ 22 3.1.5 Carbon Footprint in cities............................................................................................................................ 25

3.2 Carbon neutrality................................................................................................................................................. 26 3.2.1 Definition of carbon neutrality ..................................................................................................................... 26 3.2.2 Offset ......................................................................................................................................................... 26 3.2.3 Carbon neutrality within the Copenhagen's Climate target .......................................................................... 27

II - FRAMEWORK CONDITIONS FOR COPENHAGEN AND VIENNA .............................................. 28

4 Overview of climate targets on different levels..................................................................................... 29

5 International, European and national frameworks................................................................................ 30 5.1 Global climate targets.......................................................................................................................................... 30 5.2 EU climate targets............................................................................................................................................... 30 5.3 National Frameworks - Denmark and Austria ...................................................................................................... 33

5.3.1 Country Profiles Denmark and Austria........................................................................................................ 33 5.3.2 GHG emissions trends and projection Denmark and Austria....................................................................... 33 5.3.3 Energy Landscapes - Austria and Denmark................................................................................................ 37 5.3.4 Comparison between Denmark's and Austria's GHG emissions and energy landscapes ............................ 39

6 Introduction to the Cities of Copenhagen and Vienna ......................................................................... 40 6.1 City Profiles......................................................................................................................................................... 40 6.2 Political and Geographical borders...................................................................................................................... 41

6.2.1 Copenhagen: The City of Copenhagen, Greater Copenhagen and the Capital Region of Denmark ............ 41 6.2.2 Vienna: The City of Vienna and the Federal Land Vienna........................................................................... 44

6.3 Copenhagen and Vienna as smart cities ............................................................................................................. 44 6.4 Comparison of Copenhagen's and Vienna's framework conditions...................................................................... 45

III - ACCOUNTING ................................................................................................................................ 47

7 Copenhagen's and Vienna's accounting systems and GHG emissions............................................. 48 7.1 Copenhagen GHG accounting and emissions ..................................................................................................... 48

7.1.1 Copenhagen's accounting: Municipal CO2 Inventory Tool (MCIT) .............................................................. 48 7.1.2 GHG emissions Copenhagen 2011 and past trends ................................................................................... 51

7.2 Vienna GHG accounting and emissions .............................................................................................................. 53 7.2.1 Vienna's accounting schemes: BLI and CVA .............................................................................................. 53 7.2.2 GHG emissions 2011 and past trends Vienna (BLI and CVA)..................................................................... 57 7.2.3 Excurse: Calculation of Vienna's GHG emissions RE adjusted................................................................... 60

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8 Alternative accounting schemes............................................................................................................ 63 8.1 Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC).......................................... 63 8.2 Consumption-based GHG accounting by NIRAS................................................................................................. 67

8.2.1 Consumption-based GHG emissions 2008 Capital Region of Denmark...................................................... 69 8.2.2 Calculation of Vienna's consumption-based carbon emissions ................................................................... 70

9 Analysis of different accounting schemes............................................................................................ 76 9.1 Comparison of different accounting methodologies ............................................................................................. 76 9.2 Comparing emissions levels calculated by different accounting methods ............................................................ 79 9.3 Analysis of selected aspects within Vienna's current accounting systems............................................................ 82

9.3.1 GHG Data availability in Vienna.................................................................................................................. 82 9.3.2 Data controversy ........................................................................................................................................ 83 9.3.3 Accounting Principles ................................................................................................................................. 84

9.4 Identified issues within Copenhagen's and Vienna's accounting schemes........................................................... 85

III - CLIMATE TARGETS ...................................................................................................................... 88

10 Climate Plans of Copenhagen and Vienna ........................................................................................ 89 10.1 Climate Plan Copenhagen................................................................................................................................... 89

10.1.1 Copenhagen's policy papers related to CPH 2025 Climate Plan................................................................. 89 10.1.2 CHP 2025 Climate Plan.............................................................................................................................. 90

10.2 Vienna's Climate Protection Program - KliP II.................................................................................................... 100 10.2.1 Policy papers related to KliP II .................................................................................................................. 100 10.2.2 Vienna's climate protection plan KliP II ..................................................................................................... 102

10.3 Comparison between Copenhagen's and Vienna's Climate Plans ..................................................................... 104

11 Calculation of Vienna's GHG baseline scenario 2010-2030 ........................................................... 107 11.1 Vienna's baseline scenario - The base study..................................................................................................... 107 11.2 Vienna's baseline scenario - Methodology and data sources............................................................................. 109 11.3 Vienna's baseline scenario - Results ................................................................................................................. 112 11.4 Vienna's baseline scenario - Main considerations.............................................................................................. 116

12 Scaling Copenhagen's reduction plan to Vienna............................................................................ 118

13 Climate targets from different perspectives.................................................................................... 120 13.1 Copenhagen's climate targets ........................................................................................................................... 120 13.2 Vienna's climate targets .................................................................................................................................... 121

IV - DISCUSSION................................................................................................................................ 123

14 Discussion.......................................................................................................................................... 124 14.1 Vienna's accounting scheme - missing opportunities?....................................................................................... 124 14.2 GPC - an alternative to Vienna's accounting scheme? ...................................................................................... 125 14.3 Consumption-based accounting - essential to tackle climate change?............................................................... 126 14.4 EU-ETS - the low hanging fruits? ...................................................................................................................... 128 14.5 Recognition value and non-climate benefits - Copenhagen's success to achieve carbon neutrality? ................. 130 14.6 Carbon neutrality - a valid statement? ............................................................................................................... 131 14.7 A carbon neutral Vienna?.................................................................................................................................. 133

V - FINAL RECOMMENDATIONS AND CONCLUSION ................................................................... 135

15 Recommendations for Vienna .......................................................................................................... 136 15.1 The 3-step plan ................................................................................................................................................. 136 15.2 Climate Plan...................................................................................................................................................... 138

16 Conclusion ......................................................................................................................................... 139

VI - REFERENCES ............................................................................................................................. 141

17 References ......................................................................................................................................... 142

VII - APPENDICES.............................................................................................................................. 151

18 Appendices ........................................................................................................................................ 152

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List of Figures

Figure 3-1: Overlap between production-based and consumption-based emissions ........................... 23

Figure 7-4: GHG emissions per capita by Emikat.at (without companies covered by EU ETS) and BLI

Figure 8-2: Layers and geographical allocation of Input/output tables used in consumption based

Figure 9-1: Accounting of GPC's/Copenhagen's (Scope 2) and Vienna's (Scope 1) grid-supplied

Figure 3-2: Production-based and consumption-based accounting at different geographical scales... 24

Figure 3-3: Five steps to reach carbon neutrality .................................................................................. 26

Figure 5-1: EU 2050 climate roadmap .................................................................................................. 32

Figure 5-2: Denmark - GHG trends and projections 1990-2020 - total emissions ................................ 34

Figure 5-3: Denmark - GHG trends and projections 1990-2020 - emissions by sector ........................ 35

Figure 5-4: GHG trends and projections in Austria 1990-2020 - total emissions.................................. 35

Figure 5-5: GHG trends and projections by sector 1990-2020 Austria ................................................. 36

Figure 5-6: Danish energy policy milestones up to 2050 ...................................................................... 38

Figure 6-1: The Capital Region of Denmark.......................................................................................... 42

Figure 6-2: Greater Copenhagen .......................................................................................................... 43

Figure 6-3: The City of Copenhagen ..................................................................................................... 43

Figure 6-4: Austria and Vienna.............................................................................................................. 44

Figure 7-1: GHG emissions 2005-2012 Copenhagen........................................................................... 53

Figure 7-2: CO2 emissions from road traffic in Austria ......................................................................... 55

Figure 7-3: GHG emissions by BLI and Emikat (without companies covered by EU ETS) Vienna 1990 and 2009................................................................................................................................................ 58

Vienna 1990 and 2009 .......................................................................................................................... 58

Figure 7-5: GHG emission trend according to BLI by sector Vienna 1990-2010 .................................. 59

Figure 7-6: CO2 emissions according to BLI with but with EMIKAT-transport by sector Vienna 1990-2010....................................................................................................................................................... 59

Figure 8-1: Sources within the scopes of GPC ..................................................................................... 65

accounting ............................................................................................................................................. 68

Figure 8-3: Citizen's Climate footprint in the Capital Region of Denmark 2008.................................... 70

energy (electricity and district heating) .................................................................................................. 78

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Figure 9-2: GHG emission per capita 2011 Copenhagen and Vienna.................................................. 80

Figure 10-8: Development CO2 traffic in Vienna 1990-2010 and Vienna's reduction target in the

Figure 11-2: GHG emissions "with additional measures" by sectors: trends (1990-2010) and

Figure 12-1: Vienna's Reduction Plan to achieve climate neutrality by 2030 assuming that complete

Figure 9-3: GHG emissions per capita by sector 2011 Copenhagen and Vienna ................................ 81

Figure 10-1: Copenhagen's baseline scenario 2012............................................................................. 92

Figure 10-2: Required CO2 reduction to reach carbon neutrality - Copenhagen ................................. 92

Figure 10-3: Emission reductions by different initiatives and main areas of activity ............................. 95

Figure 10-4: Main areas of action and its contribution to the total reduction (100%)............................ 95

Figure 10-5: Investments in Copenhagen by different stakeholders..................................................... 99

Figure 10-6: Combines municipal investment 2013-2025................................................................... 100

Figure 10-7: The Smart City Wien Framework Strategy and its mid-term strategy papers ................ 101

transport sector.................................................................................................................................... 103

Figure 11-1: Key underlying input parameters of emission projections for WAM and WEM .............. 108

projections (2010-2030) Austria .......................................................................................................... 109

Figure 11-3: GHG emissions with BLI accoutning 2010-2030 Vienna................................................ 113

Figure 11-4: GHG emissions with CVA (Transport by Emikat and excluding EU ETS) 2010-2030 Vienna.................................................................................................................................................. 114

Figure 11-5 GHG emissions with BLI but Transport by emikat.at 2010-2030 Vienna ........................ 115

scaling of Copenhagen's reduction measures is possible................................................................... 119

Figure 13-1: Copenhagen's emissions in 2025 by different accounting methods............................... 120

Figure 13-2: Copenhagen's per capita emissions in 2025 by different accounting methods.............. 120

Figure 13-3: Vienna's GHG emissions targets and baseline projections 2010-2050.......................... 121

Figure 13-4: Vienna's per capita GHG emissions targets and baseline projections 2010-2050......... 122

Figure 18-1: Austria - Primary Energy Production 1990-2012 ........................................................... 153

Figure 18-2: Denmark - Primary Energy Production 1990-2012......................................................... 153

Figure 18-3: Austria - Production of Renewable Energy 1990-2012................................................... 154

Figure 18-4: Denmark - Production of renewable energy 1990-2012 ................................................. 154

Figure 18-5: Austria - Gross Energy Consumption 1990-2012 ........................................................... 155

Figure 18-6: Denmark - Gross Energy Consumption 1990-2012 6 ..................................................... 155

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Figure 18-7: Austria - Final Energy Consumption by sectors 1990-20127 .......................................... 156

Figure 18-8: Denmark - Gross Energy Consumption by use 1990-2012............................................ 156

Figure 18-9: Copenhagen's baseline scenario 2008........................................................................... 165

Figure 18-10: Copenhagen's baseline scenario 2012......................................................................... 165

Figure 18-11: Population growth in contrast to emission decrease - Baseline Scenario Copenhagen 2005-2025............................................................................................................................................ 167

Figure 18-12: Economic gain/cost from energy initiatives [DKK mill - net present value]................... 169

Figure 18-13: Economic gains/costs from traffic initiatives [net present value in DKK mill]................ 169

Figure 18-14: Employment effect of the CPH 2025 Climate Plan ....................................................... 170

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List of Tables

Table 1: Scopes of emissions................................................................................................................ 25

Table 2: Greenhouse gas emission reduction and renewable energy targets EU, Denmark, Austria, Copenhagen and Vienna 2008-2050 .................................................................................................... 29

Table 3: EU sector specific targets for 2030 and 2050 ......................................................................... 32

Table 4: Country Profiles ....................................................................................................................... 33

Table : City Profiles ............................................................................................................................. 40

Table 6: Comparison of the framing of Copenhagen and Vienna ......................................................... 46

Table 7: Tier-levels in MCIT .................................................................................................................. 49

Table 8: GHG emissions by sectors 2011 Copenhagen ....................................................................... 52

Table 9: CO2e emissions 2011 Vienna by sector ................................................................................. 57

Table : CO2 emissions 2011 Vienna CVA ........................................................................................ 57

Table 11: Data for the calculation of Vienna's CO2 emissions RE adjusted 2011................................ 61

Table 12: Vienna's CO2 emissions RE adjusted for the sector Energy Supply 2011........................... 61

Table 13: Scopes within GPC................................................................................................................ 64

Table 14: Sources and scopes required under BASIC, BASIC+ 1 and Expanded ............................... 66

Table : Data quality assessment ....................................................................................................... 67

Table 16: Consumption-based CO2 emissions of Austria and Denmark.............................................. 72

Table 17: Consumption based CO2 per capita in Vienna with 20/80 method ...................................... 73

Table 18: Consumption-based CO2 emissions per capita, GDP corrected 2009................................. 74

Table 19: Comparison of MCIT, BLI and CVA ...................................................................................... 77

Table : GHG data BLI and traffic emissions by emikat.at 2011 ........................................................ 83

Table 21: Individual reduction measures and its contributions to key reduction areas and total required reduction target...................................................................................................................................... 98

Table 22: Climate Plans of Copenhagen and Vienna ......................................................................... 105

Table 23: CO2e Conversion factors .................................................................................................... 110

Table 24: Allocation of BLI sectors to base-study sectors .................................................................. 110

Table : Population 2010-2030 Vienna and Austria.......................................................................... 111

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Table 26: Average share of industry and energy supply emissions covered by the EU ETS 2007-2011 ............................................................................................................................................................. 112

Table 27: Projected GHG emissions total and per capita with to accounting format BLI 2010-2030 . 114

Table 28: Projected GHG emissions total and per capita according with accounting format CVA (excluding EU ETS emissions and transport emissions by emikat.at) 2010-2030.............................. 115

Table 29: Projected GHG emissions total and per capita according with accounting format BLI but transport by emikat.at 2010-2030........................................................................................................ 116

Table 30: Potential progress by following the recommendations........................................................ 136

Table 31: Primary energy production - Demark and Austria ............................................................... 153

Table 32: Production of renewable energy - Denmark and Austria .................................................... 154

Table 33: Gross energy consumption - Denmark and Austria ............................................................ 155

Table 34: Gross energy consumption of Denmark and final energy consumption of Austria ............. 156

Table 35: GHG data BLI ...................................................................................................................... 162

Table 36: Assessment of emissions by BLI with traffic emissions by emikat.at 1990-2011 ............... 163

Table 37: GHG emissions by BLI and traffic emissions by emikat.at 2011 ........................................ 164

Table 38: CO2 emissions in 2010 and projections 2015œ2030, scenario —with additional measures“ 171

Table 39: CH4 emissions in 2010 and projections 2015œ2030, scenario —with additional measures“ 172

Table 40: N2O emissions in 2010 and projections 2015œ2030, scenario —with additional measures“ 173

Table 41: HFC, PFC and SF6 emissions in 2010 and projections 2015œ2030, scenario —with additional measures“............................................................................................................................................ 173

Table 42: Data to Chapter 13 .............................................................................................................. 174

Table 43: Data to Chapter 13 .............................................................................................................. 175

Table 44: Data assessment for MCIT.................................................................................................. 205

Table 45: Data assessment for Copenhagen's baseline scenario ...................................................... 207

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List of Equations

Equation 1: Elaborating inventory data by application of a scaling factor ............................................. 49

Equation 2: Elaborating inventory data by application of a the scaling factor - in the case of individual heating ................................................................................................................................................... 50

Equation 3: RE adjustment Copenhagen .............................................................................................. 51

Equation 4: Conversion from emissions by BLI to emissions by CVA .................................................. 56

Equation 5: Renewable energy adjustment Copenhagen..................................................................... 60

Equation 6: Emission factor approach for calculating GHG emissions................................................. 67

Equation 7: Definition of consumption-based CO2 emissions by OECD.............................................. 72

Equation 8: GDP adjustment ................................................................................................................. 72

Equation 9: BLI emissions adjusted by emikat.at traffic emissions....................................................... 84

Equation 10: Definition of Carbon neutrality.......................................................................................... 93

Equation 11: Austria's GHG emission per capita growth factor .......................................................... 111

Equation 12: Projected GHG emissions per capita Vienna................................................................. 111

Equation 13: BLI emissions adjusted by emikat.at traffic emissions................................................... 163

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List of Abbreviations

DK Denmark

CPH Copenhagen

AUT Austria

VIE Vienna

MD Municipal Department

CPH 2025 Climate Plan The Copenhagen Climate Plan 2025

KliP Climate Protection Program, Vienna

MCIT Municipal CO2 Inventory Tool, Denmark

RE adjusted Renewable electricity adjusted

BLI Federal Länder Air Pollution Inventory

CVA City of Vienna Greenhouse Gas Emission Assessment

UNFCCC United Nations Framework Convention on Climate Change

COP Conference of the Parties to the UNFCCC

GPC Global Protocol for Community-Scale Greenhouse Gas Emission Inventory

GHG Greenhouse gas

CO2e Carbon dioxide equivalent

CO2 Carbon dioxide

CH4 Methane

N2O Nitrous oxide

EF Emission factor

mill Million

km× Squared kilometers

kg Kliogram

t Metric ton

GDP Gross domestic product

⁄ Euro

DKK Danish Krone

n.d. No date

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Dictionary

English Danish

City of Copenhagen Københavns Kommune

Capital Region of Denmark Region Hovedstaden

Municipal CO2 Inventory Tool Kommunejksagsk CO2-regnskab

English German

Federal Länder Bundesländer

Federal Länder Air Pollution Inventory Bundesländer Luftschadstoffinventur

Executive Office for the Coordination of Magistratsdirektion - Klimaschutzkoordination Climate Protection Measures

Glossary

CVA - City of Vienna Greenhouse Gas Emission Assessment

This term is used to describe the City of Vienna's own GHG accounting system. In the literature it is sometimes referred to as Emikat, but to avoid confusion with the emission model Emikat, it is defined as CVA in this study.

emikat.at

This term is used to describe the model that is used to assess Vienna's in-boundary traffic emissions. In the literature this model is mainly called Emikat.

Baseline scenario

The baseline scenario is the projected GHG emission development of Copenhagen or Vienna, provided that no further GHG reducing policies or initiatives are initiated by the City of Copenhagen or Vienna.

Renewable electricity

Electricity generated by renewable energy

Compensation method

This term is used to describe Copenhagen's way of reaching carbon neutrality: Copenhagen will reduce some of its emissions and will compensate the remaining emissions. Copenhagen compensates its emissions by implementing renewable power generation to replace fossil fuel based power generation.

RE adjustment - Renewable electricity adjustment

This is a method used by the City of Copenhagen to take credit for its renewable electricity production. It can take credit for the renewable electricity generation inside Copenhagen, and outside

Copenhagen, if the City of Copenhagen had a major contribution to its establishment. The GHG emissions that are reduced by Copenhagen's renewable electricity production can be subtracted from Copenhagen's annual GHG emissions (see Equation 3).

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1 Introduction

1.1 Background

Today approximately 50% of people worldwide live in cities and the trend of urbanization is expected to continue throughout the century, reaching 70% by 2050.1 Urban areas consume between 60% and 80%2 of total energy production and by 2030 75% of EU's energy consumption will be allocated to cities.3 This extensive energy consumption is accompanied by large amounts of CO2 emissions causing global warming.

Even though cities cause large shares of CO2 emission they can also be a main part of the climate solution. Cities have a huge advantage compared to more dispersed areas. Higher density correlates with a lower energy consumption which is why emissions per capita in cities are typically lower than

emissions per capita in rural areas within the same country.4 The OECD demonstrated that cities can use energy more efficiently than rural areas since cities have the advantages of the economics of scale.5 Moreover, many green technologies such as district heating, district cooling or collective transportation thrive better in dense areas which again gives cities the advantage.6 Last but not least, local authorities are better suited than national authorities to develop innovative solutions tailored for

the local conditions.7

Besides climate benefits, green technologies often add advantages such as public health benefits, energy security and improved urban quality of life. In addition, energy efficiency measures often

substantially reduce city expenses on energy.8

Copenhagen has realized this situation and strives to become the first carbon neutral capital in the world. In 2009, the City of Copenhagen announced its vision to become carbon neutral by 2025 and finally, in 2012, they published the "CPH 2025 Climate Plan", the core document outlining the roadmap

to climate neutrality. Besides decreasing the emissions, Copenhagen's motivation is also to accelerate green growth and innovation and to reduce other issues of urbanization such as traffic congestion. This in turn also improves the image of the city and makes it more attractive for citizens, businesses and visitors.

Considering that Copenhagen's climate plan has shown that it is feasible to reach carbon neutrality, the question arises why this climate plan has not been applied to other cities. The focus of this study will be the similarly developed and innovative city of Vienna. An assessment of the possibility of a carbon neutral Vienna based on the mechanisms of the Copenhagen Climate Plan has not yet been

conducted. Therefore, this study strives to collect favorable approaches for a future climate protection plan in Vienna to aid the journey towards carbon neutrality.

1 OECD (2010, pp 39œ40) 2 OECD (2010, p 17) 3 OECD (2010, p 50) 4 Dodman (2009, p 189) 5 OECD (2010, p 17) 6 Rasmussen (2014b) 7 OECD (2010, p 21) 8 OECD (2010, p 20)

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A core element within reaching carbon neutrality is the applied accounting method. Carbon emissions within Copenhagen will reach net zero which differs from completely eliminating carbon emissions. Furthermore, Copenhagen's citizens' carbon footprint will entail carbon emissions beyond 2025 since

consumption-based carbon emissions are not considered in Copenhagen's climate plan. Nevertheless, there is a drive around Copenhagen's climate ambitions that shall not be underestimated and that is worth discussing for future implementation in other cities.

1.2 Field o f Enquiry

The following paper investigates what approaches within Copenhagen's Climate Plan are beneficial to improve Vienna's future climate plan and accounting scheme. The analysis focuses on Copenhagen's and Vienna's GHG accounts and their climate protection plans, as well as giving an assessment of their weaknesses followed by a screening of alternative solutions.

This implies the following research question and research sub-questions:

How can Vienna's GHG reduction strategy and its accounting scheme be improved on the

basis of Copenhagen's climate plan?

• What are the strengths and weaknesses of Copenhagen's and Vienna's accounting methods/systems? What alternative GHG accounting systems are there to represent realities more correctly?

• How does the choice of the accounting method impact the current GHG emissions and target GHG emissions of Copenhagen and Vienna?

• What accounting methods could be recommended to Vienna to ensure a solid and comprehensive data foundation for its future climate strategy?

• How much GHG emissions would Vienna have to reduce to achieve carbon neutrality according to Copenhagen's accounting method?

• Could Vienna realistically improve the GHG reduction plans on the basis of experience and inspiration from Copenhagen, or are the situations and institutional settings of the two cities

too different?

• What are the risks and opportunities related to the target carbon neutrality? What does carbon neutrality mean, and how can misleading interpretation of the term be avoided? What is Copenhagen's experience concerning brand recognition and non-climate benefits?

Since the foundation of the study is the Copenhagen Climate Plan "CPH 2025 Climate Plan", this strategy is explained in detail. Furthermore, special emphasis is put on the comparison between GHG

accounting schemes and the climate plans of Copenhagen and Vienna as well as the assessment of their influence on calculated GHG emissions and climate targets. To allow comparison between consumption-based and production-based emissions, consumption-based emissions from the Capital Region of Denmark are taken to represent Copenhagen's consumption-based emissions and Vienna's consumption-based emissions are estimated with a simple calculation.

The report identifies and discusses issues within the individual accounting schemes of Copenhagen (MCIT) and Vienna (BLI and CVA). The study limits itself to problematic aspects related to the heterogeneity of carbon accounts, production- and consumption-based accounting, the compensation method, the level of detail within GHG data as well as data reporting and the exclusion of emissions by

the EU ETS sector. It does not intend to elaborate on all possible aspects related to carbon

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accounting. Moreover, the issue of defining biomass as carbon neutral is briefly outlined, but the study refrains from a further comprehensive elaboration on that topic to stay within the scope of a master thesis.

The paper should not only compare current accounting schemes between the two cities but also question their methodology and investigate alternatives. The two alternatives presented in this report are the consumption-based accounting scheme developed by the consulting company NIRAS and the

Global Protocol of Community-Scale Greenhouse Gas Emission Inventories (GPC), which is the first international standard for GHG accounting on the city and community scale. These two alternatives were selected to illustrate potential solutions for issues related to current accounting schemes. The study forgoes conducting a comprehensive literature review to assess potential alternative accounting schemes, since this would go beyond the scope of the study.

It is also noted that the study comprises overall emissions, emission targets and accounting schemes, and does not elaborate on sector specific conditions such as traffic, electricity and heating infrastructure, supply and consumption in Copenhagen or Vienna. These related topics are

recommended for assessment in future investigations since it would exceed the scope of this study.

To provide a first impression of the applicability of Copenhagen's climate target to Vienna, a baseline scenario from now to 2030 is calculated based on the Austrian emission growth factors and subsequently Copenhagen's reduction measures are applied to Vienna's projected baseline emissions

in 2030. This assessment is limited to the theoretical assumption that the scaling of Copenhagen's emission cuts for individual measures is applicable, and that Vienna and Copenhagen have the same preconditions. Therefore the results are not optimized or evaluated on actual feasibility. The study primarily refrains from analyzing GHG reduction potentials for Vienna and abstains from taking economic implications into account as has been done in Copenhagen with more time and resources.

However, it is highly recommended to investigate these steps in future studies.

1.3 Outline

The main body of this study is structured into theory, framework conditions, accounting, climate

targets, discussion and recommendations for Vienna.

The first part of the study provides theoretical background on GHG accounting, in particular to clarify the difference between national and city accounting, as well as production-based and consumption-

based accounting, and defines carbon neutrality in line with offset and compensation methods.

Furthermore, the overall framework conditions of the two cities are elaborated. First of all, the international, EU and climate targets are explained which are followed by an outline of national past

and future GHG emissions trends and projections of Austria and Denmark. Since energy is the major contributor to the national GHG emissions, the countries' energy landscapes and future energy strategies are briefly explained. Thereafter, an introduction to the cities of Copenhagen and Vienna is presented, which includes basic facts such as population size and GDP, their geographical and political boundaries, which will also explain the difference between the City of Copenhagen and the

Greater Copenhagen Region, and their city images, institutions and networks regarding ”smart city‘. A comparison of the two cities will demonstrate that the cities have similar framework conditions except for their respective national GHG development.

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To build the relevant foundation for the assessment, Copenhagen's and Vienna's GHG accounting methods and its respective emissions of 2011 are presented. Alternative accounting schemes are necessary for the ongoing assessments as an international standard for city accounting (GPC) and a

consumption-based accounting method by the consulting company NIRAS are presented as well. NIRAS's calculated consumption-based emissions for the Capital Region of Denmark are presented and subsequently Vienna's consumption-based emissions will be estimated with simple calculations. Last but not least, the different accounting schemes are compared to each other and their impact on emission levels are explained. This part of the study concludes with identifying weaknesses of

Copenhagen's and Vienna's accounting schemes.

The following section compares Copenhagen's and Vienna's Climate Plans. As the Copenhagen Climate Plan is a main focus of this study it is described in detail. Based on the fact that Vienna's

Climate Protection Plan does not project Vienna's emissions as Copenhagen does, a baseline scenario for Vienna built on Austria's emission growth factors is established. Subsequently, Copenhagen's target of becoming carbon neutral is applied to Vienna's emissions in 2030 to see how many emissions would need to be reduced to achieve the same target by 2030. Finally Copenhagen's and Vienna's climate targets are analyzed from different perspectives. This analysis is based on the

findings within Vienna's baseline emissions, the applied carbon neutral target for Vienna and the differences in accounting schemes identified in the previous chapter.

Finally, several key topics are discussed which will aid final recommendations and conclusions. In

particular alternative accounting schemes for Vienna and their advantages and disadvantages are addressed. Furthermore, Copenhagen's compensation method, which is used to achieve carbon neutrality, is discussed and the non-climate benefits associated with Copenhagen's climate strategy are discovered. Last but not least the potential of a carbon neutral Vienna is roughly outlined. The discussion is enriched with input from several expert interviews conducted in Copenhagen and is

amended with literature where appropriate.

The final recommendations for Vienna consist of a 3-step plan that ensures the elimination of all

identified issues within Vienna's current accounting system. Additionally, suggestions are made to

further address the vision of a carbon neutral Vienna and to investigate Vienna's potential to achieve

carbon neutrality in the future.

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2 Methodology and data sources

Overall the analytical procedure is based on the Copenhagen's Climate Plan "CPH 2025 Climate Plan" as well as the corresponding baseline scenario and GHG accounting system "MCIT", which are analyzed in detail. The assessment was continued by searching for similar documents and data for

Vienna. Less specific documents and data were available for Vienna and therefore it was attempted to establish some data by calculations. The establishment of a bottom-up GHG inventory for 2012 for Vienna and a bottom-up baseline scenario for Vienna from now to 2030 was intended, but after confronting too many challenges it had to be realized that such an assessment would be beyond the scope of this study. Therefore Vienna's baseline scenario was calculated based on Austrian emission

projections and largely aggregated GHG data for Vienna was used. Beyond that, Vienna's consumption-based emissions and emissions according to Copenhagen's accounting method MCIT (RE adjusted) were calculated. Methodologies applied to these three assessments are described directly within their corresponding chapters. At the same time weaknesses within the individual accounting schemes were identified and mayor differences among the accounting methods were

realized. To receive more clarity about their impact on calculated and target emissions current and future emissions with different accounting methods were contrasted. Additionally, alternative accounting methods were consulted and interviews were conducted to discuss the identified issues. Besides the discussion of weaknesses within accounting schemes, the interviews were also used to investigate advantages for setting a clear and tangible climate protection target such as "Carbon

neutrality by 2025" and the compilation and publication of comprehensive GHG accounts. The collected data and information is used to establish recommendations for Vienna on a future version of Vienna's GHG accounting and climate protection plan.

The main tools to assess the research questions were a literature analysis, own calculations and the conduction of interviews. Own calculations were applied mainly for estimating Vienna's consumption-based emissions, Vienna's emissions RE adjusted9 and Vienna's baseline scenario. Beyond that, simple comparisons and contrasts of the findings were displayed by graphs and tables to apprehend results. As already stated above, the corresponding methodologies for the specific calculation are

explained in subchapters previous to their results and are not elaborated in this chapter.

Literature and data for the individual sections were collected with a standard literature search by applying corresponding keywords to online search engines and by screening public institution's websites, publications and databases. The main data sources were public authorities such as the City

of Copenhagen, the City of Vienna, national statistical databases, national environmental agencies and the European Commission. Missing data or literature was requested by email. Mainly the Administrative Departments of the City of Vienna and the Environment Agency Austria were contacted to clarify questions related to BLI, CVA and the general availability of GHG data in Vienna. Beyond that, the report documenting Copenhagen's Baseline Scenario was received by email by Ibsen-Jensen

2014 .

The interviews were face-to-face semi-open interviews conducted by the author of the study and the respective interview partners, which will be further described below. An interview guideline and several

questions were prepared in advance and discussed verbally throughout the interview. The interviews

9 RE adjustment is a accounting method that is used by Copenhagen to acknowledge its renewable electricity production.(see Chapter 7.1.1) 10 Ibsen-Jensen (2014)

18

were recorded and the respective audio files are attached to the study. In addition Appendix X presents the summaries of the interviews.

• Interview with Rune Rasmussen Head of the Cluster Department at Copenhagen Capacity; at Copenhagen Capacity office in Nørregade 7B DK-1165 Copenhagen on 18th August 2014; The interview focused on the general perception of the CPH 2025 Climate Plan, implications for the private sector, city branding and the green and economic motivations behind the climate plan.

• Interview with Simon Kjær Hansen Deputy Director of the Technical and Environmental Administration and Head of the City development and strategy at the City of Copenhagen; at

the Municipality office at Njalsgade 13, 2300 Copenhagen on 19th August 2014. The interview focused on the reactions to and perceptions of CPH 2025 Climate Plan, challenges of implementing the reduction measures, the issue of compensation within the CPH 2025 Climate Plan and future accounting methods.

• Interview with Jørgen Abildgaard Executive Project Director CPH 2025 Climate Plan at the City of Copenhagen; at the Municipality office at Njalsgade 13, 2300 Copenhagen on 21st

August 2014. The interview focused on Copenhagen's accounting scheme, calculation methods of CPH 2025 regarding baseline scenario and reduction measures, the issue of compensation within the CPH 2025, finance and economic implication of CPH 2025 Climate Plan.

• Interview with Anna Claudia Szeler, Energy and climate advisor at NIRAS and Niels Bahnsen, Civil Engineer at NIRAS; at the office of NIRAS Sortemosevej 19 3450 Allerød on 22nd

August 2014. The interview focused on the methodology and other technical questions regarding their consumption based accounting, advantages and challenges of consumption based accounting, adoption of consumption based accounting.

• Interview with Michael Sattler, Deputy Director of the Executive Office for the Coordination of Climate Protection Measures at Vienna City Administration at the administration's office Wipplingerstraße 24-26 1010 Vienna on 22nd September 2014. The interview focused on

accounting schemes, differences between Vienna and Copenhagen regarding climate mitigation, energy supply of Vienna, traffic situation in Vienna, implementation of Klip II.

19

I - THEORY

20

3.1 Carbon Accounting

3.1.1 Definition of Carbon Accounting

3.1.2 National greenhouse gas inventories

3 Theory of Carbon Accounting and Climate Neutrality

The first part of the study provides theoretical background information on carbon accounting and

clarifies the term carbon neutrality in line with the term offset and Copenhagen's compensation methods. The understanding of the different types of accounting and the meaning behind carbon neutrality and compensation seems essential to follow the procedures in the remainder of the study.

The term carbon accounting is used in many different contexts. Mostly the term carbon accounting is associated with national production-based carbon accounting, but there are many different other types of carbon accounting. This chapter also introduces to consumption-based accounting and city accounting and explains their differences.

A comprehensive literature review by Stechemesser et al. (2012) showed that there is a lack of consistent definitions of carbon accounting. He attempts to define carbon accounting over the different scales (national, project, organizational, and product scale) as follows:

"Carbon accounting comprises the recognition, the non-monetary and monetary evaluation and the monitoring of greenhouse gas emissions on all levels of the value chain and the recognition, evaluation and monitoring of the effects of these emissions on the carbon cycle of ecosystems." 11

In this study, the term GHG accounting is used to describe the regular systematical acquisition and reporting of anthropogenic greenhouse gas emissions.

Under UNFCC United Nation Framework Convention on Climate Change Annex 1 parties (OECD countries) are required to submit national GHG inventories. The methodology for assessing the GHG emissions was developed by the IPCC and is mainly based on the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. The reporting of the national GHG inventories comprises a National Inventory Report (NIR) and Common Reporting Format (CRF) tables.12

The national GHG inventories under the UNFCCC reporting obligations represent a production-based accounting system. It has primarily been challenged on its exclusion of international transportation such as international aviation and navigation and its production based accounting approach since it enhances carbon leakage.13

11 Stechemesser & Guenther (2012, p 36) 12 UNFCCC (2014) 13 Peters (2008, p 13)

21

http:leakage.13http:tables.12

3.1.3 Greenhouse gas accounting in cites

3.1.4 Consumption- and production-based accounting

To date most GHG inventories on city levels are based on the accounting framework by the IPCC.14

However, national accounts seem rather unsuitable for cities since cities differ significantly from

countries in its spatial structure. Intensive cross-boundary exchange of energy, waste, transport and other products make the allocation of GHG emissions to cities more complex than to countries.15

However, until recent years, no international framework provided detailed guidance on how to

measure urban emissions16 and the lack of standardized methodologies have made benchmarks

among cites highly problematic.17 The need for harmonized GHG accounting has become more

prevalent18 and by the end of 2014 the first globalised standard for GHG accounting on city level will

be published. The GPC - Global Protocol of Community-Scale Greenhouse Gas Emission Inventories is developed by WRI (World Resources Institute), C40 (C40 Cities) and ICLEI (Local Governments for Sustainability) and will be outlined in Chapter 8.1 in more detail.

GHG emissions can be allocated to three categories: Export, Import and Consumption of own goods

and services: "Export" includes CO2 emissions from the products produced domestically and exported; "Import" includes CO2 emissions from the production of goods and services that are imported: "Consumption of own goods and services" include CO2 emissions from products that are domestically produced and consumed.19

Production-based accounting comprises total emissions in the category "Consumption of own goods and services" and "Export" and consumption-based accounting assesses emissions in the category "Consumption of own goods and services" and "Import". In other words, production-based emissions are emissions occurring within a geographical entity, whereas consumption-based emissions are the

embodied emissions of consumed products within a geographical entity, originated during the production of these goods and services, regardless its production site location.20 The difference is illustrated in Figure 3-1.

14 Dodman (2009, p 187) 15 Desai & Arikan (2012, p 1) 16 Dodman (2009, pp 187œ188) 17 Dodman (2009, p 188) 18 Dodman (2009, pp 187œ188) 19 Dam Mikkelsen et al. (2011, p 13) 20 Homma, Akimoto & Tomoda (n.d., p 4)

22

http:location.20http:consumed.19http:problematic.17http:countries.15

Figure 3-1: Overlap between production-based and consumption-based emissions

Source: (Erickson 2011, p 4)

A common methodology to establish consumption-based accounts is to convert production-based

emission sources elaborated by national GHG inventories to the format of the System of National Accounts (SNA). Subsequently production-based emissions are translated to consumption-based emissions by applying input-output analysis (OIA).21

In a closed economy, production-based and consumption-based emissions would be equal. However, since our economy is globalized, there are large quantities of carbon embedded in international trade.22 The more GHG emissions are downscaled to smaller geographical entities, for instance from global to city level, the variation between production- and consumption

Particularly in cities where there is little or no industrial and agricultural production, production-based and consumption-based emissions differ significantly and show a very small overlap in the category "Consumption of own goods and services". Citizen's export-based CO2 emissions are typically very low while their import-based CO2 emissions can be very high due to the high level of income and their

need for food, electronics, cars, air travel and so on.23 Figure 3-2 illustrates the typical allocation of import, export and "overlap", which is the consumption of their own goods and services, at different geographical scales.

21 Peters (2008, p 14) 22 Dam Mikkelsen et al. (2011, p 14) 23 Dam Mikkelsen et al. (2011, p 14)

23

http:trade.22

Figure 3-2: Production-based and consumption-based accounting at different geographical

scales

Source: (Rasmussen 2014a)

In a city consumption-based GHG emissions include emissions embodied in energy deployed to

produce concrete, steel, glass and other materials required for urban infrastructure, methane and nitrous oxide emitted during food production or emissions occurring in rural power plants to provide heat and electricity consumption in the city.24 In most European cities without significant industry or agriculture production-based emissions mainly comprise emissions related to traffic and electricity and heat consumption.

Process-based accounting is more common than consumption-based accounting and used by most entities today. Moreover, it is easier to implement than consumption-based accounts and presents GHG emissions that are within the most influential field of politicians.25 However, production-based

accounting does not present any data to act on embedded GHG emissions in consumption and subsequently represents a threat for carbon leakage.26 Carbon leakage occurs when CO2 emission increase outside the countries conducting domestic mitigation, while their own emissions are reduced. For instance higher domestic energy prices due to climate policy may result in the movement of production to countries with less or no mitigation obligations.27

On the other hand consumption-based accounting is subject to several weaknesses. One major drawback is the complexity of consumption-based GHG calculations. The complex methodology requires more assumptions and hence increases uncertainty. Consumption based carbon accounting

would elevate mitigation options, but also require the extension of climate governance outside the political region.28

24 OECD (2010, p 50) 25 Bahnsen & Szeler (2014) 26 Peters (2008, p 13) 27 IPCC (2007) 28 Peters (2008, p 14)

24

http:region.28http:obligations.27http:leakage.26http:politicians.25

3.1.5 Carbon Footprint in cities

Carbon footprint is typically associated with the climate impact of corporate entities, households,

individuals or communities. The Oxford Dictionary defines carbon footprint as follows

"The amount of carbon dioxide released into the atmosphere as a result of the activities of a particular individual, organization, or community."29

(Note: It has to be defined in advance what gases are included in the specific carbon footprint since often other greenhouse gases are assessed as well.)

Since the carbon footprint covers all emissions caused by an entity, it comprises direct and indirect emissions. Direct emissions are emissions that are directly owned or controlled by the entity and indirect emissions occur due to the entities activities but take place at sources owned or controlled by other entities. 30 Commonly, the categories scope 1, scope 2 and scope 3 are used to classify emissions. Within this framework direct emissions are allocated to scope 1 and indirect emissions to

scope 2, scope 3.

The GHG Protocol Initiative delivers the Greenhouse Gas Protocol (GHG Protocol), an international recognized accounting tool, sets standards on how to assess GHG emissions for organizations and corporate entities and recently also for cities (see Chapter 8.1). They outline direct and indirect

emissions with the scope 1, 2, 3 approach. Table 1 shows their definition of scopes for cites.

Scope Definition

Scope 1 All GHG emissions from sources located within the boundary of the city

Scope 2 All GHG emissions occurring as a consequence of the use of grid-supplied electricity, heating and/or cooling within the city boundary

Scope 3 All other GHG emissions that occur outside the city boundary as a result of activities within the city‘s boundary

Table 1: Scopes of emissions

Source: (GHG Protocol 2014, p 17)

It has to be noted that a full carbon footprint on city or community level is similar to the consumption-based GHG emissions. Following the definition of scope 1 "All GHG emissions from sources located within the boundary of the city"31 intuitively GHG emissions embodied in export are included as well. In

that case a full climate footprint would be more comprehensive than consumption based. However, it depends on the individual accounting tool how consumption-based emissions are distinct from a full

carbon footprint. The GPC for instance states that grid supplied energy produced within the city, but consumption outside the city should be reported to ensure completeness and transparency but do not contribute to the inventory emissions.32

29 Oxford Dictionaries (n.d.a) 30 ISO (2014) 31 GHG Protocol (2014, p 17) 32 GHG Protocol (2014, p 22)

25

http:emissions.32

3.2 Carbon neutrality

3.2.1 Definition of carbon neutrality

3.2.2 Offset

In most cases carbon neutrality does not mean the full elimination of GHG emissions, but uses offset or compensation (as in the case of Copenhagen) to reach net carbon neutrality. Therefore this chapter explains the connotation of carbon neutrality and the meaning of carbon neutrality within Copenhagen's climate target.

Carbon neutrality is an absolute term and therefore stronger than "climate friendly "or "low carbon". The Oxford Dictionary defines the adjective "carbon neutral" as the

—Making or resulting in no net release of carbon dioxide into the atmosphere, especially as a

result of carbon offsetting“33 .

The WWF (n.d.) describes the path to carbon neutrality in five steps, which can be derived from Figure 3-3.

1. Assessment of current emissions 2. Identification of emissions that can be avoided 3. Improvement of energy efficiency 4. Offset of unavoidable emissions 5. Annual review to enhance step 2-3

Figure 3-3: Five steps to reach carbon neutrality

Source: (WWF n.d.)

According to WWF the final target is to reach carbon neutrality without offset over time.34 Although the WWF addresses mainly companies with this approach it is assumed that this concept can be applied to cities as well. The principle of Avoid-Reduce-Offset can not only be retrieved from WWF's five steps

but also in other sources such as Greenfleet (n.d.)35 or the Forum for the Future (n.d.)36 .

A central tool to become carbon neutral is to offset remaining emissions. Lovell (2010) explains carbon offset as follows:

"A carbon offset allows emission reduction targets to be met in one location by purchasing emission reductions from a climate mitigation project based elsewhere (and so relies on the uniform global mixing of greenhouse gases in the atmosphere"37

33 Oxford Dictionaries (n.d.b) 34 WWF (n.d.) 35 Greenfleet - Greenfleet Australia (n.d.) 36 Clean Air Cool Planet & Forum for the Future (2008) 37 Lovell (2010, p 353)

26

3.2.3 Carbon neutrality within the Copenhagen's Climate target

Mitigation projects include initiatives that reduce carbon emissions such as investments in renewable energy and energy efficiency or sequester carbon from the atmosphere by creating sinks such as planting trees.38

The City of Copenhagen aims to be carbon neutral by 2025. As stated in the definition above the aim of carbon neutrality is not to eliminate all carbon emissions, but to achieve a net zero in carbon emissions. In the case of Copenhagen, this means that the city does not intend to eliminate all carbon

sources within their geographical boundaries by 2025 but to compensate their remaining emissions with renewable electricity production inside and outside the city. By replacing fossil fuel generated electricity in Denmark with their own clean electricity production, Copenhagen lowers Danish emissions and consequentially reaches zero net emissions in Copenhagen. (For Copenhagen's precise path to carbon neutrality see Chapter 10.1.2.1)

By applying this approach Copenhagen deviates slightly from the concept of offsetting. Copenhagen's main focus is to subtract its own electricity production from its electricity consumption and multiplies it with a corrected Danish emission factor for electricity consumption (see Equation 3). On the contrary, offsetting requires the determination of the amount of emissions that are to be offset and the financing

of projects that eliminate the same amount of carbon in other locations. Moreover, offsetting projects are typically carried out internationally, whereas Copenhagen limits itself to compensate its emissions within Denmark. Copenhagen refuses to characterize its method as offset. Abildgaard (2014) argues that Copenhagen owns its renewable electricity production and thus the method shall be called compensation.39 Therefore, in this study the act of reaching zero net emissions by establishing

renewable electricity production will be defined as compensation. However, further analyses would be required to define the precise distinction between offset and Copenhagen's approach.

Furthermore, it has to be noted that Copenhagen uses a production based accounting system.

Therefore the aim of net carbon neutrality only applies to emissions within its geographical boundaries and ignores emissions embedded in the consumption of goods. This implies that a citizen in Copenhagen lives in a net carbon neutral city but by no means lives a carbon neutral life. Furthermore, GHG emissions embodied in energy is deployed to produce infrastructure that is required to reach carbon neutrality, for instance wind turbines, is not taken into account either.

38 The Global Carbon Project (2008, p 6) 39 Abildgaard (2014)

27

http:compensation.39http:trees.38

II - FRAMEWORK CONDITIONS FOR COPENHAGEN

AND VIENNA

28

4 Overview of climate targets on different levels

Copenhagen's and Vienna's future energy and climate developments are closely linked with

international, European and national energy and climate decisions. Table 2 summarizes all relevant climate and energy targets for the different geographical levels, while the following sub-chapters provide the necessary background information.

2008-2012 2020 2030 2040 2050

GHG40

GHG RE GHG

b.yr 1990 RE GHG

b.yr 1990 GHG

b.yr 1990 RE

b.yr 1990 b.yr 2005 (1990)

EU-total -8% -14% (-20%)41 20%42 -40%43 27%44 -60%45 -80%46

EU ETS (b.yr.2005)

Non EU-ETS

(b.yr.2005)

RE total

Trans-port

EU ETS (b.yr. 2005)

Non EU ETS

(b.yr 2005) RE RE

EU -8% -21%47 -10%48 20%49 10%50 -43%51 -30%52

AUT -13% - -16%53 34%54

DK -21% - -20%55 30%56 100% heat

and electricity57 100%

58

2015 2020 2025 2030 2040 2050

GHG GHG GHG GHG GHG GHG

CPH -20% b.yr 200559 -100%60 (net target)

VIE -21% per capita61

non-EU ETS b.yr 1999 -35% per capita62

non-EU ETS b.yr 1999 -80% per capita63

non-EU ETS b.yr1999

Table 2: Greenhouse gas emission reduction and renewable energy targets EU, Denmark,

Austria, Copenhagen and Vienna 2008-2050

Source: Own draft

40 European Commission (2014f) 41 European Commission (2014d) 42 European Commission (2014d) 43 European Commission (2014a) 44 European Commission (2014a) 45 European Commission (2014c) 46 European Commission (2014c) 47 European Commission (2014d) 48 European Commission (2014e) 49 European Commission (2014d) 50 European Commission (2014d) 51 European Commission (2014a) 52 European Commission (2014a) 53 European Commission (2014e) 54 Federal Ministry for Science Research and Economy (n.d.) 55 European Commission (2014e) 56 Danish Ministry of Climate, Energy and Buildings (2011, p 5) 57 Danish Ministry of Climate, Energy and Buildings (2011, p 5) 58 Danish Ministry of Climate, Energy and Buildings (2011, p 5) 59 The City of Copenhagen (2012, p 8) 60 The City of Copenhagen (2012) 61 Vienna City Administration (2009, p 6) 62 MD 18 Vienna City Administration et al. (2014, p 44) 63 MD 18 Vienna City Administration et al. (2014, p 43)

29

5 International, European and national frameworks

5.1 Global cl imate targets

At the COP 16 of the UNFCCC in Cancun, Mexico 2010, the nations agreed to a maximum temperature rise of 2 degrees Celsius above pre-industrial levels.64 At the moment the Kyoto Protocol is the main international document that contains specific GHG reduction targets. The Kyoto Protocol committed Annex I countries to reduce their GHG emissions on average by 5% during the commitment period of 2008-2012 compared to 1990 levels - for the EU this implied a reduction target of 8% on

average. 65 In Doha 2012, the parties to Kyoto Protocol adopted the amendment of the Kyoto Protocol which regulates the time period from 2013 to 2020. During this time the parties have agreed to reduce emissions by 18% compared to 1990 levels.66 Under the UNFCCC, the next comprehensive global climate protection agreement is arranged to be established in 2015 and to come into effect by 2020.67

5.2 EU climate targets

2008-2012 Kyoto

Under the Kyoto Protocol, the EU had to fulfill a reduction target of 8% compared to 1990 levels during the first Kyoto commitment period from 2008 to 2012. Due to its burden sharing agreement, the EU

divides the efforts among the member states and sets individual targets for each state. For instance Denmark was obliged to reduce 21% and Austria 13% during the same period and according to 1990 base level.68

2020

In 2009 the EU adopted binding legislations covered under the Climate and Energy Package to meet its targets by 2020. The goals are called "20-20-20" targets which comprise three key objectives69:

• 20% GHG emissions reductions compared to 1990 levels

• 20% of renewable energy consumption

• 20% improvement in the EU's energy efficiency

To achieve an overall emission reduction of 20%, the EU set individual targets for the EU ETS sector and the non-EU ETS sector. The non-EU ETS sector includes sectors such as Housing, Agriculture, Waste and Transport (excluding Aviation) and by 2020 the EU aims to reduce 10% in the non-EU ETS sector based on 2005 level. This target is allocated to the EU Member States under the Effort Sharing

64 UNFCCC (n.d.c) 65 UNFCCC (n.d.b) 66 UNFCCC (n.d.a) 67 UNFCCC (n.d.d) 68 European Commission (2014f) 69 European Commission (2014d)

30

http:level.68http:levels.66http:levels.64

Decision. Denmark, for instance, is committed to reduce 21% and Austria 16% by 2020 compared to 2005 level.70

Within the Climate and Energy Package the EU ETS was revised and the new Emission Trading Directive was applied from 2013 starting the third EU ETS period. The national caps were replaced by one single EU-wide cap of emission allowances, which will be reduced each year in order to reach an emission cut of 21% by 2020 based on 2005 level. Additional changes include the replacement of free

allocation of allowances by auctioning and the inclusion of more gases and sectors. 71

Subsequently member states are committed to raise their share of renewable energy in their energy consumption. By 2020 the EU aims to consume 20% renewable energy with a share of 10% in the

transport sector. The binding national targets are set in the Renewable Energy Directive. Denmark for instance is committed to reach 30% and Austria 34%.The energy targets aims to reduce greenhouse gas emissions as well as to minor the dependency on energy imports. 72

The energy efficiency target of reducing 20% of the primary energy consumption is not directly faced

by the Climate and Energy Package, but later addressed by the Energy Efficiency Plan in 2011 and the Energy Efficiency Directive agreed in 2012. The Directive obliges member states to take binding measures and to submit national indicative targets. 73

2030

Furthermore, in October 2014 the European Council approved the 2030 framework for climate and energy containing a reduction target of 40% below the 1990 level by 2030. To comply with this target the entities under the EU ETS have to cut their emissions by 43% compared to 2005 and the Member States have to share their effort for achieving a 30% reduction below the 2005 level. Furthermore, the

share of renewable energy has to reach a share of 27% of EU's energy consumption. However, Member States remain flexible in their own energy mix as no specific renewable energy target would be translated into national law. Last but not least, energy efficiency has to be enhanced further. The preliminary target is to reach energy savings of 27% which will be reviewed in 2020.74

2050

The EU's long term perspective is to reduce 80% of GHG emissions below 1990 levels by 2050. This vision is accompanied by a reduction goal of 60% by 2040.

70 European Commission (2014d) 71 European Commission (2014d) 72 European Commission (2014d) 73 European Commission (2014d) 74 European Commission (2013)

31

http:level.70

Figure 5-1: EU 2050 climate roadmap

Source: (European Commission 2014c)

Table 3: EU sector specific targets for 2030 and 2050

Source: (European Commission 2014b)

Early emission cuts could be achieved in the Power sector by replacing fossil fuels renewable energy, as well as nuclear power and carbon capture and storage. The sectors Residential and Services and Industry would follow a gradual reduction path by cleaner technologies, passive house standards and retrofitting. The Transport sector and the Non-CO2 Agriculture will be characterized by a very slow reduction path.75

75 European Commission (2014c)

32

5.3.2 GHG emissions trends and projection Denmark and Austria

5.3 National Frameworks - Denmark and Austria

National laws and conditions have a strong influence on cities' GHG reduction performances. To understand the Copenhagen's and Vienna's basic framework conditions, this chapter provides a short overview about Denmark's and Austria's GHG emissions, its past trends and future developments. Since one of the core sources for Denmark's and Austria's GHG emissions is their energy system, this chapter is amended with an introduction to their energy landscapes. Last but not least a short

summary is provided comparing Austria's and Denmark's GHG emissions and energy landscapes.

5.3.1 Country Profiles Denmark and Austria

Denmark Danish: Danmark

Austria German: Österreich

Capital Copenhagen Capital Vienna

European member state Yes European member state Yes

Danish population

(2013)

5,602,62876 Austrian population (2013)

8,499,75977

Danish GDP

(2013 - current price)

[mio ⁄]/[mio DKK]

254,054/ 1,891,01878

Austrian GDP

(2013 - current prices)

[mio ⁄]

322,59579

Danish GDP per capita

(2013) [⁄]

45,34680 Austrian GDP per capita (2013) [⁄]

37,95381

Table 4: Country Profiles

Source: Own draft

Both countries are rather small countries within the EU. Denmark's population is smaller than Austria's, amounting to approximately 2/3 of Austria's population. In GDP per capita Denmark is slightly wealthier than Austria with approximately 45,000⁄ per capita compared to Austria with 38,000⁄ per capita.

This chapter provides a brief overview about Denmark's and Austria's past emissions trends, their performance concerning the Kyoto target and their projections towards 2020. The projections reflect the expected progress (based on data and information submitted in 2011) towards the 2020 targets under the two assumption that only existing measures are implemented ("with existing measures") and

that additional planned measures are implemented ("with additional measures").82

76 Statistics Denmark (n.d.b) 77 Statistics Austria (2014a) 78 Statistics Denmark (n.d.a) 79 Statistics Austria (2014b) 80 Own calculation 81 Own calculation 82 European Environment Agency (2011e, p 15)

33

http:measures").82

5.3.2.1 Denmark - GHG emissions trends and projections

The trends and projections are illustrated in total and by sectors. Note the difference between the energy supply sector and the energy use sector. The energy supply sector covers mainly public electricity and heat production by energy industries and large amounts of its emissions fall under the

EU ETS. The energy use sector consists mostly of fuels used directly in industry and construction, residential, commercial and agriculture, therefore excluding emission occurring in transport and energy supply sector.83

Figure 5-2: Denmark - GHG trends and projections 1990-2020 - total emissions

Source: (European Environment Agency 2011d, p 2)

In general emissions are decreasing since the mid 1990s. Under the burden sharing agreement

Denmark was committed to reduce 21% of its GHG emissions during 2008œ2012 compared to 1990. According to past trends and projections emissions during the Kyoto period were significantly below 1990 levels but slightly above the Kyoto targets. In both scenarios "with existing measures" and "with additional measures" emissions are expected to continue to fall.

83 European Environment Agency (2013, p 97)

34

http:sector.83

5.3.2.2 Austria GHG emissions trend and projections

Note: GHG emission projections are represented either through dash lines (with existing measures) or dotted lines (additional measures)

Figure 5-3: Denmark - GHG trends and projections 1990-2020 - emissions by sector

Source: (European Environment Agency 2011d, p 2) (Primary data source: National GHG inventory report, 2012; National proxy estimate of 2011 GHG emission; National GHG projection data submitted in 2011. [No reference list was provided])

The sectoral presentation of Denmark's emissions reveals Energy supply is by far the most emitting

sectors over the past 20 years. (Its large fluctuation is due to the electricity trade within the Nordic energy market.84) In 2010 this sector covered approximately 40% of Denmark's emissions.85 At the same time it is the sector that has been falling the most since 1996 and which is expected to continue to fall up to 2020 (except after 2015 "with existing measures"). Emission levels in other sectors remain rather stable over the time from 1990 to 2020. In 2010 the sectors transport, energy use and

agriculture covered 22%, 18%, and 16% of Denmark's total emissions.86

Figure 5-4: GHG trends and projections in Austria 1990-2020 - total emissions

Source: (European Environment Agency 2011b, p 2)

84 European Environment Agency (2011d, p 2) 85 European Environment Agency (2011c, p 1) 86 European Environment Agency (2011c, p 1)

35

http:emissions.86http:emissions.85http:market.84

Austria's emissions have increased from 1990 to 2005, peaking in 2005 and are generally decreasing since then, at least when assuming the scenario "with additional measures". Under the burden sharing agreement Austria was committed to reduce 13% of its greenhouse gas emissions during the period

2008-2012 compared to 1990. However, between 2008 and 2011 Austria's average emissions were 5.4% above the base-year level and thus also by far higher than the burden sharing target. In particular the sectors not covered by the EU ETS show significantly higher emissions th