Cities Fit for Climate Change

Cities have a key role to play in shaping a low-carbon and climate-resilient future. Already today, half of the global population lives in cities, accounting for up to 70% of global CO₂ emissions. At the same time, cities are particularly vulnerable to climate change, as most of the urban population lives in low-lying coastal areas. High population density and the concentration of built infrastructure further increase vulnerability (OECD and Bloomberg Philanthropies, 2014).

Cities have great potential to reduce greenhouse gas emissions, for example, through increased energy efficiency in buildings as well as low-carbon transport and waste management. Cities can also use transportation and land-use planning to promote transit-oriented development and compact growth. Regarding adaptation, cities can invest in resilient infrastructure, public health, energy and water security, and other fields of action. Considerable investments are necessary to unlock this huge potential for mitigation and seize opportunities for adaptation.

However, cities often have difficulties in accessing and managing finance. For example, cities often lack awareness, knowledge, skills, and financial resources to strategically integrate climate change issues into local budgeting and planning, manage available funding, and access new sources of capital for climate change projects. Other barriers are related to external factors, such as detrimental national policies and difficult access procedures for international climate funds.

Against this background, this study examines different aspects of urban climate finance. The first part of the study, which is based on an in-depth literature review, analyzes the status quo of climate finance for cities worldwide and identifies trends, challenges, and opportunities for increasing urban climate finance. The second part consists of three interview-based case studies that illustrate both the current situation and potentials for urban climate financing in eThekwini (South Africa), Santiago (Chile), and Chennai (India), the three partner cities of the GIZ global project Cities Fit for Climate Change. The study illustrates opportunities to increase funding for urban climate action.

In writing this study, a number of challenges were encountered. One particular barrier was the diversity of definitions, approaches, and climate finance-related needs across different countries. This makes it difficult to draw general conclusions on what should best be done to improve climate finance for cities in developing and emerging economies. Another challenge for this study was that, essentially, challenges for climate finance are deeply mixed with challenges related to general municipal finance and capacity for climate-smart development. While the study will look at the most prominent issues in all these fields, it cannot provide solutions to basic municipal finance and governance issues.

This study has been commissioned by the global project Cities Fit for Climate Change. The project is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for the Environment, Nature Conservation, Building, and Nuclear Safety (BMUB). It cooperates with various partners internationally and in Germany, particularly in its three partner countries: India, Chile, and South Africa.

The project aims to strengthen cities as actors of sustainable development. Ultimately, cities are responsible for the development of integrated, resilient, and low-carbon instruments for sustainable urban development. The project supports innovative approaches for urban planning and makes cities “fit for climate change.” Thus, dealing with climate change should become an integrated and strategic part of urban development. Plans, programs, and strategies, as well as combined investments, will be more resilient and adaptable to climate change and tend to prepare the ground for future low-carbon plans, programs, and strategies. One of the project outcomes will be a climate-friendly urban development approach that provides a starting point for thinking about a new urban design.

Source:

https://adelphi.de/de/system/files/mediathek/bilder/GIZ_Urban%20Climate%20Finance.pdf