2 J. JUPESTA ET AL.
Across Asia, several approaches have previously been employed to low-
carbon cities, particularly in the transportation, building, and waste man-
agement sectors. Several cities in Japan, China, and Indonesia have already
invested in initiatives aimed at developing low-carbon/green cities. Cities
require intensive urban infrastructure development to accommodate rapid
and substantial growth. However, as a result of the fi nancial constraints on
local governments, funding urban infrastructure projects has become a
critical issue. Plans to overcome these constraints may prove critical to
achieving low-carbon development pathways.
Against this background, this book, which is based on the Asia-Pacifi c
Network for Global Change Research (APN) funded project, explores a
new funding mechanism that engages numerous stakeholders in public–
private partnerships. The private and public sectors should work hand in
hand to foster green investment. As economic and political power has
shifted to cities and megacities, particularly in the Asia Pacifi c region, local
economic development has been successfully employed in numerous cities
as a strategy to address issues involving uneven growth and extreme pov-
erty (SDSN 2013). Cities also play a critical role in national growth and in
generating environmental externalities. Cities account for 70 % of all pub-
lic direct investment and 50 % of all public procurement. Moreover, cities
offer economies of scale for measures designed to address climate change
adaptation (OECD 2014).
1.2 M ETHODOLOGY AND APPROACHES TO ADDRESSING
GREEN INVESTMENT IN ASIAN CITIESThis research project uses explorative qualitative and quantitative
approaches to defi ne, measure, and monitor green investment at the city
scale in Jakarta, Yokohama, and Shanghai and in certain slum areas in
India. Several methods were applied in this study, including risk analysis,
cost–benefi t analysis, integrated assessment modelling, input–output anal-
ysis, and comparative analysis. Chapter 2 examines the effect of feed-in
tariff (FIT) and other renewable energy investment policies; we examine
variations in expected returns and risks under different FIT conditions. We
also study investment returns and risks by examining net present value
(NPV) and internal rate of return (IRR) measures using the discounted
cash fl ow (DCF) method. The DCF method is used as an investment anal-
ysis and evaluation model. NPV estimates future cash fl ows, and IRR can
determine investment benefi ts by estimating the rate of operating revenues