New report launched on investing in climate-resilient infrastructure
Proven innovative policies and mechanisms are unlocking investment for much-needed climate-smart infrastructure in cities, according to a new report launched by UN Secretary-General Ban Ki-moon at the Climate Summit for Local Leaders, which took place on December 4 during the UN Climate Change Conference in Paris. The State of City Climate Finance report is the first issued by the Cities Climate Finance Leadership Alliance (CCFLA), a coalition of over 40 banks, national governments and civil society organisations launched by the UN at the Climate Summit in September 2014. “Major investment is urgently needed for climate action in cities,” said the UN Secretary-General. “The recommendations in this report, if put into place, can help unlock the capital needed. We know these solutions can work, they just need to be scaled up. I urge governments, banks and the international community to act on these practical recommendations.” The aim of the Alliance is to accelerate investment in low-emission, climate resilient infrastructure in cities, and to close the investment gap in urban areas over the next 15 years. Alliance members are working on a plan to help translate the report's recommendations into action. Climate action in cities is crucial to addressing the global climate threat. Urban areas account for over 70 percent of energy-related CO² emissions, and the world’s cities produce almost half (37-49 percent) of all global greenhouse gas emissions. Cities are also on the front lines of climate impacts and urgently need to build resilience. More than 80 percent of the overall annual global costs of adaption to climate change are estimated to be borne by urban areas, according to the World Bank. “There is no way that we get to two degrees or to 1.5 degrees without building and living in, and transporting ourselves around cities in a very different way than we do today,” said Rachel Kyte, the World Bank Group’s Special Envoy for Climate Change. “At the same time cities are growing. In the next 30 years another two billion people will move into cities, and so we have to find a way to help cities get the financing necessary to become liveable, green, clean, competitive, job-rich cities.” The State of City Climate Finance makes five recommendations for mobilising investment in low-emission, climate-resilient urban infrastructure:
  1. Urge national governments to adopt policies and incentives that encourage cities to invest in low-emission and climate-resilient infrastructure.
  2. Support cities in adopting frameworks that put a price on climate externalities, such as cap-and-trade mechanisms.
  3. Strengthen facilities that can support cities in developing investment-worthy climate action projects.
  4. Direct international development finance through local financial institutions, which are well positioned to help cities finance climate-smart infrastructure solutions.
  5. Create a network of labs to innovate new financial instruments and funding models.
The report, which was financed by The Children’s Investment Fund Foundation and Agence Française de Développement, analyses the obstacles that many cities face in obtaining the financing they need, including uncertainty over regulatory and tax policies, lack of expertise in project development, lack of control over infrastructure planning, high transaction costs and lack of proven funding models at the city and regional level. The McKinsey Center for Business and Environment provided research and analysis to inform the report. The Children’s Investment Fund Foundation and Agence Française de Développement provided financial support for the report.
By Andrew Bates??????