Statement from the Cities Climate Finance Leadership Alliance on the COVID-19 Crisis

The COVID-19 pandemic is affecting cities particularly hard: home to the majority of the world’s people and economic activity, cities face a human crisis that also has a significant fiscal and budgetary dimension. Across the world, the pandemic has brought to light the lack of resilience in cities today, and the disproportionate impact crises have on our poorest and most vulnerable citizens. At the same time that cities are spending more on social protection, they are losing substantial revenues from locally generated sources, which can impact essential infrastructure and service provision such as mobility, housing, water, and sanitation. Thus, they are relying more on intergovernmental transfers or making cuts, putting them in a difficult situation when considering long-term fiscal health and recovery.

There is more cause for concern on the horizon, though. The pandemic is a wake-up call that our cities must be better prepared for the climate crisis. As with COVID-19, the negative effects of climate change will lead to catastrophic consequences for cities. However, climate impacts will stay with us over a much longer period of time, with even more devastating impacts, than COVID-19.

It is therefore imperative to address both crises with more determination: we must not allow one crisis to exacerbate another. Instead, the strategy and actions following the immediate economic and social relief to address the fallout from the pandemic should sharply alter the approach to dealing with climate change. Green city actions must be at the heart of recovery efforts. Such actions will create jobs, drive economic growth, build city resilience, and allow the COVID-19 recovery to contribute significantly to abating a future climate crisis. Cities and subnational authorities must be at the forefront of this recovery planning and must be engaged and brought on as critical partners in this process.

The Cities Climate Finance Leadership Alliance (the Alliance) is the multi-level and multi-stakeholder coalition aimed at closing the investment gap for urban subnational climate projects and infrastructure worldwide. In the face of the COVID-19 crisis, the Alliance believes that maintaining a focus on sustainable, inclusive, and resilient urban development has become more important than ever, and we remain committed to our mission to deploy finance for city-level climate action at scale by 2030.

Many of our members are working around the clock with cities to help them get through the current shock – from knowledge sharing and technical support, to emergency rescue packages, to policymaking. The Alliance recognizes that this crisis will cause capacity and priorities to shift, and as such, will be responsive in evolving to meet this challenge to support cities in the context of our mission. The Alliance is committed to working in three areas to support cities towards sustainable, inclusive, and resilient green economic recovery:

1. Increase cooperation among members to facilitate access to investment and job creation: The Alliance is a platform for cooperation through the entire investment value chain, focusing on tangible outputs that members can achieve together. Members are increasing coordination to better help local governments develop sustainable infrastructure investment strategies and incorporate these strategies in national recovery programs. The Alliance hosts the Leadership for Urban Climate Investment (LUCI) initiative, which aims to strengthen the capacity of 2,000 cities in project preparation, creating 1,000 bankable, climate-smart urban projects by 2025. Alliance members are working together to harmonize application processes for project preparation facilities, and to support cities to develop a pipeline of well-structured and bankable projects to ensure these projects are ready for investment. Through the Gap Fund, our members are dedicated to deploying much needed early-stage project preparation funding quickly.

2. Boost best practice sharing among members and cities to speed up a green economic recovery: The Alliance will act as a knowledge sharing mechanism for our members to understand each other’s efforts and best practices to support the recovery. We will conduct regular dialogues, share our learnings, and act quickly to meet the needs of cities and their stakeholders. We are analyzing best practices for financial structuring, developing a searchable, city-facing database of project preparation facilities, and hosting webinars that help members and cities understand different aspects of sustainable investment.

3. Raise awareness of city finance needs and opportunities: Alliance members will work together to maintain momentum towards COP26 in 2021 to ensure that cities’ needs feature prominently. Members are focusing on supporting cities to complete their climate action plans, developing new ways to measure and incorporate local contributions to Nationally Determined Contributions, promoting green jobs initiatives, and supporting green stimulus activities in cities. The Alliance will increase the dialogue on how to prioritize the financing of sustainable infrastructure in cities as a key component of recovery funds, in particular with national governments and capital providers. Members will share how to best design policies and national programs to support city governments to recover, integrating social, economic and climate approaches as priorities and using their national development banks to catalyze additional resources.

The COVID-19 crisis poses a great threat to cities. At the same time, it strengthens the case for green and sustainable action on the local level. While cities will recover from this enormous systemic shock, we need to act now to ensure their long-term resilience and sustainable development paths. For Alliance members, that means catalyzing investment towards a low carbon, climate-resilient urban future.

 

This statement was prepared on behalf of the Alliance Steering Committee and Alliance Members, including:

Steering Committee:

Stéphanie Croguennec, Head of Climate Change and Sustainable Development Unit
French Ministry for Ecological and Inclusive Transition

Andy Deacon, Director of Strategy and Operations
Global Covenant of Mayors

Mafalda Duarte, Head
Climate Investment Funds

Peter Daniel Ellis, Global Lead
World Bank

Samba Karhini-Masengo Guisse, Permanent Consultant to the President of the DRC
Congolese Agency for Ecological Transition and Sustainable Development

Drazen Kucan, Lead Urban and Energy Efficiency Specialist
Green Climate Fund

Gerry Muscat, Head of Division, Urban Development
European Investment Bank

Vera Rodenhoff, Head of Division, International Cooperation on Environment, Energy and Cities, OECD and OECD-Countries
German Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)

Pierre Sarrat, Chief Operating Officer
Sustainable Infrastructure Foundation

Maryke Van Staden, Director of ICLEI’s carbonn Center
ICLEI World Secretariat

Katie Walsh, Head Cities, States and Regions
CDP

Ruben Werchan, Deputy Head of Division Water, Urban Development, Mobility
German Ministry for Economic Cooperation and Development (BMZ)

 

Alliance Secretariat:

Barbara Buchner, Global Managing Director and Head, Secretariat
Climate Policy Initiative, and Cities Climate Finance Leadership Alliance

 

Alliance Members:

Jean-François Habeau, Executive Director
Global Fund for Cities Development (FMDV)

Felicity Spors, Head of International Affairs
EIT Climate-KIC

Louis Downing, Chief Executive Officer
Global Infrastructure Basel (GIB) Foundation

Emilia Saiz, Secretary General
United Cities and Local Governments (UCLG)