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Methodological Guide Emerging and Sustainable Cities Initiative Second edition July 2014

Methodological Guide Emerging and Sustainable Cities Initiative Second edition

July 2014

Inter-American Development Bank

© Inter-American Development Bank, second edition, 2014. All rights reserved. This document was prepared by the Emerging and Sustainable Cities Initiative (ESCI) under the coordination of Carolina Barco (Senior Advisor), with the assistance of the Office of the Coordinator General. The document benefited from the contributions of: Ellis J. Juan, Horacio Terraza, Huáscar Eguino, Marcia Silva, Ramón Zamora, Luis Manuel Espinoza, Ricardo de Vecchi, María Isabel Beltrán, David Maleki, Rebecca Sabo, Sebastián Lew, Federico Scodelaro and Martin Soulier. Nancy Moreno was responsible for the general editing of the document. Coordinating Team of the Emerging and Sustainable Cities Initiative (ESCI) General Coordination: Ellis J. Juan Sectoral Coordinators: Horacio Cristian Terraza (INE) and Huáscar Eguino (IFD) Senior Advisor: Carolina Barco Country Team Leaders Omar Garzonio (Argentina) Arturo Alarcón (Bolivia) Marcia Silva (Brazil) Veronica Adler (Chile and Uruguay) Ramiro López-Ghio (Colombia) Beatriz López (Costa Rica) Javier Grau and Alejandro Gomez (Dominican Republic) Fernando Orduz (Ecuador) Juan Pablo Ortiz Meyer (El Salvador) José Larios (Guatemala y Peru) Juan Poveda (Honduras) María Eugenia de La Pena (Mexico) Roberto Camblor (Paraguay) Javier Grau and Alejandro Gómez (Santo Domingo) Gilberto Chona (Trinidad and Tobago, Barbados) Operations María Isabel Beltrán Ricardo De Vecchi Federico A. Scodelaro Rebecca T. Sabo Ivelisse Justiniano Sebastián Lew

Patricio Zambrano Diego Arcia Avelina Ruiz Brenda Stefan David Maleki (Climate change) Roland Krebs (Urban expert) Lea Rufenacht (Urban expert) Harvey Scorcia (Mobility) Martin Soulier (Argentina) Oswaldo Porras (Colombia) Marcelo Facchina (Brazil) Renata Seabra (Brazil) Isabel Carreras (Mexico) Dissemination and knowledge Luis Manuel Espinoza Andreina Seijas Z’leste Wanner Ramón Zamora María Camila Ariza Administration Luis López Torres María Zamorano Carla del Águila

Contents

Acronyms and Abbreviations........................................................................................ vii How to Use this Guide................................................................................................... ix

1.

Introduction.......................................................................................................... 1 A. Background and Context............................................................................................... 1 B. Approach ....................................................................................................................... 2

2.

General Vision: Process, Stages and Phases.......................................................... 13 A. First stage: Development of Action Plan..................................................................... 14 B. Second stage: Execution..............................................................................................23

3. Phase 0 – Preparation: Collection of Basic Information and Identification of Stakeholders ............................................................................................ 27 A. Organizing the implementation of the ESCI methodology.........................................29

4.

Phase 1 – Analysis and Diagnosis: Identification of Problems................................ 37 A. Preliminary diagnosis ................................................................................................. 37 B. Identification of the challenges of sustainability: Indicators and traffic lights.........38 C. Three baseline studies: Greenhouse gases, risk and urban footprint....................... 40 D. Additional baseline studies ....................................................................................... 48

5.

Phase 2 – Prioritization: Selection of the Topics the City Should Target................. 55 A. The filters.....................................................................................................................57 B. Prioritization process..................................................................................................76

6.

Phase 3 – Action Plan.......................................................................................... 81 A. What is an Action Plan?............................................................................................... 81 B. Why have an Action Plan for sustainability?...............................................................87 C. What is the content of an ESCI Action Plan for sustainability? ................................ 88 D. How is an ESCI Action Plan for sustainability structured?....................................... 88 E. Prioritized interventions: Where do we start?........................................................... 90

iii

Methodological Guide Emerging and Sustainable Cities Initiative

F.

Guidelines for preparing the financial plan................................................................93

G. Programming for implementation...............................................................................95 H. Citizen Monitoring System and the Action Plan........................................................ 98 I.

7.

How do we link up with the Bank?........................................................................... 100

Phase 4 – Pre-investment.................................................................................. 105 A. Pre-investment studies..............................................................................................105 B. Institutional and regulatory framework ...................................................................106 C. Financial structuring of the project..........................................................................108 D. Project execution timetable...................................................................................... 116

8.

Phase 5 – Citizen Monitoring System...................................................................121 A. ESCI Monitoring System............................................................................................ 121 B. Functioning and start-up of the system.................................................................... 123

9.

Cities Network....................................................................................................131 A. Cities Network .......................................................................................................... 131 B. Communication platform to support the dissemination and exchange of knowledge products.............................................................................................. 133 C. Urban dashboard....................................................................................................... 137

10. Conclusions....................................................................................................... 145 ANNEX 1: ESCI Indicators Annex 1: ESCI Indicators ANNEX 2: Climate Change and Disaster Risk Filter Annex 2: Climate Change and Disaster Risk Filter ANNEX 3: Economic Filter Annex 3: Economic Filter ANNEX 4: Terms of Reference of Baseline Studies Annex 4: Terms of Reference of Baseline Studies ANNEX 5: Terms of Reference of Additional Baseline Studies Annex 5: Terms of Reference of Additional Baseline Studies

iv

Contents

ANNEX 6: Terms of Reference of the Public Opinion Survey Annex 6: Terms of Reference of the Public Opinion Survey ANNEX 7: Incorporation of the Topic of Cities and Sustainability into Country Strategies Annex 7: Incorporation of the Topic of Cities and Sustainability into Country Strategies Electronic Links 1.

Methodological guide, digital version http://www.iadb.org/es/topics/cities-emergings-and-sustainable/implementation-of theenfoque-of-the-initiative-cities-emergings-and-sustainable,7641.html?#metodologia

2.

Urban dashboard http://www.urbandashboard.org

3.

ESCI communication platform http://www.iadb.org/cities

4.

Ciudades Cómo Vamos network http://redcomovamos.org

5.

Citizen monitoring system “Cómo vamos La Paz” www.comovamoslapaz.com

v

Acronyms and Abbreviations

ABS

additional baseline studies

Banobras

Banco Nacional de Obras y Servicios Públicos SNC

BOO

build–own–operate

BOOT

build–own–operate–transfer

BOT

build–operate–transfer

BRT

Bus Rapid Transit

C40

C40 Cities Climate Leadership Group

Caixa

Caixa Econômica Federal

CIOC

Integrated Control and Operations Center

DBOM

design–build–operate–maintain

ESCI

Emerging and Sustainable Cities Initiative

Findeter

Financiera de Desarrollo Territorial

FMM

Division of Fiscal and Municipal Management

GDP

gross domestic product

GHG

greenhouse gases

GPC

Global Protocol for Community-Scale Greenhouse Gas Emissions

HDI

Human Development Index

ICF

International Community Foundation

ICLEI

Local Governments for Sustainability

ICT

information and communication technologies

vii


viii

IFD

Institutions for Development office

IGC

Initiative group coordinator

Implan

Municipal Planning Institute

INE

Infrastructure and Environment office

KRIHS

Korean Research Institute for Human Settlements

KSP

knowledge-sharing program

LAC

Latin America and the Caribbean

MDC

central district municipality

NDF

Nordic Development Fund

NGO

non-governmental organization

O&M

operation and maintenance

PPA

public–private association

SEMAPA

Servicio Municipal de Agua Potable y Alcantarillado

SIMOP

Public Works Simulation Model

UABCS

Autonomous University of Baja California Sur

UNDP

UN Development Program

UNEP

UN Environment Program

UN-Habitat

UN Human Settlements Program

VPC

Vice Presidency for Countries

VPS

Vice Presidency for Sectors

WRI

World Resources Institute

YPF

Yacimientos Petrolíferos Fiscales

How to Use this Guide

It is a fact that the cities of Latin America and the Caribbean (LAC) are witnessing a process of accelerated urbanization, which is creating important challenges for the sustainable urban development of the region. These challenges are unrelenting and require an integrated treatment to meet the needs of the present without compromising the welfare of future generations. For this reason, in 2010, the Emerging and Sustainable Cities Initiative (ESCI) appeared as an institutional proposal of the Inter-American Development Bank (IDB), with the aim of supporting, through a multi-sectoral vision, the emerging cities of LAC in their efforts to improve the quality of life of their citizens. The immediate objective of the proposal is to contribute to the environmental, urban and fiscal sustainability of the cities of the region and to their governability. With a view to achieving the objectives proposed, and with the support of McKinsey, a consulting firm, the ESCI in 2010 and 2011 developed a methodology of rapid application and diagnosis, which helps cities prepare their action plans by identifying strategic interventions that contribute to achieving sustainability targets in the short, medium and long term. One of the results of this stage was the launch of the first edition of the ESCI Methodological Guide in June of 2012. Simultaneously, with the objective of testing the methodological instrument designed, the Bank implemented an initial application in five pilot cities. Since then, the ESCI has been moving toward achieving the proposed target: Applying the methodology in 50 emerging cities of the region during the 2012–15 period. The lessons learned with the 40 cities that to date have joined the Initiative have enriched the experience of applying the methodological instrument, including by identifying opportunities for its improvement and deepening. It is with this experience gained that the Initiative now launches its second edition of the Methodological Guide, with the aims of giving more effective support to the cities applying the methodology and of expanding the concepts associated with the process.

ix


With a view to converting the ESCI methodology into a regional public good, this second edition of the Methodological Guide has been designed for use by: officials of city governments, municipalities and public entities at different levels; officers of local state and national development institutions; local academic institutes; non-profit civil organizations; IDB specialists; and in general, any other type of institution linked to the sustainable development of LAC cities. The guide describes the step-by-step application of the ESCI methodology, implemented through a series of phases, from the formation of teams and basic data collection to the planning of implementation strategies and the start-up of the sustainability monitoring system. Each chapter includes activities, results and examples, along with definitions and useful advice. Achieving the expected results using the methodological instrument, and the effectiveness of its contribution to meeting the objectives proposed, depend on its disciplined and systematic application. In this respect, the cities of the region can count on the support of the group of specialists who are part of the Initiative at the IDB. The updated version of the guide is available at: http://www.iadb.org/es/temas/ciudades-emergentes-y-sostenibles/implementacion-del-enfoque-de-la-iniciativa-ciudades-emergentes-ysostenibles,7641.html?#metodologia

x

Introduction

1

A.

Background and context

1.1

Urbanization is taking place at a rapid rate in LAC. Proof of this is that LAC is now the second most urbanized region of the planet, growing from an urbanization rate of 41% in 1950 to one of 79% in 2010.1 If this trend continues, in 20 years, 90% of the population of Latin America will be living in cities.

1.2

However, the characteristics of urban development in LAC have varied in recent decades. In the past, growth was more marked in the large cities, which expanded at a faster rate than other areas of the various countries; now, however, a new phenomenon has emerged. Although the large Latin American metropolises still have an important specific weight in the region, these mega-cities (for example, Buenos Aires, Mexico City, São Paulo, among others) no longer have the highest growth rates. Instead, intermediate cities now head regional urban population growth. This new pattern of urbanization is creating enormous challenges for the emerging cities of LAC.

1.3

Although the rapid urban growth in intermediate cities has created opportunities for millions of people, it also generates massive challenges for regional governments, which need to expand their provision of basic services, guarantee a better quality of life, promote employment generation, protect the environment and deal with the challenges of climate change. Moreover, LAC’s intermediate cities are still characterized by high rates of poverty, and their governments must, in general, strengthen their institutional and operational capacity—a more urgent demand in view of the permanent shortage of resources for investment and the consequent need for efficient fiscal management.

1

United Nations (2012), World Urbanization Prospects, the 2011 Revision. New York: United Nations. Available at: http:// www.un.org/en/development/desa/publications/world-urbanization-prospects-the-2011-revision.html.

1


1.4

Moreover, in the last two decades, political decentralization at the municipal level has

Introduction

intensified considerably in LAC. A consequence of this has been that local governments have assumed ever more responsibilities with respect to the provision of public and social services. However, fiscal decentralization in these cities has not followed at the same rate: Most municipalities in the region are still not fiscally independent and report deficiencies in their fiscal management. Consequently, intermediate cities have very limited fiscal space, which affects their credit capacity and their ability to develop strategic projects, both public and those with the potential for private-sector participation.

1.5

To help emerging cities face these challenges, in 2010, the Bank launched the Emerging and Sustainable Cities Initiative (ESCI). With this Initiative, the IDB is promoting, through a multi-sectoral vision, sustainable growth in these cities, working to prevent their challenges from becoming limiting factors in their development. The Initiative includes helping cities manage their vulnerability to natural disasters and adapt to and mitigate climate change—priorities that do not usually appear in local agendas.

1.6

As an instrument for providing this support, between 2010 and 2011, the Initiative designed a methodology for rapid application and diagnosis, which guides cities in preparing and implementing action plans for their sustainability. Consequently, in June of 2012, the first edition of the ESCI Methodological Guide was launched. Since that time, this instrument has been tested in 40 cities and 15 action plans have been prepared. The lessons learned from its application have improved, deepened and enriched the methodological process. This second edition of the guide gathers together the experiences, adaptations, improvements and expansions achieved during the last few years.

B. Approach 1.7

The ESCI is a technical assistance program for the governments of intermediate cities in LAC that are experiencing tremendous and dynamic demographic and economic growth. This rapid evaluation program identifies, organizes and prioritizes short-,

2

Introduction

mental, social, fiscal and governance projects and proposals, to improve the quality of life in Latin American cities and achieve greater sustainability.

1.8

The ESCI represents a new approach to urban development in LAC, dealing with the most urgent challenges of the city. It uses an integrated and interdisciplinary perspective, which is necessary for identifying the path to long-term sustainability. Conceptually

Introduction

medium- and long-term infrastructure projects; it also defines urban-planning, environ-

it consists of three dimensions: (i) environment and climate change; (ii) urban issues; and (iii) fiscal and governance issues.

1.9

The process starts by identifying the most urgent challenges to the city’s sustainability, through a rapid evaluation based on: (i) a quantitative analysis, using approximately 120 indicators obtained mainly from secondary information; (ii) a technical and qualitative analysis, based on the deep knowledge of specialists and technicians experienced in the sectoral topics of the Initiative; and (iii) baseline studies, which include maps of vulnerability to natural disasters and the effects of climate change, studies of urban growth, and an inventory of the effect of greenhouse gases (GHG). As a supplement, based on the city’s situation, additional baseline studies are included, which can cover topics such as fiscal management, citizen security, transport (motorized and non-motorized), water and sanitation, and solid waste, among others.

1.10 In this first stage of the methodology, the analysis and evaluations provide a diagnosis of the sectors and areas that require more attention. The information obtained is sifted by instruments and prioritization criteria or filters. For this, the ESCI methodology uses comparisons of the baseline indicators with the Bank’s standards, plus four filters (public opinion, climate change and disaster risk, economics and multi-sectorality). Application of these instruments rapidly identifies strategies, areas of action and interventions, which are reflected in an Action Plan. Normally, this first stage of application of the methodology, which ends with preparation of the city’s Action Plan, is carried out in a period of 12 months, according to the particular characteristics of each case. The Action Plan includes the implementation timetables, the responsible actors, and the possible sources of financing for the strategic interventions defined in the plan.

3

Introduction


1.11 After preparing the Action Plan, the second stage of development of the methodology begins, which lasts three to four years. In this stage, the Bank supports the city in identifying funds and preparing the priority interventions. 1.12 A fundamental part of the methodology during the process of analysis, diagnosis and preparation of the Action Plan consists of incorporating the concerns and proposals of citizens and interested organizations (for example, private sector companies, academic institutions, non-profit entities and the community). In this context, and with a view to greater sustainability, a fundamental part of the Initiative is to propose the creation of an independent monitoring scheme for citizens, which follows up on the topics prioritized by the city and its citizens. 1.13 This guide provides detailed information about and examples of the phases of the methodology that the technical teams use during the process of its application.

What is a sustainable city? 1.14 It is a city that offers a good quality of life to its citizens, minimizes its impact on the environment, preserves its environmental and physical assets for future generations, and thereby promotes its competitiveness. It also has a local government with the fiscal and administrative capacity to carry out its urban functions with the active participation of citizens.

What are emerging cities? 1.15 Emerging cities are urban areas classified as intermediate in relation to the total population of each country that also have steady population and economic growth, in an environment of social stability and governability. 1.16 An analysis of population growth in LAC countries shows that intermediate cities have been growing at a faster rate than larger cities and are more dynamic. An analysis of Mexico, in which data by municipality were obtained, shows that the economic

4

WHAT IS A SUSTAINABLE CITY? CO

CO

%

OFFERS A GOOD QUALITY OF LIFE TO ITS CITIZENS MINIMIZES ITS IMPACT ON THE NATURAL ENVIRONMENT PRESERVES ITS ENVIRONMENTAL AND PHYSICAL ASSETS PROMOTES ITS COMPETITIVENESS HAS A LOCAL GOVERNMENT WITH FISCAL AND ADMINISTRATIVE CAPACITY THE CITIZENS PARTICIPATE ACTIVELY

%

$


component of the Human Development Index (HDI) of cities with the highest population

Introduction

was less dynamic than for intermediate cities. Also, it is estimated that the contribution of intermediate and emerging cities in LAC to regional gross domestic product (GDP) is 30%. This means that the greatest challenge to urban sustainability in LAC is precisely in the intermediate cities, which have the highest population and economic growth rates in relative terms.2 In particular, these urban centers face the challenge of achieving sustainable development without repeating the errors committed by the large Latin American metropolises.

1.17 There are very good reasons to focus an analysis of urban sustainability on the intermediate cities of the region. First, since many of these cities, as already mentioned, have very dynamic economic and population growth, the future of urban development in LAC depends to a large extent on what happens there. A second is that these cities are at a stage where it is still possible to exploit economies of scale, control the costs of agglomeration and thus raise global efficiency. These cities also are on a scale that facilitates the effectiveness of interventions aimed at sustainability. Finally, improvements in the sustainability of intermediate cities and their quality of life would reduce the economic and population pressures on the large metropolises and facilitate interventions aimed at overcoming the large imbalances that characterize the latter.

2

6

In absolute terms, the large cities continue to have the highest growth ratesin the region.

WHAT ARE EMERGING CITIES?

INTERMEDIATE URBAN AREAS

SUSTAINED POPULATION ROWTH

CONTINUING ECONOMIC DEVELOPMENT

IN LATIN AMERICA AND THE CARIBBEAN

THERE ARE 140 EMERGING CITIES

50 CITIES HAVE ALREADY JOINED ESCI

+ EMERGING CITIES CAN JOIN THE ESCI PROGRAM IN THE NEXT FEW YEARS

SOCIAL STABILITY AND GOVERNABILITY

Introduction


Box 1.1 How do we select intermediate cities? The case of Brazil In Brazil, the Initiative has been working with la Caixa Econômica Federal (the largest public bank in LAC) to apply the ESCI methodology in a series of cities. Brazil is a country of continental dimensions: it is the world’s seventh largest economy, with an urbanization rate of 84% and 5,570 municipalities. In a country with these characteristics, the key question is: How do we select the cities that will be part of the program? The Bank’s specialists in Brazil designed a selection mechanism to optimize the use of resources. For this it was necessary to apply a well-defined and transparent methodology that identified the cities with the highest current and future demand for services and for improvements in the quality of life. The starting point was to determine the number of intermediate cities using the ESCI criteria for Brazil—that is, cities with 100,000 to 2,000,000 inhabitants. Brazil has 263 municipalities spread across the country, with 50% concentrated in the southeast. The second step was to define the emerging cities, which are characterized as those that have experienced positive population growth (above the national average) in recent years, have reported sustained growth in per capita GDP, and have rates of institutional quality and governability that permit the Bank to work jointly with la Caixa. According to these criteria, it was clear that most of the cities were located in the southeast of the country, where living conditions are a little better than in the north. This gave continuity to the historic concentration of investments in this region. To diversify the area of investment, the ESCI and la Caixa opted to expand the variables to be considered for selecting cities in Brazil. Thirty variables were included, divided into four categories, each with the same weight (25%): category 1, socioeconomic; category 2, urban; category 3, environmental; and category 4, fiscal and governability. This process concluded with a ranking of cities, from which the 50 emerging cities with the highest scores were preselected. These, in turn, were divided by region (according to five regions), and one city per region was selected for application of the ESCI methodology with the support of la Caixa. The following box shows the distribution of the cities. (continued on the next page)

8

Box 1.1 How do we select intermediate cities? The case of Brazil

(continued)

THE SELECTION OF INTERMEDIATE CITIES

THE CASE OF BRAZIL

Introduction

Introduction

JOÂO PESSOA GOIÂNIA

VITÓRIA

FLORIANÓPOLIS INTERMEDIATE CITIES

BRAZIL

EMERGING CITIES (+50)

SELECTED CITIES THE NUMBER OF CITIES AND THEIR LOCATION ON THE MAP ARE ESTIMATES AND MAY VARY ACCORDING TO THE NEEDS OF THE PROGRAM

9

Introduction


10

Introduction

Introduction

11

2

General Vision: Process, Stages and Phases

2.1

In general, the ESCI methodology comprises six phases, which are grouped into two stages. The first stage, which includes the first four phases, consists of a rapid evaluation of the urban reality and ends with the preparation of an Action Plan for the city’s sustainability, containing specific proposals for intervening in the areas identified as critical; this stage takes approximately one year. The second stage of the methodology,

Figure 2.1 The phases for a city

Phases of a city

in the

EMERGING and SUSTAINABLE CITIES Initiative

Phases

ANALYSIS PREPARATION

& DIAGNOSIS

1

PRIORITIZATION

2

ACTION PLAN

3

!

Deliverables

Activities

Initiate data collection Form work teams Identify stakeholders

First mission

Applying filters:

City overview

Public opinion Economic cost Climate change Specialists

Complete indicators Traffic light exercise

Contracting of technical inputs

Baseline studies

List of stakeholders and initial view of strengths and problem areas

Set of indicators with traffic light analysis, comparisons with other cities and baseline studies

Critical areas for the city’s sustainability

List of prioritized areas and sectors

Formulating Action Plans for identified strategies Initial study Create detailed Action Plan Validate Action Plan High level Action Plan

PRE-INVESTMENT

MONITORING

4

5

Financing studies in prioritized sectors: Feasibility Economic Engineering Environmental Prepare vertical cooperation agreement Set of actions with basic descriptions

Design and implementation of a monitoring system Indicators for prioritized areas

INVESTMENT

Action Plan Execution Projects ready for bidding and financing

Citizen perception Topics of interest Monitoring System

CORE OF THE METHODOLOGY

PRE-INVESTMENT + MONITORING

Development of the Action Plan - 1 year

Action Plan Execution - 3 years

New public services and infrastructures

13


General Vision

which focuses on the initial execution of the Action Plan and the start-up of the citizen monitoring system, contains two phases and lasts three to four years, depending on the interventions contained in the Action Plan.

A.

First stage: Development of Action Plan

2.2

The first stage covers the phases of preparation; analysis and diagnosis; prioritization; and preparation of the Action Plan. Although this guide covers all phases in detail, a brief summary of each one is given here:

Phase 0 – Preparation 2.3

This phase consists of the following actions: (i) form the work teams of the institutions directly involved in the process of applying the methodology; (ii) collect, through secondary sources, information for the identification of indicators; (iii) identify the city’s key stakeholders that have the potential to participate in the future citizen monitoring scheme; and (iv) define the general vision of the city (an expansion of this definition is in the chapter on the Action Plan).

2.4

In addition, the main technical inputs for the prioritization exercise are contracted: climate change baseline studies3 and an impact study of urban growth.4 Also, possible consultants are selected to prepare economic impact studies and a public opinion survey, which will be needed later in the prioritization exercise.

2.5

Also in this phase, the Initiative’s relationship with the city is defined, after receiving approval from the national government. As a prerequisite for starting the work, the

3

This includes the basic technical studies and the measuring instruments needed to adopt measures related to mitigation of and adaptation to climate change.

4

This study provides the basic quantitative and qualitative information for determining past and current growth trends, which are used to generate long-term projections of urban and regional trends and the associated costs.

14


try counterparts at the local and national levels. This is done by a commitment letter in which the city expresses its interest in working with the ESCI, confirms the participation of its high-level officials, adopts a method for the easy and fluid exchange of information, and indicates national-level approval of the expression of interest. These requirements guarantee that a process is being initiated at the request of the interested parties, and that it has the interest and commitment needed for its satisfactory development.

General Vision

Initiative must have received the applications, commitment and approval for the coun-

Phase 1 – Analysis and diagnosis 2.6

This phase starts with the first meeting between the city and the Bank, through the Launch Mission and the Initiation Workshop. The following must be included in the framework of this first meeting: local officials, officials of the national or state agencies that influence the city’s development, and other local agents that are stakeholders in the process and represent various sectors (i.e., local authorities, chambers of commerce, NGOs, universities, etc.). The purpose of these meetings is to identify the city’s general problems.

2.7

Also in this phase, the data obtained from secondary sources are compared with information collected during field research and interviews, and with specific data received from the authorities.

2.8

The analysis and diagnosis to be carried out in this phase is based on the collection of the information required for estimating a set of approximately 120 indicators that cover the three ESCI dimensions: (i) climate change and environment; (ii) urban development; and (iii) fiscal and governability. Together, these three dimensions encompass 11 pillars, 23 topics and 59 subtopics, each with their defining indicators. The detailed organization of the topics, subtopics and indicators is given in “Annex 1 – ESCI Indicators.”

2.9

The indicators used in the ESCI constitute a tool for rapidly identifying the critical problem areas in the emerging cities of LAC based on objective technical criteria. They were

15

ANALYSIS AND DIAGNOSIS

COLLECTION OF INFORMATION REQUIRED TO ESTIMATE A SET OF APPROXIMATELY 120 INDICATORS COVERING THE 3 ESCI DIMENSIONS

General Vision

INDICATORS 3

23

59

120

DIMENSIONS

TOPICS

SUBTOPICS

INDICATORS

DEBT SPENDING MANAGEMENT TAXES AND FINANCIAL AUTONOMY

WATER

$

2 3 T OPIC S

% FISCAL AND GO VER N

C

TY ILI B A

3

INT

PARTICIPATORY PUBLIC MANAGEMENT

E

GR

AT

ED U

SOLID WASTE MANAGEMENT ENERGY

ND ENVIRONME NGE A NT CHA ATE LIM

TRANSPARENCY MODERN PUBLIC MANAGEMENT

SANITATION AND DRAINAGE

AIR QUALITY CLIMATE CHANGE MITIGATION

R B A N DE V EL O P M E N T

NOISE

HEALTH VULNERABILITY TO NATURAL DISASTERS

SECURITY

LAND USE AND MANAGEMENT

EDUCATION CONNECTIVITY EMPLOYMENT RESULT OF DIAGNOSIS OF THE CITY OF QUETZALTENANGO, GUATEMALA.

URBAN

MOBILITY INEQUALITY ECONOMIC AND COMPETITIVENESS TRANSPORT


eas/topics/subtopics of the Initiative, as part of the design process of the methodology. On this basis, these indicators have been evolving and adapting to the urban realities of the region; they are given in “Annex 1 – ESCI Indicators,” which was published in 2013 and constitutes the current source of reference about them.

2.10 Box 2.1 gives a general idea of the distribution of dimensions, pillars and topics included in “Annex 1 – ESCI Indicators” and also presents examples of the indicators.

General Vision

prepared and validated during the 2010–11 period by Bank specialists in each of the ar-

Box 2.1 ESCI dimensions, pillars, topics and indicators Number of Indicator example indicators (unit of measurement)

Dimension

Pillar

Topic

Environmental Sustainability and climate change

Management of the environment and consumption of natural resources

Water

6

Sanitation and drainage Management of solid waste Energy

3

Urban sustainability

7 8

Continuity of water service (hours/ day) Households with a home connection to the sewer system (percentage) Remaining life of the site where the landfill is located (years) Average length of electrical interruptions (hours/customer) Air quality index (number) Existence and monitoring of GHG Inventory (Yes/No) Existence, monitoring and enforcement of regulations on noise pollution (Yes/No) Critical infrastructure at risk due to inadequate construction or placement in areas of non-mitigable risk (percentage)

Mitigation of greenhouse gases (GHG) and other forms of pollution

Air quality Mitigation of Climate change Noise compliance

3 4

Reduction of vulnerability to natural disasters and adaptation to climate change Control of growth and improvement of human habitat

Vulnerability to natural disasters in the context of climate change

8

Land use, Planning, and zone Urban inequality

8

Quantitative housing deficit

3

Promotion of sustainable urban transport Promotion of competitive and sustainable local economic development

Mobility and transport

12

Percentage of housing located in informal settlements (percentage) Average age of the public transport fleet (years)

Competitiveness of the economy

3

1

Days to obtain a business license (number of days)

(continued on the next page)

17

General Vision


Box 2.1 ESCI dimensions, pillars, topics and indicators (continued) Dimension

Fiscal sustainability and governability

Pillar

Topic Employment

2

Connectivity

3

Provision of high-level Education social services and promotion of social Security cohesion Health Adequate mechanisms Participatory of government public management Modern public management

Adequate management of revenue Adequate management of expenditure Adequate management of debt and fiscal obligations

Number of Indicator example indicators (unit of measurement)

9 7 6 3 4

Transparency

3

Taxes and financial autonomy

6

Expenditure Management

5

Debt

3

Average annual unemployment rate (percentage) Fixed broadband Internet subscriptions (number of subscriptions for every 100 inhabitants) Student/teacher ratio (students/ teachers) Victimization rate (percentage) Life expectancy at birth (years) Public reporting sessions per year (number) Existence of a multi-annual budget (Yes/No and years) Municipal government accounts audited (percentage) Utility cost recovery (percentage)

Gross Capital budget (capital expenditure as percentage of Total expenditures) Contingent liabilities as percentage of own revenue (percentage)

2.11 With the results obtained from the indicators, we can define the state of each topic by comparing the estimated values for each indicator against the values related to internationally agreed indexes or against benchmarks from similar cities in the region or country. These benchmarks are defined for each indicator in “Annex 1 – ESCI Indicators.” The indicators have three ranges: “green” if the service and management are adequate or good; “yellow” if there are some difficulties in service or management; and “red” if the service or management is deficient and needs attention. Each indicator receives a color strictly in line with the range where the indicator’s value falls.

2.12 It is important to state that the indicators in “Annex 1 – ESCI Indicators” are used by the Initiative as a minimum base in all the cities where it works. However, in some specific

18


vance for a city. For example, in cities whose historic centers are especially important, indicators for heritage and historical centers and/or tourism have been added. In these cases, the benchmarks must be defined for each additional indicator so that we can perform the “traffic-light” exercise.

2.13 The ESCI methodology requires defining, based on this system of traffic lights, a “color” for each of the 23 topics in the Initiative. The value or “color” for each topic is assigned in a technical discussion between the specialists of the city and the Bank, who take into account the color of the indicators and the information on the topic for the city and then assign a color to the topic as a whole. In this way, all the top-

General Vision

cases, indicators have been added to analyze and diagnose topics of particular rele-

ics with difficulties before the start of the prioritization process go through a technical review.

2.14 In parallel to the collection of indicators and the traffic-lighting of topics, in this phase, the sectoral records containing all the qualitative information on each topic (or group of topics) are completed. The sectoral records are documents of two to three pages containing: a. A diagnosis of the problem areas of the sector, for which the indicators identified and others considered important are used as support. b. A definition of who has jurisdiction over the different aspects of the sector. c. A description of existing initiatives—whether they are in the process of execution or in preparation—that aim to address totally or partially the problem areas described. d. Preliminary proposals that illustrate possible solutions for dealing with the problems under analysis.

2.15 Also in this phase, the city should have the preliminary results of the baseline studies mentioned previously (vulnerabilities, GHG inventory and urban growth); it should also have contracted consultants to prepare the other studies required for prioritization, such as the public opinion survey and the economic impact study.

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General Vision

Phase 2 – Prioritization 2.16 In this phase, the critical areas for the city’s sustainability are prioritized on basis of the information obtained in the previous phases. The prioritization exercise uses the baseline studies to apply four weighted filters.5 2.17 Based on the traffic-light exercise, a prioritization process is started for the critical topics, which are analyzed using four criteria or “filters”: (i) evaluation by citizens, (ii) the importance or economic impact of each topic, (iii) the relation of the topic to climate change (mitigation and adaptation), and (iv) the interrelation of the topic with other sectors (looking for the most integrated responses). 1. Public opinion filter: valuation of the topic according to its importance for citizens, based on the public opinion survey. 2. Economic impact filter: valuation of the topic according to the socioeconomic benefits that solving the problems would bring. Two methodologies are proposed for the economic impact study, which will be discussed in the chapter on prioritization. 3. Climate change filter: valuation based on the degree to which the topic is affected by phenomena related to climate change and greenhouse gas (GHG) emissions; this information is obtained from the climate change baseline studies. 4. Multi-sectorality filter: valuation by specialists with respect to the multi-sectoral effects of the intervention, favoring interventions that have a broader effect and contribute more to implementing the ESCI’s vision of the integrated nature of sustainable development. The aim of this filter is to understand the effects that the challenges identified in different sectors can have and to anticipate the impacts of the interventions defined as priorities. An example is the analysis of poor management of solid waste in a city; this situation can lead to the inadequate use of water bodies (if they

5

The filters relate to prioritization criteria, which determine whether a given topic has greater or lesser priority than another.

20


impacts such as obstruction/congestion of the existing infrastructure, water and air pollution, and the proliferation of pests, with consequent risks to citizens’ health.

2.18 Each filter assigns to each topic a score of 1 to 5, according to the criteria for that filter. A list is then prepared, containing the total scores for all of the topics, which are weighted as agreed with each city. The topics considered priorities are those with the highest scores, and these form the base for defining the interventions. This prioritization exercise is discussed and validated at the second meeting between the city and the Bank’s technical team that is applying the ESCI methodology. Next, the projects aimed at solving the priority problems are evaluated in light of their impact, feasibility, relation to existing initiatives in the sector, and the city’s jurisdiction for acting on each topic.

General Vision

are used as deposits for solid waste and sewage), which in turn generates negative

2.19 The methodology uses existing data, which it supplements and deepens with the qualitative participation of a group of specialists and stakeholders in each topic area. These discussions enrich the decisions and keep citizens and the municipality informed about and committed to the exercise. 2.20 At the end of this phase, a preliminary view of the most critical topics for the city has been developed. To be evaluated correctly, some of these topics may require deeper analysis than the collection of sectoral indicators and records that took place in phase 1. As a result, voluntarily and at the discretion of the team leader, additional baseline studies (ABSs) can be contracted so that the city can deepen aspects of particular interest.6 In line with the progress made in the application of the methodology, these contracts can be brought forward into phases 1 (analysis and diagnosis) and/or 2 (prioritization). With regard to this, the Bank has prepared terms of reference for contracting eight possible studies: (i) fiscal resources management; (ii) characterization of motorized transport; (iii) characterization of urban space, walkability and bicycle paths; (iv) connectivity; (v) water and sanitation; (vi) solid waste; (vii) energy; and (viii) citizen security. The specific content of each ABS is detailed in Chapter 4, Phase 1, section 4.34, table 4.2.

6

The Bank has designed terms of reference for contracting the eight ABS; these are listed in “Annex 5 – Terms of Reference of Additional Baseline Studies.”

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General Vision

Phase 3 – Action Plan 2.21 This phase comprises the identification, development and selection of strategies and/ or actions for the areas prioritized in phase 2; the step-by-step preparation process can be found in Chapter 4, Phase 3, sections 6.1 to 6.35. The Bank’s technical team works in close collaboration with the team of city counterparts, obtaining technical depth and a strong sense of commitment from each entity. In this phase, the prioritized areas (i.e., those with the highest scores) are analyzed in more detail to recognize the opportunities for improving the existing situation and the risks involved in doing so, and to identify the sources of financing and the responsible actors that will enable the implementation of the defined interventions. 2.22 The city/IDB teams create an Action Plan for executing each of the identified interventions. Each project must have its own financial structure, timetable, responsible officers, estimate of the costs of pre-investment studies and of investment, and possible sources of finance. The Plan must consider short- and medium-term stages, in which the city administration has the resources and leadership to start specific actions and carry them out within its administrative period, taking into consideration political variables, the generation of results and monitoring. However, these actions are aimed at achieving long-term targets that must be met by future city administrations. This Plan is set out in the city’s letter of navigation for its road toward sustainability. At the end of this phase, an additional meeting is held between the Bank and the city, closing the Action Plan and validating it with the corresponding levels. 2.23 By applying the ESCI methodology, the Bank replaces the traditional approach of collecting and writing extensive studies (which contain detailed information and require long analysis times) with a methodology that uses rapid diagnosis and specific proposals. These proposals are defined on the basis of the abovementioned data and a fluid dialog between the Bank’s technical team, the consultants and the team of local counterparts. This dialog gives rise to a variety of technical solutions, reflections and proposals from the various actors of the city and the IDB, based on their sectoral experience as well as their work in other ESCI cities and on other urban-intervention projects.

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2.24 Upon the conclusion of this phase, the initial implementation stage of the Action Plan begins, in which the Bank assists the city government with mobilizing financial resources and preparing projects for some of the solutions prioritized in the Plan.

B.

Second stage: Execution

Phase 4 – Pre-investment

General Vision


2.25 The second stage of the ESCI methodological instrument begins with the initial execution of the Action Plan. By initial we mean preparation of the pre-investment studies necessary for implementing the interventions proposed in the Plan, as the prelude to the investment stage itself. The pre-investment studies can be prepared at the prefeasibility or feasibility level and will be part of soft infrastructure projects (intangible goods) or hard ones (tangible goods), depending on the type of interventions prioritized in the previous phases. The Initiative collaborates with the city in financing or obtaining financial resources for the preparation of the pre-investment studies, and it provides technical assistance with preparing the terms of reference for contracting. 2.26 In addition to laying the foundation for access to financing for the projects in the long term, in this phase, the aim is to define the feasibility of executing the interventions set out in the Action Plan. The chapter of this guide on the pre-investment phase (sections 7.1 to 7.14) provides the necessary tools for its implementation.

Phase 5 – Monitoring 2.27 It is also fundamental to end the project with a strengthened citizen monitoring system, whose bases must be laid from the start (phases 0 and 1), with the participation of diverse private-sector and citizen groups in the discussions on priority topics. A monitoring scheme founded upon similar principles to those of the Cómo Vamos Cities Network is suggested, which brings together a group of independent citizens (from academia, the press, chambers of commerce, and other sectors) to create a light institutional scheme

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General Vision

with economic and technical capacities. These schemes aim to establish an impartial and technical annual follow-up to the priority topics and to topics that citizens consider important for the city’s sustainability. A detailed description of the model and its startup is given in Chapter 8, Monitoring (sections 8.1 to 8.11).

2.28 To start up this mechanism and thus monitor the city’s progress in terms of its sustainability in the topics that the citizens consider to be priorities, the ESCI provides funds to initiate a new monitoring system or strengthen an already existing one, administered by an independent organization from civil society.

Cities Network, urban dashboard and communication platform 2.29 As more LAC cities apply the ESCI methodology, they will come to form part of a Cities Sustainable Network. Cities that join the Network will be able to share experiences, benchmarks, best practices and lessons learned. Capturing and sharing data and information increases the knowledge of the cities; it also permits rapid evaluation of and effective follow-up on the progress achieved and facilitates the exchange of good practices.

2.30 With this same objective, the Initiative is moving ahead with constructing an urban dashboard, which will give access to the diagnoses and action plans developed by each city linked to the ESCI. The website is at http://www.urbandashboard.org. 2.31 The ESCI also has a communication platform whose purpose is to publicize the initiative, its activities and its knowledge products. The platform aims to respond to the problem of lack of access to information, which many intermediate cities of LAC face, and to share the cities’ conditions, problems and achievements in relation to environmental, urban and fiscal sustainability. The ESCI communication platform uses various online communication media. Its base is the website at http://www.iadb.org/ciudades, supplemented by a blog and a Twitter account, all designed to systematically disseminate its knowledge products, articles, press statements, pictures, photos, computer graphics and videos in a way that relates all these components to each other.

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General Vision


25

Phase 0 – Preparation: Collection of Basic Information and Identification of Stakeholders

3.1

3

The cities that form part of the ESCI must be considered emerging in the terms defined by the Initiative—that is, they must have higher than average growth in their countries in terms of the economy and population. Once this is confirmed, the city can initiate application of the methodology and formalize its participation in the process. To do this, prior to the first meeting between the city and the Bank, the Bank must have received the city’s expression of interest in joining the Initiative, as well as the agreement of the national government agency responsible for actions and programming in the country. Finally, it must be established that the Bank’s country strategy includes the topics of sustainability in cities and integrated urban development.

3.2

After these requirements have been completed and the city’s entry into the ESCI has been accepted, the Bank Representative in the country informs the local authorities. The city government then designates a focal point in the city, which is the person with whom the IDB team leader will coordinate the activities to be implemented. This coordination will be recorded in writing and included in the high-level meetings to be held during the first mission to the city. Later, the details of the starting date and the program timetable will have to be coordinated with the local authorities acting as counterparts in the Initiative, with the objective of establishing a convenient timetable for all the parties involved. Ideally, the ESCI city government will be at the start of its mandate so there is sufficient time for it to complete the diagnosis and then develop the Action Plan and begin the Plan’s execution.

3.3

After the preliminary dialog with the local authorities has been established, phase 0 begins, which has four objectives: (i) form the IDB technical team; (ii) dialog with the various city sectors to obtain an initial vision of the most critical challenges to sustainability (as background to the main diagnosis to be developed in phase 1); (iii) identify the main stakeholders involved; and (iv) start collecting the general studies of the city and other relevant available information.

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Phase 0 – Preparation

3.4

Phase 0 requires approximately three to four weeks and must take place before the IDB technical team starts work in the city. In this phase, the studies available on each topic are assembled, the existing data and information on the city are collected, and the main institutions and actors involved are jointly identified (i.e., local team and Bank); this will enable better use of time in the subsequent phases of the methodology.

3.5

In phase 0, it is important to define the ESCI’s area of study and work. This is particularly critical in the case of conurbations or metropolitan areas. The area of study will necessarily have to include the physical and functional space of the city, going beyond political–jurisdictional limits.

3.6

It is also fundamental to move ahead with the contracting of the baseline studies and, if they are considered useful, of the ABSs. With the baseline studies, we are able to: evaluate trends in urban growth by analyzing the evolution of the urban footprint; prepare a vulnerability map of the city based on projections of extreme events related to climate change; and develop a GHG inventory for the city. With the ABSs, we are able to deepen knowledge of other specific topics considered relevant because of their role in the current situation of the city. Because of their depth, it takes approximately six months to prepare these studies, which is why it is important to start their contracting at this stage.

3.7

The five basic steps that the team leader and/or focal point of the Bank in the country will have to follow are: 1. Arrange the city’s letter of expression of interest and commitment. 2. Decide a work timetable, start date and times for each phase. 3. Identify the main political actors in the country/city. Special care must be taken in centralized countries, where the national authorities may be more active than the local ones, in which case it is necessary to have appropriate and timely representation at both levels of government. 4. Establish the first links with key stakeholders in civil society to involve them in the work of the ESCI right from the start of the process, with a view to the future startup of the citizen monitoring scheme.

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inventory of recent studies and documents (i.e., covering the last five years) in relation to ESCI topics and sectors.

A.

Organizing the implementation of the ESCI methodology

3.8

Because of the speed and complexity of the analysis required, the specialists who lead the application of the ESCI methodology have to evaluate and make decisions rapidly. In the absence of perfect information, the teams need to involve experts with deep knowledge of urban problems, along with local and national professionals who have ex-


5. Collect all available information that provides basic data on the city, including an

perience in all the areas, and leaders who give priority to the topic area.

3.9

That said, successful implementation of the methodology requires the teams involved to have an appropriate combination of leadership and specialization, since this is essentially an interdisciplinary task.

3.10 As mentioned previously, one of the actions to be developed as part of this phase of preparation is formation of the work teams of the institutions directly involved in the process of applying the methodology. Their organization will depend on the particular institutional scheme for each case/city. In general terms, the work teams come from the Bank, the respective local authorities (municipal and national), and/or other organizations involved (e.g., local development agencies, NGOs, etc.). 3.11 From the organizational point of view of the Bank, a coordinating group has been formed to execute the ESCI. The Initiative Coordinating Group (ICG) is led by a general coordinator, who reports to the Vice Presidency for Sectors (VPS), and two managing coordinators: one representing the Infrastructure and Environment office (INE) and the other the Institutions for Development office (IFD). For individual projects in each city, the Bank forms a technical team consisting of: (i) a specialist who acts as team leader—ideally, this person is from the Bank’s representation in the country; (ii) a sectoral coordinator responsible for supervising programs in a group of countries; and (iii) experts with knowledge and experience in each topic of the ESCI dimensions. On average, the

29



technical team should have between seven and nine specialists for all the areas included in the analysis.

3.12 In the absence of a team leader who is part of the Bank’s representation in the country where the work is to be done, the Bank assigns a specialist from its head office to perform this role; it also appoints a specialist who is in the country and has knowledge of institutional details and the local conditions in cities. The main function of the local specialist is to be the liaison between the team leader, the technical team and the team of local counterparts. It is also desirable to have a temporary support professional whose primary function is to collaborate in the processes of collecting information, following up on the indicators, and applying the methodology during the various stages. 3.13 The city, for its part, forms a team of local counterparts that has, as a minimum, a coordinator; this individual interacts with the local institutions and with the implementing teams, coordinates visits and agendas, and coordinates and agrees on actions and missions. It is recommended that the coordinator holds an executive-level position in the local administration, with access to the mayor or governor, as well as to key areas (treasury/finance, planning, infrastructure). Also, each department of the city government that participates in the process must appoint a technical officer with responsibility for the topic areas related to their department. 3.14 In addition, given the Bank’s limited capacity to replicate the model in more cities than those in the Initiative, the methodology has gradually been adapted to become a regional public good. Strategic partnerships have been formed with third-party institutions that have the potential to contribute added value to the methodological process through direct participation in its execution. These partnerships are alternative models of implementing the methodology. In these cases, the formation of the Bank’s working group varies in relation to the needs of the process in each city, and the third-party institution has to form an internal team with sufficient capacity to make a technical contribution. However, and in any scenario, the Bank will always maintain its role as advisor, instructor and supervisor of the correct application of the methodology, as well as retaining intellectual authorship.

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3.15 With respect to these work schemes, box 3.1 shows alternative models of implementation that are being used in cities in the LAC region.

Box 3.1 Alternative models for implementing the ESCI methodology The ESCI is being replicated by teams from other institutions interested in its use as a tool for prioritizing and structuring public investment projects at the subnational level.

Findeter Model (Colombia) La Financiera de Desarrollo Territorial (Findeter) is a Colombian development bank that grants loans to territorial entities, metropolitan areas and municipalities. In 2012, the IDB and Findeter signed a strategic partnership to collaborate on the implementation of the ESCI methodology in emerging Colombian cities. Also in 2012, the cities of Manizales, Pereira and Bucaramanga joined the Initiative through this partnership. In 2013, another two cities joined, and the program is expected to be replicated in a total of 10 cities by 2016.



To apply the methodology, Findeter formed an internal unit with a group of specialists in the topic areas covered by the ESCI. This is the unit that leads implementation in situ.

La Caixa Model (Brazil) La Caixa Econômica Federal is one of the largest commercial banks in Brazil. La Caixa and the IDB signed a Memorandum of Understanding in June 2012 during the Río+20 meeting, with the common interest of cooperating on programs and projects to promote social development in Brazil. The support of La Caixa has been fundamental in the expansion of the ESCI in Brazil. This bank has become one of the main strategic partners in the Initiative, making replication of the methodology possible in the region’s largest country. The first city to join the La Caixa–ESCI program was João Pessoa (Paraíba state) in March 2013. In 2014, another three cities (Vitoria, Palmas and Florianópolis) joined, and the La Caixa–IDB program is expected to be implemented in 10 cities over the next few years. To apply the methodology, it was decided to subcontract to academic institutions and foundations that work on urban topics to implement the methodology. In the same way as in the Banobras model in Mexico, La Caixa, under the supervision and monitoring of the Bank’s ESCI team and sectoral specialists, subcontracts to academic institutions and non-profit entities to apply the ESCI (continued on the next page)

31



Box 3.1 Alternative models for implementing the ESCI methodology

(continued)

methodology in the field. The Bank’s ESCI team, in addition to providing supervision, trains the staff of the subcontracted entities in the methodology.

Banobras Model (Mexico) The Banco Nacional de Obras y Servicios Públicos SNC (Banobras) is a Mexican government development bank whose purpose is to finance or refinance public or private investment projects in public infrastructure and services, as well as to contribute to the institutional strengthening of governments at the federal, state and municipal levels. The ESCI–Banobras collaboration scheme includes the identification of Mexican intermediate cities with the potential for implementing the sustainability recommendations included in the ESCI Action Plan. Banobras grants the financing for implementing the Initiative in these cities and subcontracts to a private Mexican company or institution to supervise the application of the methodology. Throughout the process, the ICG provides technical support, collaborates in the processes of creating and consolidating the ESCI, supervises the execution of the activities, and collaborates closely with Banobras in defining and developing the projects prioritized in the Action Plan. As in the model of La Caixa Econômica de Brasil, Banobras—under the supervision and monitoring of the Bank’s ESCI team and the sectoral specialists—subcontracts to academic institutions and non-profit entities to apply the ESCI methodology in the field. The Bank’s ESCI team, in addition to providing supervision, trains the subcontracted institutions’ personnel in the methodology.

YPF Model (Argentina) Yacimientos Petrolíferos Fiscales (YPF) is the main producer of hydrocarbons in Argentina. In November of 2013, the Bank and the YPF Foundation signed an Action Plan and Operating Framework for implementing the ESCI in Argentine oil cities, placing the cities of Añelo (Neuquén) and Las Heras (Santa Cruz) in a pilot plan. These small cities suffer not only from the set of problems commonly associated with rapid urban growth, but also from others specifically related to the cities’ dependence on the activity of a particular industry that is highly remunerative and in full expansion (which causes, amongst other problems, income inequality, a lack of economic diversification, and a sense of alienation in the population). (continued on the next page)

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(continued)

IMPLEMENTATION OF THE ESCI METHODOLOGY

ALTERNATIVE MODELS

ESCI IS BEING REPLICATED BY TEAMS OF OTHER INSTITUTIONS INTERESTED IN USING IT AS A TOOL FOR PRIORITY PROJECTS AND FOR STRUCTURED PUBLIC INVESTMENT PROJECTS AT THE SUBNATIONAL LEVEL



MEXICO BANOBRAS MODEL

10 CITIES

COLOMBIA FINDETER MODEL

10 CITIES

ARGENTINA

BRAZIL

YPF MODEL

CAIXA MODEL

5 CITIES

10 CITIES

THE NUMBER OF CITIES AND THEIR LOCATION ON THE MAP ARE ESTIMATES AND MAY VARY ACCORDING TO THE NEEDS OF THE PROGRAM

33



34


(continued)

To implement the methodology, the YPF Foundation formed a central unit with professionals from different specialties, who apply the methodology—especially adapted to this type of city—with the technical advice and close involvement of the IDB. To strengthen the local teams, the ESCI-YPF team included the following bodies in the execution of the activities: Universidad Nacional de la Patagonia (UNPA), Neuquén Planning and Action Council for Development (Copade), and YPF institutional staff located on the ground.



35

Phase 1 – Analysis and Diagnosis: Identification of Problems

4.1

4

The general objective of this phase is to identify the challenges of sustainability for the cities by means of a rapid evaluation, using a set of approximately 120 indicators that provide a broadly based image of the urban area. Its specific objectives are: (i) obtain an overview of the city through sectoral dialog; (ii) complete the ESCI indicators form; (iii) perform the traffic-light exercise; and (iv) go ahead with contracting the baseline studies, the studies required to apply the filters and, if necessary, additional baseline studies.

4.2

The set of ESCI indicators, which are used as a tool for developing this phase, covers the three dimensions of sustainability considered in the Initiative: environmental, urban and fiscal. To facilitate the analysis, the indicators are grouped into 23 topics and 59 subtopics (see “Annex 1 – ESCI Indicators”).

A.

Preliminary diagnosis

4.3

General knowledge of the city (collection of information on officers and actors involved). This process begins with the first meeting of the IDB with the city’s technical teams. During this visit, a plenary meeting is held at which the city presents its work teams as well as its general and sectoral plans. After obtaining general information on the situation and a clear view of the city, the Bank’s technical team holds sectoral meetings with the local teams responsible for each topic. During these meetings, participants present and discuss in greater detail the sectoral plans and the main problems and activities for executing the plans in each sector and area. Meetings are also held with a broad group of relevant stakeholders from the city (foundations, NGOs, trade associations, etc.) to present the Initiative, answer questions, and learn about their opinions and priorities.

4.4

In these sessions, the specialists of the IDB technical team acquire a clear view of the reality of each topic/sector, and the visit ends with a synthesis meeting of the Bank’s technical team. These sectoral meetings also go ahead with the collection of the ESCI

37


Phase 1 – Analysis and Diagnosis

indicators. With these inputs, added to the sectoral knowledge of the Bank’s specialists, preliminary hypotheses can be formed on the problems detected, strategic lines of work and potential actions.

4.5

It is important that this process be documented for use as support in explaining the values of the indicators for each topic, so sector records need to be prepared. These contain qualitative information on each topic (or group of topics, if possible). These records are documents of two to three pages that define: a. A diagnosis of the problem areas of the sector, using as support the indicators identified or others considered important. b. A definition of who has jurisdiction over the aspects of the sector. c. A description of existing initiatives, either in execution or in preparation, whose objective is to address totally or partially the problem areas described. d. Preliminary proposals giving possible solutions for dealing with the problem areas identified.

4.6

These records are prepared by the Bank’s sectoral specialists; in the case of outsourcing, they are prepared by the contracted institution or university, under the supervision of the ESCI team and IDB specialists.

B.

Identification of the challenges of sustainability: Indicators and traffic lights

4.7

Analysis and interpretation of the information. In this part of phase 1, the ESCI indicators identified are analyzed. Analysis of the topic indicators must be based on adequate information and, if possible, use a simplified methodology. The data on the completed indicator form must be obtained from secondary or tertiary sources (for example, interviews with sectoral experts of the municipality). It needs to include the source and year, the methodology for obtaining the values or for the calculation (if required), and

38


ample, if a variable proxy is used, or if national averages are used for local conditions).

4.8

The main sources for this information, in addition to municipal departments, are the latest population census, public service companies, reports of other international bodies, and academic research on the city from the country’s universities. It is suggested that specialists from the city government collect the values of the indicators. However, in some cases during this phase, it may be necessary to contract a consultant (i.e., an economist or urban expert) to initiate the search for statistical information that will complete the panel of indicators.7 Many cities do not possess this information, so considerable time may have to be invested in the search, which should therefore start as soon as possible.

4.9

After the indicator form has been completed, the values are assessed in relation to comparative values such as benchmarks. The benchmarks can be of two types: (i) a theoretical benchmark, with values defined in consultation with sectoral specialists; these values


any additional observations on the limitations or weaknesses of the value found (for ex-

include the IDB’s vision for the region; (ii) in certain cases, such as fiscal indicators, comparisons can be made with cities in the country that are benchmarks of good practices and that use the same fiscal or governance model as the city under analysis (for example, centralized organization based on transfers from the provincial or national government).

4.10 These comparative benchmarks or values are grouped into three ranges, which are assigned a color according to the following formula: (i) green when the indicator is within the expected parameters; (ii) yellow when the indicator has deficits; and (iii) red when the indicator is in a critical state. This process, known as traffic-lighting, uses a trafficlight color (green, yellow or red) for each indicator, thereby giving a clearer idea of how near the found value is to the expected range for achieving sustainability in the region. 4.11 Each topic is composed of several indicators. With this in mind, the final evaluation of the color assigned to the topic comes from analyzing the final traffic lights for all the indicators included. The final decision on the color to adopt for the topic can be difficult

7

This search will be supplemented by and verified with the local specialists later.

39



in certain cases (for example, if a topic contains some indicators in red, others in yellow and others in green). When this happens, sectoral experts in both the IDB and the municipality are consulted to throw light on the challenges and opportunities in this sector and, in this way, determine the traffic-light color for that topic. The key discussion points for defining the color of each topic must be reflected in the sector record.

4.12 The indicators for the Water topic, with their respective benchmarks, are shown in table 4.1. “Annex 1 – ESCI Indicators” contains a detailed list of indicators, their objectives, the benchmarks for LAC, potential sources of information and the justification of the “red–yellow–green” classification system. 4.13 The main result of this phase is the classification of all the topics with a definitive color (i.e., the traffic-light exercise), as shown in figure 4.1. 4.14 Lastly, for the prioritization process to be carried out in the next phase, scores are assigned to each topic: topics labeled green receive a score of 1 (low priority), topics labeled yellow receive a score of 3 (medium priority), and topics labeled red receive a score of 5 (high priority). 4.15 In addition to collecting average indicators, in several ESCI cities, certain indicators were studied at a disaggregated level within the city (see box 4.1).

C.

Three baseline studies: Greenhouse gases, risk and urban footprint

4.16 To obtain basic information to supplement and deepen the diagnostic and prioritization phases in the ESCI methodology, three baseline studies are prepared in each city: (i) analysis of GHG emissions, (ii) analysis of disaster risk and vulnerability to negative impacts of climate change, and (iii) analysis of the urban footprint. These baseline studies are holistic and integrated in character and of fundamental importance in all phases of the methodology. The information generated by these studies provides a global and integrated vision of the city, as well as of the problem areas in terms of climate change and risks from natural disasters, as a guide for decision making.

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Table 4.1 Example of indicators and benchmarks in the Water topic

#

Topic # Subtopics

# Indicator

Description

1

Water 1 Water coverage

1 Percentage of households with home connections to the city’s water network 2 Annual water consumption per capita

Percentage of households with home connections to the city’s water network

2 Efficiency in the use of water

3 Efficiency 3 Continuity of in the water water service supply service 4 Water quality

4 Availability of water resources

Theoretical benchmark Unit of measurement Green Yellow Red Percentage

Annual consumption of water L/person/ day per capita of people whose homes have a water connection to the city’s network Annual average of daily number h/day of hours of continuous water supply per household

Percentage of water samples in Percentage a year that comply with national potable water quality standards 5 Non-revenue Percentage of water that is lost Percentage water from treated water entering the distribution system and that is accounted for and billed by the water provider. This includes actual water losses (e.g., leaking pipes) and billing losses (e.g., broken water meters, absence of water meters, and illegal connections). 6 Remaining Number of years remaining Years number of with a positive water balance, years of a considering the supply of positive water available water (taking into balance account hydrological cycles) and the demand for water (projected uses, including population, industrial sector, ecological flows, etc.)

90– 75–90% < 75% 100%

120– 200

80–120 < 80 or > or 200– 250 250

> 20 h/ day

12–20 h/day

< 12 h/ day

97%

90– 97%

< 90%

0–30% 30–45% > 45%

> 10

5–10

