EIB Environmental Impact Bond, Brussels, Belgium, environmental challenges, urban area, UNFCCC United Nations Framework Convention on Climate Change, greenhouse gas, Kyoto Protocol, COP21, OECD Organization for Economic Co-operation and Development, sustainable growth, renewable energy, political agenda, green city, air quality, air pollution, health, energy consumption, Lanskink scale, transport, urban mobility, Copenhagen, Stockholm, Oslo, London, Amsterdam, Singapore, San Francisco, congestion charge, bus service
Cities face increasing environmental challenges including, but not limited to; air pollution, CO2 emissions, energy, transport and waste management. The success of Social Impact Bonds (SIB) by solving social issues in a public-private partnership has been the driver for the development of the first Environmental Impact Bond (EIB). This report will concentrate on Belgium, with a focus on finding a solution to environmental issues in Brussels.
The purpose is to conduct a feasibility study of the application of an Impact bond mechanism to environmental challenges in urban Belgium. In order to develop an EIB, the following methodology has been designed.
First, basics are described in order to frame the report and facilitate understanding of the analysis conducted in the report. Therefore, it is explained as an EIB, the necessity for an EIB implementation in Belgium and in Brussels. Moreover feasibility criteria for an EIB are mentioned.
Next, the political agenda on environmental issues has to be analyzed on a world-, EU-and national-level, which is important as the government is a key stakeholder in the EIB contract.
Third, it is essential to identify the main environmental challenges in urban Belgium where intervention today would significantly limit the economic/environmental costs in the future.
Furthermore, best practices in other cities around the world on the main environmental challenges will be mapped and solutions applicable in the Belgian setting recommended. Finally, it will be assessed whether an impact bond mechanism can be used to finance the identified interventions.
[...] Firstly, the emissions of particulate matters are analyzed. As a first step, we have to understand what particulate matter is and next we will describe how Brussels performs in terms of particulate matter. Particulate matter, also known as particle pollution or PM, is a complex mixture of extremely small particles and liquid droplets. Particle pollution is made up of a number of components, including acids (such as nitrates and sulfates), organic chemicals, metals, and soil or dust particles. PM is generally divided into two categories: the fine particulate matters, or PM2.5, which have a diameter smaller than 2.5 micrometers. [...]
[...] In the following section, we will describe the environmental challenges and the main source for GHG emissions. Environmental Challenges According to the political agenda, Brussels has to act on GHG emissions. In order to find the environmental challenge with the largest impact for an EIB in Brussels on GHG emissions, we will select the major environmental challenges based on the European Green City Index. Afterwards, the selected challenges will be analyzed to understand why they are an issue in Brussels, what the benchmark cities are doing, what Brussels is actually doing to tackle the issues and who takes responsibility for solving the challenges. [...]
[...] Socio-economics benefits of the congestion charge are: Regarding the public transport: the revenue from the toll is used to improve the public transport services (new services and increased efficiency/capacity), regarding road traffic: reduce of congestion on road networks and reduction in car traffic, reduction in accident costs due to a reduction of cars on the road, a reduction in environmental and health costs with less pollution and GHG emissions, and reduced noise. In the Table 37 below, the applicability of an EIB structure for the congestion charge solution is described. Table 37: Criteria for an EIB Solution # Measurable and meaningful outcomes 2. Reasonable time-horizon to achieve outcomes 3. [...]
[...] It depends among others on the energy source of the car (fossil fuel, electricity, hybrid) used, the insurance costs, employer-sponsoring and depreciation of the car. Every 10 to 15 minutes In case the road is served, public transport buses come frequently (comparable to Chariot). For instance, bus no.71 passes on average every 7 minutes during commuter hours. The private car user is independent and can freely decide when to leave. Faster and comfortable. As the passenger ideally does not have to change means of transport. [...]
[...] The tax payments invested before the intervention into the public transport development can now (after the intervention) be used to finance different environmental or social actions. Fourth, the analysis of the political agenda on a world, EU and Belgian level proofs that government is incentivized to take part in the EIB contract as GHG emissions have to be reduced and air quality improved. Besides, the government of Brussels has recognized traffic congestion as a main priority. The city wants to reduce the number of km driven by cars by 2018 by 20% (baseline 2001)[42]. [...]
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