Tackling the climate crisis requires investment in green urban infrastructure at an unprecedented speed
and scale
Without financing, cities simply cannot achieve a green transition at the scale and pace required to meet the vital targets of the Paris Agreement. Currently, the world’s major cities vary significantly in their abilities to allocate existing municipal budgets, or attract external finance, for climate-smart infrastructure. Limited by national policies, taxation powers, and institutional capacity, many cities are unable to access most forms of private investment. In fact, among 500 large cities in developing countries, only 5% have credit ratings recognized on international capital markets.1
C40’s work addresses a range of municipal climate finance challenges, at different stages of project maturity, and across major urban infrastructure groups: clean energy, zero-carbon buildings, public transportation, waste and resilience. By scaling up investment in these areas, and simultaneously divesting from fossil fuels, mayors are creating safer, healthier and more economically sustainable communities for the current and future residents of their cities. Additionally, C40’s work on climate finance is aligned with the delivery of each city’s Climate Action Plan and inclusive climate action principles, ensuring future investments support the priority actions of the city, and improve the lives of the most vulnerable.
C40 is also working towards improving the supply of finance to cities, including building stronger relationships with key finance institutions and calling for public banks to step up support and for enabling policies that can improve the fiscal capacity of cities. We work closely with partners including the Global Covenant of Mayors for Climate & Energy, the City Climate Finance Leadership Alliance (CCFLA), ICLEI and WRI to promote access to finance for cities.
Cities play a powerful role in driving investment that can shape the transition to a greener economy and more equitable society
C40 supports cities to divest their pensions and investments from fossil fuels, shift towards climate solutions and advocate for investments in the future we want.
Cities can receive support through a variety of mechanisms, including but not limited to:
- Finance Academies – intensive three-day workshops that bring together city officials with technical experts to address financing challenges preventing implementation of a specific climate solution.
- Research – through consultation with cities and peer organisations, the finance programme identifies gaps in the knowledge available to cities, and engages leading experts to provide climate finance resources tailored to city practitioners.
- Capacity development and knowledge sharing – workshops, webinars and trainings for cities to continuously develop skills in project development, financing, business planning, climate change, integration of benefits into climate action, sustainable investing and other areas. .
- Project preparation support – the finance programme offers tailored support via the C40 Cities Finance Facility to selected cities to develop technical studies needed to bring projects to a bankability stage
- Investor engagement – primarily through the creation of investor pitch decks, or the organization of investor roundtables, for specific areas/geographies (e.g. electric buses in Latin America).
- Bespoke technical assistance – ad-hoc and tailored support as challenges arise in cities.
C40 support helps cities accelerate their journey from identifying an area for emissions reduction, to a well-defined, investment-ready project, and ultimately creating more green and resilient urban spaces.
Sources
- Carter, Lauren; Boukerche, Sandrine (2020). “Catalyzing Private Sector Investment in Climate Smart Cities” (English). Invest4Climate Knowledge Series Washington, D.C.: World Bank Group.
- https://newclimateeconomy.report/2018/key-findings/
- New York Times, Climate Change Could Cut World Economy by $23 Trillion in 2050, Insurance Giant Warns.