By C40 Executive Director Mark Watts
Last year every region of the world was hit by severe climate events, and scientists have warned that weather patterns in the coming year will likely result in unprecedented heatwaves and a rise in global temperature. Cities – where more than half of the world’s population live – are disproportionately at risk. The need to adapt to increasing climate impacts is becoming ever more urgent, especially in cities most affected by the crisis.
Of the world’s 33 megacities, 21 are in low-lying coastal areas. Cities are increasingly confronted with extreme heat, flooding, storms and sea level rise, and the most vulnerable populations within them are at the highest risk, especially those in informal settlements. In addition to the direct impacts of extreme climate events, cities are often the destination for people displaced by the adverse effects of climate breakdown in rural and coastal areas – up to 2,000 people a day migrate to Dhaka. It is the people least responsible for global heating that experience its most devastating consequences.
COP27 took an important step towards achieving climate justice by establishing a loss and damage fund in which the countries most responsible for the climate crisis agreed, in principle, to compensate the countries experiencing the worst impacts. However, there was no real increase in funding for adaptation. The world’s richest countries have not yet paid the full US$100 billion a year in climate finance promised to the Global South by 2020. Even if fully paid, this amount would not be nearly enough to cover the costs of adaptation in the worst affected countries – the United Nations Environment Programme estimates that the costs of adaptation alone will be between US$160-$340 billion per year by 2030.
There is evidence to suggest that, while some national governments are failing to deliver on their climate finance commitments, support for those facing the worst of the crisis is often received as remittances from diaspora communities in the Global North – which are usually among the poorest communities in those countries.
Official finance for adaptation must be rapidly scaled up, and much more of it directed to cities. Only 9% of global urban climate investment is currently dedicated to adaptation projects, despite cities being on the frontline of the climate crisis. The overwhelming majority of climate finance for cities is directed at mitigation projects – in the Global South, almost none of city climate programme funds are for adaptation. Finance under the current system is designed to get poor countries that have relatively low emissions to reduce their emissions further rather than also adapting to the impacts that they are already facing. The sad reality is that unless many less wealthy cities quickly secure funding to adapt, they will start to lose the capacity to decarbonise.
The strongest tool that city governments have to attract more climate finance is to implement tough, climate and nature-friendly policies and regulations. In October last year, C40 announced record investment in climate finance for cities in the Global South – 34 city projects, supported by the Cities Finance Facility, will be granted access to over $1 billion for climate projects.
These include Salvador, which is using nature-based solutions and hybrid infrastructure measures to increase the resilience of two informal, low-income communities that are vulnerable to flooding and landslides. Another is Drakenstein, which is taking a systems approach to flood management to improve water and flood challenges in nearby Cape Town. By increasing flood resilience and the health of the river, the project will benefit people living alongside it, especially in informal or low-income areas.
Other cities are using innovative ways to finance adaptation projects, such as Freetown, which has developed a system to implement its tree-planting initiative by tokenising planted trees and trading them digitally with companies and individuals. The project was chosen as the winner of the C40 Cities Bloomberg Philanthropies Awards under the ‘United to Innovate’ category.
Despite the progress made at the city level, the scale of the crisis demands greater action from international institutions. Globally, there are calls from high-profile figures to reform multilateral lenders and align their spending with climate goals. The prime minister of Barbados, Mia Mottley, is spearheading the movement to overhaul the global financial system to better support the countries most vulnerable to the climate crisis. At the beginning of this year, it emerged that the World Bank had drafted a roadmap to broaden its mission and include sustainability goals, following a proposal for fundamental reform of the institution from ten major economies, including Germany and the US. This represents a shift in the right direction, although there is an urgent need for dedicated finance mechanisms to support climate action in cities.
Whatever this year brings, let’s make sure that we make finance for urban adaptation a global priority.