The City Climate Finance Gap Fund supports cities with early-stage technical assistance for low carbon and climate resilient projects and urbanization plans.
More than half the world’s population lives in cities. Accounting for more than 70 percent of global CO2 emissions, cities are also where more than two-thirds of the world’s energy is consumed. By 2050, 2.5 billion people are expected to migrate from rural to urban areas. Much of that migration—an estimated 90 percent—will happen in Africa and Asia, where climate change will push tens of millions of people to move. Cities’ rapid and often haphazard growth, especially in developing countries, will drive greenhouse gas emissions and increase residents’ vulnerability to climate change and other shocks, such as heatwaves, flooding and health emergencies.
Clearly, cities are and will continue to be on the frontlines of the global push against climate change.
However, there is a large gap in urban climate finance—estimated in the trillions of dollars, especially in rapidly urbanizing cities in Africa and South Asia. There is an even larger gap in early-stage project preparation finance, estimated at about 3-5 percent of the total project investment costs, going up to 10 percent in emerging and developing country markets. Of the estimated $93 trillion of sustainable infrastructure investments needed globally by 2030, up to $4.5 trillion will be required for project preparation—$300 billion per year.
There is also a capacity and technical gap to developing robust and impactful City Climate Action Plans that can help reach a net zero and resilient world. While a growing number of cities are developing city climate action plans, there are still many that do not have detailed climate mitigation strategies, nor robust preliminary studies such as green-house gas inventories, or climate impact studies to prioritize climate investments. Especially in the global south, cities frequently lack the capacity, finance and support needed for the early stages of project preparation. This typically leads to impasses, and project ideas often fail to progress.
As the world strives to recover from COVID-19, infrastructure investments present a huge opportunity to rebuild our cities and societies for the future in a way that embeds low-carbon and climate-resilient considerations to improve air quality, human health, and sustainability.