Until recently cities have been at the fringe of climate finance, but shifting them to the center might mean huge benefits for climate action globally, a new report by C40 Cities and its partners suggests.
Financing the Sustainable Urban Future is a first of its kind publication to provide a comprehensive insight into how climate finance in cities can support green urban infrastructure, stimulate innovation and ultimately allow us to drastically cut emissions within a short period of time.
According to the report, current institutions do not provide sufficient support for financing sustainable infrastructure identified as necessary to implement ambitious climate action plans. Green bonds, municipal development funds and intercity networks have done a great job in allowing cities to join the global climate action, but at this point they are no longer enough for the relevant scale of action.
Since the Paris Agreement climate action in cities has been gaining increasing attention. Nature-based adaptation, low emissions zones, rewilding and many other solutions uniquely applicable at the scale of cities could play a decisive role in avoiding critical climate changes while lowering the probability of applying riskier solutions such as geoengineering or negative-emissions technologies.
The number of publications on urban climate governance has skyrocketed in the last five years while cities globally from New York to Helsinki and from London to Beijing are becoming leaders far beyond national level commitments. Meanwhile, they could do much more if global financial institutions provided sufficient space to do so. For a timely response to climate change a key shift in focus towards cities and subnational institutions, rather than nation-states, as core recipients are required.
One way to do this is through the establishment of a Green Cities Development Bank, which would bring together common features of sustainable development banks but focus primarily on supporting green urban futures. Based on preliminary estimates the bank could help additionally support new green urban infrastructure projects by $50 billion just over the coming decade.
According to Mark Watts, executive director of C40 cities, the bank would allow us to scale up the leadership of cities on climate actions even further. “More than 80 cities have already committed to developing climate action plans that deliver their fair share of emissions reductions to keep global temperature rise below 1.5 degrees Celsius,” he says.
“That represents a huge amount of sustainable infrastructure and investment that needs to be urgently delivered,” Watts adds. “A Green Cities Development Bank would radically improve the financing conditions for cities and help tackle the significant financing barrier cities face”.
Mayors of cities leading on climate action also believe the new body is urgently and highly demanded, with Mauricio Roda, mayor of Quito, believing that the bank could be a critical contribution to making the “vision of a sustainable future a reality”.
With many countries lagging behind in their climate commitments, the bank could support leading cities in promoting a decentralized and locally aware climate action model, helping them become hubs for their neighbours to learn from. This could be particularly important for middle- and lower-income countries, as well as those with high corruption and slow decision-making at the national level.
The report is aimed at starting discussions on possible models for the bank`s existence (e.g. city-backed or state-guaranteed). However, the authors are sure that no matter what form it takes, the bank could play a decisive role in the future of global climate action.