Murat Armbruster Director, Green Capital Global Challenge Senior Advisor, Carbon War Room October 14, 2011

1. Carbon War Room Presentation at
51stUCEU GA Conference, Vilnius 2011
Financing Change: Green Initiatives and Technologies Implemented in Cities
Murat Armbruster
Director, GreenCapital Global Challenge
Senior Advisor, Carbon War Room
October 14, 2011

2. Intro to the Carbon War Room
Entrepreneurial Independent Non-Profit
Gigaton-Scale,
Market-Based,
Solutions To Climate Change
2

3. Our Focus on Climate Wealth
Other
Innovations
Carbon
40 Capture &
Storage
Non-Energy
20 Renewable
Low- Energy
Carbon
Fuels
$/ton of CO2
0
Manufacturing
- 20
Carbon War Room chases the >50%
of the climate solution that makes
Transportation great business sense right now…
- 40
Buildings
Source: McKinsey & Co. 3

4. CWR Role – Accelerating Capital
Capital
Policy Technology
(not enough) (not the bottleneck)
The
Market
Increase information
Reduce Transaction Costs
(the common end-goal)

5. A Green Capital & Green Mayor
5

6. Mission of the Challenge
Help Standardize the Energy Efficiency Industry to Foster
Market Conditions which Promote the Wide-Scale
Deployment of Private Capital into the Urban-based Retrofit
Market
6

7. “EE Harmony” – Matching Capital & Cities
EVERY STEP IN VALUE CHAIN NEEDS TO BE SMOOTH FOR CAPITAL TO FLOW
Market
Legal Program Capital Marketing
Analysis
Design
Wide range of
Marketing and
Huge Programs can Who will financial
outreach
Variation in killed from administer the products; city
critical to
how poor program? austerity
success of any
building legislative What role measures
program yet
segments design (i.e. does the city requires 3rd
often treated as
are defined PACE) play? party capital for
after-thought
scale
7

8. Greatest Challenge: The Capital

9. 5-75% C02Reduction Potential
• 1-10%Behavior changes
– (turning lights off, using stairs instead of
elevator)
• 5-30%Technology
– (installing energy management
software, retro and continuous
commissioning, optimization)
• 10-50%Simple Retrofits
– (lighting, Energy Star appliances, insulation)
• 20-75%Deep Retrofits
– (HVAC, boilers, windows, building
envelope)

10. Global Reach : Local Action
North America Financing Retrofits Europe
• District of Columbia • 3rd Party Off-Balance Sheet • Copenhagen
• New York City • Property Tax Bill Financing •Rotterdam
• San Francisco • Utility Bill Financing • London
• Vancouver • Vendor Financed • Vilnius
• Toronto • Traditional Debt • Berlin*
Asia/ Pacific
• Beijing
• Auckland
•Wellington
•Melbourne
• Singapore*

11. The Financing Mechanisms
• Assessment-based (PACE) –
– Debt obligation transfers with ownership
– Recourse is government foreclosure on default of property taxes
– Low cost of capital due to low risk profile of investment
– Mortgage holder consent remains largest hurdle; uncertainty of lawsuits
• Meter-based (On-Bill) –
– Efficiency improvements on same bill as electricity
– Recourse is shutting off power, therefore very low projected default rate
– IOU without de-coupling in the business of selling electrons not saving
• Off-Balance Sheet (EEPPA, MESA) –
– Upfront funding securitized by installed assets
– requires no government intervention however need accounting ruling
– Difficult to scale as it is project by project
• Vendor-financed Technology Solutions –
– Require no upfront investment
– Savings pay for installation and fees
• Traditional Debt –
– Long mortgage terms provide low cost capital
– Balance sheet constraints
– Transfer of ownership issues
– Split incentive issues for commercial property

12. PACE Commercial Consortium

13. Catalyzing a Brighter Future
• €500M Deployed Capital = 20K new jobs
• = €2B Increase in Tax-base
• = €5B Increase in Economic Activity
• €2 Trillion in 10 years = EU Com Market
• Jobs,Economic Stimulus, CO2 Reduction,
Fossil Fuel Dependence Reduction
13

14. THANK YOU
Murat Armbruster
GCGC Director &CWR Senior Advisor
marmbruster@carbonwarroom.com