Sustainable Urban Development
Today, 55% of the world’s population lives in urban areas, a proportion that is expected to increase to 68% by 2050. Climate change, as a global challenge, poses serious threats to cities with increased extreme weather events, such as heatwaves, urban heat island effects, or flooding. In order to live in cities where citizens can breathe fresh air, access clean energy and drinkable water and use sustainable transport, State and Non State Actors need to significantly bend the curve of global greenhouse gases emissions and increase the climate resilience of urban areas and inhabitants.
Cities are in a crucial position to act, as urban activities contribute to 70% of global GHG emissions. They also have the duty to protect their citizens from the adverse impacts of climate change that can be already felt in many parts of the world, especially in developing and emerging economies. Cities are an effective scale on which to translate the collective climate ambition outlined in the Paris Agreement into concrete policies and investments that will move the world towards a low-carbon and climate-resilient future.
City leaders face a complex paradigm: they are expected to make significant investments for sustainable urban development but have limited access to the necessary financial resources. This is particularly true for cities in developing and emerging countries. Remaining on a trajectory that limits warming to 1.5°C will require huge investments in sustainable urban infrastructure: USD 4.5 to 5.4 trillion per annum over the next 15 years3 are needed to tackle the urban low-carbon and climate-resilient challenge.
Development finance institutions (DFIs) have a key role to play to support models of low-carbon and climate-resilient urban development that integrate all facets of sustainable development, by providing direct city lending, specialized instruments, and/or catalytic mechanisms for leveraging public and private funds. Inspired among others by the 5 voluntary Principles for Mainstreaming Climate Action in Financial Institutions, DFIs are increasingly committed to fully integrate climate change into their activities, in order to ensure that their investments in urban areas are aligned with the transitions needed to realize the ambition of the Paris Agreement.
With USD 196 billion mobilized for climate finance in 2017, IDFC represents a key part of the sustainable urban development landscape.
At the 1st One Planet Summit , IDFC members committed to align their financial flows with the Paris Agreement, including by further embedding climate change into their activities, supporting the implementation of national contributions and the preparation of long term decarbonized trajectories by 2050, promoting the reduction of GHG emissions, via more explicit policies to significantly reduce reliance on fossil fuels and speeding up financing for renewables.
On 13th September 2018, on the margin of the Global Climate Action Summit (GCAS) in San Francisco, IDFC and C40 Cities announced their joint commitment to support cities low-carbon and climate-resilient development
Ms. Anne Hidalgo, Mayor of Paris and Chair of C40 Cities, and Mr. Rémy Rioux, IDFC Chairperson and CEO of Agence Française de Développement (AFD), stated that C40 Cities and IDFC were committed through a joint declaration to work together in supporting cities on the following 4 priorities:
Reinforcing financial and technical capacity within municipalities to access finance and implement low-carbon and climate-resilient strategies and projects, by building on the financial knowledge contained in the IDFC member institutions and the C40 Cities Finance Facility.
- Developing and supporting the implementation of low-carbon and climate-resilient urban plans by sharing best practices for climate action plan design and ensuring a wider spread of existing tools in areas such as sustainable infrastructure, renewable energy, energy efficiency, clean transport, and sustainable urban planning.
- Increasing access to finance for climate investments, by leveraging public and private funds dedicated to low-carbon and climate-resilient projects; developing approaches and tools, including in collaboration with the C40 Cities Finance Facility, to significantly increase the number of finance-ready sustainable infrastructure projects in cities.
- Encouraging national governments to accelerate their commitments to support climate policies implemented by their local authorities, including their planning and investment in low-carbon and climate-resilient urban infrastructure.