PARIS, December 4, 2015 — The World Bank supports the ‘The State of City Climate Finance' report launched today by UN Secretary-General Ban Ki-moon and international partners at the Climate Summit for Local Leaders at Paris City Hall, taking place on the margins of the UN Climate Conference in Paris.
“Today our cities account for about 80 percent of GDP generated worldwide. But our cities are under strain…and the strain will only increase,” said Rachel Kyte, World Bank Vice President for Climate Change. “In just 30 years from now, the number of people living in cities will increase by 1.5 times to 6 billion, adding 2 billion more urban residents. With those bulging cities comes increased demand for services and finance.”
Kyte added, “It means we have a once-in-a-lifetime opportunity to build livable, resilient, low-carbon cities. We must seize the opportunity. Too many cities today are facing a critical shortage in tapping into the finance they need.”
The report says most cities do not yet generate sufficient fiscal resources or have difficulty in accessing financial markets, blocking critical investments necessary to put them on a sustainable, resilient lower carbon path. In fact, World Bank research shows that only 20 percent of the world’s largest cities have the basic analytics necessary for low carbon planning, and only 4 percent of the 500 largest cities are creditworthy in international markets.
The report notes that about US$4.1 to $4.3 trillion will be needed to be spent on urban infrastructure every year just to keep up with projected growth in a “business-as-usual” scenario, and an estimated incremental 9-27 percent (US$0.4-$1.1 trillion) more capital investment that will be necessary to make this urban infrastructure low-emission and climate-resilient.
According to Ede Ijjasz-Vasquez, Senior Director for the World Bank’s Social, Urban, Rural and Resilience Global Practice, “Many countries are looking at their cities as engines for advancing national growth. The World Bank is working hard to support this growth and to find ways to bridge the gap in urban climate finance. Last year the World Bank provided over US$3 billion in urban climate finance and technical assistance to help our clients build climate smart cities.”
The report highlights city creditworthiness is a major challenge. In response to this need, the World Bank Group has been running “credit worthiness academies” – training over 500 city officials from more than 180 cities to improve their financial management practices to boost their chances of access to private capital.
The World Bank is also helping governments think through the fiscal transfer policy reforms needed to support additional climate-smart investments.
“We think it’s possible to do more,” said Ijjasz-Vasquez. “We applaud the CCFLA for this first-of-its-kind report, and look forward to working with other CCFLA members to overcome these challenges, improving peoples’ lives and protecting their future.”
The ‘State of the City Climate Finance’ report can be found here.