Cities Seek US$1 Trillion for Low-Carbon Construction
Women at the C40 Financing Sustainable Cities Forum, from left: Naoko Ishii, CEO and chairperson of the Global Environment Facility; Sue Tindal, chief financial officer at Auckland Council; Val Smith, director, Corporate Sustainability at Citi; Shirley Rodrigues, Deputy Mayor of London for Environment and Energy.
By Sunny Lewis
LONDON, UK, April 12, 2017 (Maximpact.com News) – The world’s largest cities are not sitting around waiting for national governments to hand them a climate-safe future. They are taking the initiative to build their own low-carbon opportunities.
To address climate change arising from urban development, there are over 3,000 low-carbon infrastructure projects in the planning stages across a network of 90 of the world’s megacities known as C40 Cities .
Cities have reported costs for just 15 percent of these projects, but even this small percentage amounts to US$15.5 billion in required investment.
There are 90 megacities in the C40 Cities network. They include: Durban, Nairobi, Lagos, and Addis Ababa in Africa; Delhi, Hong Kong, Bangkok, and Tokyo, in Asia; Auckland, New Zealand in Oceana; Amman, Jordan in the Middle East; Copenhagen, Paris, Rome, London, Berlin, Athens and Amsterdam in Europe; Bogota, Rio de Janeiro, Sao Paulo, and Buenos Aires in South America; and in North America, Houston, New York, San Francisco, Washington, DC, and Vancouver.
Roughly one in every 12 people in the world lives in a C40 city, and these 90 cities generate about one-quarter of the world’s wealth, as expressed by GDP, or Gross Domestic Product.
These numbers highlight an enormous opportunity for collaboration between cities and the private sector to invest in sustainable projects, and also the need to accelerate investment and development in sustainable infrastructure to deliver a climate-safe future.
Rachel Kyte, chief executive, Sustainable Energy for All, an initiative of the United Nations Secretary-General, has said, “Buildings account for one-third of global energy use and with cities growing rapidly, there’s an urgent need for partnerships that help cities and citizens use energy better.”
Recent C40 research, contained in the report “Deadline 2020,” estimates that C40 cities need to spend US$375 billion over the next four years on low carbon infrastructure in order to be on the right track to meet the ambition of the Paris Agreement on Climate that took effect in November 2016.
Under this agreement, world governments pledged to keep Earth’s temperature increase to less than two degrees Celsius above pre-industrial levels.
“Deadline 2020” estimates before 2050, C40 cities will need to invest over US$1 trillion on new climate action and in renewing and expanding infrastructure to get on the trajectory required to meet the goal of the Paris Agreement.
But how are the megacities to attract this mega-investment?
On April 4, the C40 Financing Sustainable Cities Forum gathered over 200 delegates from cities, investors, national governments, academics, private sector experts, civil society groups and technology providers to identify the key barriers in financing sustainable urban infrastructure.
The Forum was hosted in London by the C40 Cities Climate Leadership Group and the Greater London Authority, with the support of the Citi Foundation and World Resources Institute’s Ross Center for Sustainable Cities.
“City action can deliver 40 percent of the Paris goal,” Mark Watts, executive director, C40 Cities, said at the Forum.
Participants looked at unlocking finance for low-carbon investments in cities. They agreed that cities must improve project development information in order to accelerate climate action, a conclusion articulated in a new report, “The Low Carbon Investment Landscape in C40 Cities.“
They recognized that accessing and attracting finance are some of the biggest barriers that mayors face in delivering their climate change plans, especially in developing countries and emerging economies with a lack of expertise in securing investment.
To help solve this problem, the C40 Cities Finance Facility was launched during COP21, the 2015 United Nations Climate Change Conference in Paris, where the Paris Agreement on Climate was approved by world governments.
The C40 Cities Finance Facility will provide US$20 million of support by 2020 to help unlock and access up to US$1 billion of additional capital funding, by providing the connections, advice and legal and financial support to enable C40 cities in developing and emerging countries to develop more financeable projects.
“For developing markets, public-private partnerships are key to getting sustainable projects off the ground,” said Val Smith, director, Corporate Sustainability at Citi.
But the financial industry tells C40 Cities that they are experiencing a lack of corporate understanding of the low carbon technology being deployed.
They lack understanding of the financing models cities use to fund low carbon infrastructure and, in addition, financiers are seeing inadequate capacity within city governments to form partnerships and collaborate on sustainable infrastructure projects.
CDP’s Matchmaker program aims to overcome these challenges by engaging cities early in the project development process and standardizing how these projects are disseminated to the market.
CDP, formerly the Carbon Disclosure Project, is a not-for-profit that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts.
Since the Paris Agreement was adopted in 2015, CDP says they have seen a 70 percent increase in cities disclosing their carbon emissions.
CDP says this year’s disclosures reveal that many cities are actively looking to partner with the private sector on climate change. Cities highlighted a total 720 climate change-related projects, worth a combined US$26 billion, that they want to work with business on.
Matchmaker will publicize these low-carbon infrastructure projects to CDP’s growing number of investor signatories that currently represent over US$100 trillion in assets.
And these are by no means all of the opportunities for sustainable investment in urban low-carbon construction.
On April 4, at a meeting of the Sustainable Energy for All Forum in New York City April 3, five new cities and districts committed to improve their buildings by adopting new policies, demonstration projects and tracking progress against their goals.
They joined the Building Efficiency Accelerator (BEA), a public-private collaboration that now includes over 35 global organizations and 28 cities in 18 countries.
The cities and districts joining the BEA are Kisii County, Kenya; Merida, Mexico; Nairobi City County, Kenya; Pasig City, Philippines; and Ulaanbaatar, Mongolia.
World Resources Institute (WRI) leads the BEA, convening businesses, nonprofits and multilateral development organizations to support local governments in implementing policies and programs that make their buildings more efficient.
Jennifer Layke, global director, Energy Program, World Resources Institute, encapsulated the push for sustainable construction, saying, “People want schools, homes, and offices that are healthy and comfortable without the burden of high energy costs due to inefficiency. Prioritizing efficiency in buildings can save money and reduce pollution. Our new Building Efficiency Accelerator partners are signaling their intent to avoid the lock-in of decades of inefficient development.“
Supporting these new members are ICLEI – Local Governments for Sustainability, the India Green Building Council, the Kenya Green Building Society, Pasig and WRI Mexico.
“We must transform our urban systems to meet the challenges of sustainability and climate,” said Naoko Ishii, CEO and Chairperson of the Global Environment Facility, a funding organization. “Through this partnership, we can provide awareness raising, policy advice and technology transfer directly to sub-national governments ready to take action.”
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Featured Image: Duke Energy Center in Charlotte, North Carolina is a LEED Certified Platinum building, the highest sustainability rating awarded by the U.S. Green Building Council. (Photo by U.S. Green Building Council) Posted for media use
