Sustainable Urban Development

More than half of all the people on Earth today live in cities – and by 2050 that fraction will have increased to two-thirds of the global population. This continuing urbanisation trend will mainly take place in conurbations of emerging and developing countries. Existing medium-sized and large cities will grow and new ones will emerge.

We all know cities as centres for culture, economy, jobs and innovation. However, cities are the largest consumers of energy in the world and they also emit the greatest amount of CO2. A climate-friendly future and the limiting of global warming to 1.5°C cannot be achieved without their contribution.

Quito, Ecuador. Foto: Oliver Hölcke

Many cities have already developed plans to reduce their CO2 emissions and prepare for the impacts of the climate change, because hurricanes, drought, flooding and heat waves are increasing in frequency and intensity, causing enormous human suffering and economic damage.

Climate-neutral cities – the challenges and the opportunities

The key role of cities as climate change players was formally recognised for the first time in 2015 at the climate negotiations during the COP 21 in Paris. At the third UN summit on housing and sustainable urban development – the ‘Habitat III’ conference held in Quito in October 2016 – the ‘New Urban Agenda’ anchored global objectives and orientations for sustainable urban development. In SDG 11 – ‘Sustainable Cities and Communities’ – the 2030 Agenda also underscores the important contribution cities are making towards the achievement of the sustainable development goals.

These examples show not only the increasing anchoring of sustainable urban development in international agreements, but also the growing importance of the urban perspective for sustainable development and climate change mitigation.

Although life in cities is not in contradiction to a resource-saving way of life, cities are responsible for about 70% of global, energy-related CO2 emissions (UN Habitat 2011): Infrastructure and construction projects seal off areas and threaten biodiversity. At the same time, cities are being particularly affected by the impacts of climate change such as water shortages, heat stress, rising sea levels, flooding and storms. This is why we must steer the ongoing urbanisation on to sustainable paths. However, we can only succeed here if cities of all sizes are given sufficient support to meet this challenge head-on.

The 2018 Report of the Intergovernmental Panel on the 1.5 degree target shows not only the growing importance of cities as human habitats, but also how much they are being affected by the progressive climate change. In contrast, the summary of this report also shows that cities play a key role in achieving national and international climate change mitigation and biodiversity conservation goals. The Report of the UN Environment Programme (UNEP) together with the International Resource Panel underlines this yet again by showing that urbanisation should not only be seen as a challenge, but also as an opportunity for global sustainability.

The International Climate Initiative (IKI) as a funding instrument for sustainable urban development

The importance of cities for climate change mitigation is also reflected in the funding orientation of the IKI. The topic of ‘sustainable urban development’ has been one of the cross-sectoral funding priorities since 2015. The IKI projects support partner countries and cities in developing strategies for sustainable, climate-friendly and resilient urban development and urban biodiversity, with the focus on integrative and sustainable approaches to the development of urban areas. Capacity building takes place on national and local levels by means of knowledge transfer, technology cooperation, policy advice and investments.

In terms of the measures to combat urban climate change mitigation, the support is focused on the development of local climate action plans, the vertical integration of climate change mitigation strategies and policies, as well as on financing mechanisms for climate change mitigation activities. For example, urban climate change mitigation consultants in nine major African cities advise the city administrations on the drawing up of ambitious climate action plans that support the implementation of national climate change mitigation goals.

Regarding the topic of adaptation to the impacts of climate change, the focus is on strengthening urban resilience. Here the aim is to better prepare cities for the challenges of the climate change and to reduce risks to people and industries.

Urban biodiversity measures focus on integrating ecosystem services into urban development and supporting nature-based solutions. The establishment of biocorridors, for example, is helping to restore water supplies, recreational areas and the regulation of the microclimate in San Jose, Costa Rica, all of which will ultimately improve the well-being of the urban population in the metropolitan region.

How cities can finance their reconstruction programmes

By 2030, more than 65 trillion US dollars will have to be invested in the construction of sustainable urban infrastructure. This equates to 70% of the required investments in sustainable infrastructure worldwide and to almost 20 times Germany’s GDP in 2018 (3,344 billion).
However, when it comes to creating and defining specific projects from ideas and checking their feasibility, cities often fail right at the outset. International support for project development facilities or climate funds was mostly focused on the development of climate plans either before this phase or the further development and financing of projects after it. A global climate fund has since closed this gap, helping cities to overcome their initial problems.

On 22 September 2019, Svenja Schulze, German Federal Minister of the Environment, announced the establishment of the Cities Climate Finance Gap Fund. The Gap Fund makes funds available to cities in developing countries. Experts then help the cities to develop sustainable infrastructure projects until project preparation facilities can subsequently provide support for them. When project development has progressed this far, investors will then be willing to finance the implementation.

The Gap Fund receives more than €100 million in subsidies, enabling the construction of urban infrastructure projects with a total value of €4 billion. Cities can thus make an important contribution to achieving the goals of the Paris Agreement and the 2030 Agenda for Sustainable Development.

The Gap Fund is part of the Leadership for Urban Climate Investment (LUCI) framework initiative, which is aimed at improving sub-national stakeholders’ access to international climate finance. The fund also cooperates closely with the Cities Climate Finance Leadership Alliance (CCFLA), the leading platform for international cooperation and knowledge sharing in the field of sub-national climate finance.