Banks Should Lend World’s Top 500 Cities At Least $1bn to Tackle Climate Change – NCE-2015 Report
by David Thorpe
Multilateral development banks, donors and others should lend the world’s top 500 cities at least US$1 billion to help them implement low carbon urban development strategies by 2020, according to the New Climate Economy 2015 report.
This report, published today by the Global Commission on the Economy and Climate, puts action by cities to tackle climate change at number one of 10 priority options which together, if implemented fully, could save up to 96% of all the carbon emission reductions required to keep global warming within 2°C by 2030.
The Global Commission on the Economy and Climate
The Global Commission was commissioned in 2013 by the governments of seven countries: Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom. The Commission has operated as an independent body and has been given full freedom to reach its own conclusions.
Chaired by former President of Mexico Felipe Calderón, the Commission comprises former heads of government and finance ministers, and leaders in the fields of economics, business and finance, including Sir Nicholas Stern, Ingrid Bonde, Chief Finance Officer and Deputy Chief Executive Officer, Vattenfall AB, Sharon Burrow, General Secretary of the International Trade Union Confederation and Suma Chakrabarti, the president of the European Bank for Reconstruction and Development.
The report’s findings
The report argues that with renewable energy becoming so cheap, had the unique set of political opportunities this year, momentum to tackle climate change successfully is strong.
It identifies 10 key areas of opportunity for stronger climate action which will also bring significant economic benefits and together could achieve at least 59% and perhaps as much as 96%, if all the options were taken up, of the emissions reductions needed by 2030 to keep global warming below 2°C.
The 10 areas cover three key economic systems:
Cities, land use and energy;
Resource efficiency, infrastructure investment and innovation, with action by businesses and investors;
Reducing admissions from international aviation and shipping and phasing down hydrofluorocarbons.
It argues that cities, if they implement all 10 recommendations, will be responsible for 3.7 Gt CO2e emissions per year in 2030.
Its first recommendation is that the world’s cities should accelerate low carbon development.
It says they should all commit to developing and implementing low carbon urban development strategies by 2020, using the framework of the Compact of Mayors. This would let them prioritise policies and investments in public, non-motorised and low emission transport, building efficiency, renewable energy and efficient waste management.
It reiterates the mantras, familiar to readers of this website, that compact, connected and efficient cities can generate stronger growth and job creation, alleviate poverty and reduce investment costs, as well as improving quality of life through lower air pollution and traffic congestion.
Better, more resilient models of urban development are particularly critical for rapidly urbanizing cities in the developing world.
International city networks, such as the C40 Cities Climate Leadership Group, ICLEI (Local Governments for Sustainability) and United Cities and Local Governments (UCLG), are scaling up the sharing of best practices and developing initiatives to facilitate new flows of finance, enabling more ambitious action on climate change.
It argues that to facilitate this it is urgently necessary for multilateral development banks, donors and others to develop an integrated package of at least US$1 billion for technical assistance, capacity building and finance to support commitments by the world’s largest 500 cities.
If this were done, then, in total, low-carbon urban actions available today could generate a stream of savings up to 2050 with a value in current terms of US$16.6 trillion, and could reduce annual GHG emissions by 3.7 Gt CO2e in 2030.
In addition, with $1 trillion a year invested in clean energy and energy efficiency being raised to the global best, further savings and job creation can be achieved:
Scaling up clean energy financing to at least US$1 trillion a year could reduce annual GHG emissions by 2030 by 5.5-7.5 Gt CO2e.
Globally, enhanced energy efficiency investments could boost cumulative economic output by US$18 trillion to 2035, increasing growth by 0.25–1.1% per year.
Aligning and gradually raising national efficiency standards could reduce annual GHG emissions in 2030 by 4.5–6.9 Gt CO2e.
It argues that one of the key mechanisms to help him this about would be effective carbon pricing which should be adopted by all developed and emerging economies, together with phasing out fossil fuel subsidies. Businesses are increasingly calling on governments to implement carbon pricing, and over 150 now use an internal carbon price (typically around US$40/t CO2 for oil companies) to guide investment decisions.
National infrastructure policies and the G20 Global Infrastructure Initiative, which also profoundly affect cities, should include climate risk and objectives.
The report notes that around US$90 trillion in infrastructure investment is needed around the world by 2030, mostly in developing countries, to meet their needs.
And to satisfy the requirement that all of this be done with minimal greenhouse gas emissions research, development and demonstration in low carbon technology must be boosted.
Low carbon growth policies should be adopted by all major businesses, with short and long-term emissions reduction targets and corresponding action plans.