“We have no time to lose,” said United Nations Secretary-General Ban Ki-moon, in introducing the State of City Climate Finance report at a high-level launch event in Paris City Hall on 4 December 2015. “I hope that, as of today, the world takes on the recommendations of this report. Looking forward, I count on the Cities Climate Finance Leadership Alliance to help translate these recommendations into reality to mobilize the climate financing cities so urgently need.”
The launch event, convened by the CCFLA and moderated by Lord Nicholas Stern, was held during the Climate Summit for Local Leaders, which brought together hundreds of mayors and regional leaders at the invitation of Paris Mayor Anne Hidalgo and Michael R. Bloomberg, the UN Secretary-General’s Special Envoy for Cities and Climate Change.
The key recommendations of the State of City Climate Finance report were presented by Jeremy Oppenheim of McKinsey & Company, which provided research and analysis to inform the report. First, the report suggests that national governments adopt policies and incentives that encourage cities to invest in low-emission and climate-resilient infrastructure. Second, it urges cities to adopt frameworks that put a price on carbon, such as cap-and-trade mechanisms or traffic congestion charges. Third, it recommends strengthening banks and institutions that will support cities in developing investment-worthy climate-related projects. Fourth, it suggests that international development finance be directed through local financial institutions, which are well positioned to help cities finance climate-smart infrastructure solutions. And finally, the report calls for creating an innovation network of labs for new financial instruments and funding models.
Other speakers from CCFLA members organisations included: Rio Mayor Eduardo Paes, Chairman of the C40; Jacques Moineville, Deputy CEO of the Agence Française de Développement (AFD) and Graeme Sweeney, Board Chairman of the Children’s Investment Fund Foundation (CIFF);
Luciano Galvao Coutinho, President of the Brazilian Development Bank (BNDES); Mayor Parks Tao of Johannesburg; and Mayor Erdenin Bat Uul of Ulaanbaatar, Mongolia — commented on how the report’s recommendations, if put into action, would make a difference in unlocking investment in climate-smart infrastructure in cities. Acknowledgements were given to AFD and CIFF for providing financial support to fund the research, analysis and production of the report.
At a press conference earlier in the day at COP-21, Rachel Kyte, Vice President of the World Bank, explained the context of why the issue of mobilizing investment for climate-smart infrastructure in cities is so crucial: Urban areas account for over 70 per cent of energy-related CO2 emissions, and the world’s cities produce almost half of all global greenhouse gas emissions.
Yet cities, especially in developing countries, face major obstacles in obtaining the large-scale finance they need for climate action. Of the 500 largest cities in emerging economies, only 4 per cent are deemed creditworthy in international markets, Ms. Kyte pointed out. She also noted that the World Bank, like many development banks, is not permitted, by mandate, to lend directly to cities – a policy that could be considered for change.
Members of the City Climate Finance Leadership Alliance — from public and private banks, national and local governments and civil society organizations — are working on a plan to help translate the report recommendations into action. As the UN Secretary-General said, “This report is a launch pad for new, innovative financing to deliver true transformation in how our cities are planned and built.”
H.E. Ban Ki Moon, United Nations Secretary-General
Lord Nicholas Stern, Grantham Research Institute on Climate Change and the Environment
Ms. Rachel Kyte, Vice President and Special Envoy, Climate Change Group, World Bank
Mr. Erdenin Bat Uul, Mayor of Ulaanbaatar, Mongolia
Mr. Jacques Moineville, Deputy Chief Executive Officer of the Agence Française de Développement (AFD)
Mr. Mayor Eduardo Paes, Mayor Rio de Janeiro
Mr. Luciano Galvao Coutinho, President of the Brazilian Development Bank (BNDES)
Mr. Graeme Sweeney, Board Chairman of the Children’s Investment Fund Foundation (CIFF)
Mr. Jeremy Oppenheim, Director McKinsey and Company
Mr. Andrew Steer, President and Chief Executive Officer of the World Resource Institute (WRI)
Mr. Mpho Franklyn Parks Tao, Mayor of Johannesburg, South Africa;