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Climate finance for cities: how can climate funds best support low-carbon and climate resilient urban development?

Working paper

Written by Sam Barnard

Working paper

​The way in which cities develop over the coming decades will play a major role in determining the success of climate change mitigation efforts and the degree to which climate change impacts those at risk. Yet most cities in the developing world face severe barriers to planning and financing the infrastructure investments necessary to steer their growth in a climate compatible way. International public climate finance is a fraction of total financial flows, but has the potential to play a pivotal role in helping municipal governments and other urban actors overcome the many barriers they face.

This paper reviews the approaches taken by multilateral climate funds in the period 2010-2014 to support low-emission and climate-resilient development in developing country cities. It identifies US$842 million in approved climate finance for explicitly urban projects, which equates to just over one in every ten dollars spent on climate finance over these five years. The majority of this finance has supported low-carbon urban transport systems in fast-growing middle-income countries. Adaptation funds financed only a handful of explicitly urban projects in the review period.

The report highlights the following implications for future climate fund engagement at the urban level:

  • Climate funds must focus on catalysing action by others.
  • Climate funds need to develop appropriate access arrangements for reaching the most vulnerable urban residents.

  • Mainstreaming climate risks and mitigation into local governance must remain a priority, but is not a solution by itself.

  • Climate funds can expand their impact by supporting urban project preparation.


Sam Barnard