By Mafalda Duarte, Chief Executive Officer of the Climate Investment Funds
The C40 World Mayors Summit marks a pivotal moment for decision-makers to come together in common cause and confront the enormous challenges facing our cities and our world.
As the CEO of the Climate Investment Funds (CIF), one of the world’s largest multilateral funds scaling climate solutions in the developing world, the message to mayors and leaders everywhere is simple. Funnelling investment into cities across low- and middle-income nations will be crucial to tackling the climate crisis.
Cities contribute significantly to the climate crisis. They produce 60% of global greenhouse gas emissions and consume 78% of the world’s energy. By the end of this century, about 85% of the world’s population will be in urban centres, according to the OECD.
Yet cities are also some of the biggest victims of climate change. Their concrete-heavy infrastructure worsens heatwaves and heavy rains. Their proximity to the sea and large bodies of water—historically an advantage—will result in more disastrous effects from rising tides. “No matter how much the world warms,” a 2021 Bloomberg report warns, “cities will have it worse.”
Cities in developing nations face enormous risks, with billions of people living in crowded quarters, and local governments lacking the resources and funds to adapt to, and mitigate the effects of, the climate crisis. We have already seen devastating impacts in megacities like Mumbai and Lagos, and the risk will only grow. Urbanisation in middle- and low-income nations has increased by 50% since 2010, and will continue to rise.
Developing nations are on track to run on 70% of the world’s energy supply by 2040, experience 97% of global population growth between 2013 and 2030, and represent 60% of total GDP by 2030. They are also home to rapidly growing, small-to-medium-sized cities that will be the megacities of tomorrow, which are the ones most vulnerable to climate change. Yet these same cities also hold the key to unlocking meaningful climate progress worldwide.
© Mayowa Koleosho / EyeEm
The OECD estimates we must invest $90 trillion by 2030 in sustainable urban infrastructure, including energy, transport, water and other assets. Two-thirds of this investment must take place in middle- and low-income nations.
As cities continue to deal with the fallout from a three-year pandemic and global instability, it may be tempting for mayors and leaders to return to “normal”. But propping up legacy sources of energy and traditional ways of doing business will only ease pressures in the very short term.
That cannot be our path forward. Urban development has the chance to catalyse a once-in-a-lifetime transition. This transition can tackle the existential threat of climate change by building climate-smart cities, driving an equitable recovery from the pandemic, and moving us away from monoculture and all-time-high commodity prices driven by global instability and the war in Ukraine.
If we do this right, we can ensure the megacities of tomorrow—and in turn developing nations—avoid high-carbon infrastructure and technology. But we only have one shot to get it right, and the moment must be now.
So how do we get there? At CIF, we’ve learned a few things from over ten years of experience financing climate solutions in the developing world. Firstly, the path must begin with access to sustainable and innovative finance. This involves helping small- and medium-sized cities attract capital, despite historic inaccess to credit or other forms of income. But the challenge isn’t funding alone. The limited governance, technical, and institutional capacities of some municipal governments also slows down investment in climate-smart infrastructure.
We need holistic interventions that provide a comprehensive support package, from diagnostics to planning to financing, and custom plans based on a city’s unique strengths and needs. In Beira, Mozambique, that meant an upgraded stormwater drainage system, resulting in a 70% reduction in flood risks, as well as 7,000 new trees, a botanical garden, rehabilitated mangrove areas and recreational infrastructure. These initiatives have increased resilience to extreme weather events in Beira, while also improving quality of life.
In Bangladesh, we’ve worked with cities to build cyclone shelters, emergency access roads, bridges, and water supply and sanitation systems. Collectively, this has made vital infrastructure more resilient and also helped support nearby coastal towns.
That is the kind of work we have learned from at CIF—and it’s the driving force behind a new investment platform we’re developing to accelerate climate-smart urban development in emerging economies.
Ultimately, climate-smart infrastructure is one of the best investments that any city can make. These projects stimulate local economies, kickstart new markets, and serve as catalysts to encourage private sector finance.
They are a crucial piece for any city looking to emerge from our crises stronger and more resilient. And in the case of tomorrow’s megacities—ones poised to skyrocket in population, energy use, and GDP—climate-safe infrastructure is crucial to help us achieve the goals of the Paris Agreement and save our future.
All of us—mayors, elected officials, business leaders, philanthropists and residents of urban areas worldwide—have a role to play in building the equitable and sustainable cities of the future. There is no time to waste.