The role of cities in global climate protection – the opportunities and challenges

Cities are responsible for 75% of global CO2 emissions and 80% of global final energy consumption. At the same time, more than half of the world’s population already lives in cities. Urban areas are centres for innovation and economic activity – they generate over 80% of the global gross national product (GDP). These figures alone show that cities and municipalities are main stakeholders in global climate protection.

However, cities also face massive challenges. The report of the Coalition for Urban Transitions, co-financed by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and published in the run-up to the UN Climate Summit, “Climate Emergency – Urban Opportunity: How national governments can secure economic prosperity and avert climate catastrophe by transforming cities” outlines a positive vision of climate-friendly, compact, networked and clean cities and at the same time shows that cities alone – if at all – can only realise around one third of the urban mitigation potential. A further third can only be tapped into through appropriate support from national and regional governments, i.e. through appropriate framework conditions and support programmes for climate mitigation and climate adaptation at the local level. And the last third of the mitigation potential in cities can only be exploited through effective interaction between all levels of government.

Strengthening sub-national stakeholders and collaborative climate protection

During the International Conference on Climate Action (ICCA2019) held by the BMU in Heidelberg in May 2019 the Ministry put the focus on climate action of cities and cooperation across government levels. Another significant result of the ICCA2019 is the  Partnership Declaration on Collaborative Climate Action, through which states, regions and cities commit themselves to more cooperation in the implementation of the Paris Agreement and the 2030 Agenda for Sustainable Development, define action-guiding principles and priority measures and establish a partnership for future mutual support.

IKI priority areas for urban climate funding

In the current IKI thematic selection procedure, one funding priority calls for proposals for large collaborative programmes on the priority topic of sustainable urban development. Under the title “Vertical integration for effective climate action”, programme proposals are aimed at effectively combining local urban planning approaches with climate protection and climate adaptation, and creating the appropriate framework conditions at national level for sustainable urban development. “Sustainable urban development” has been an overarching priority in the funding guidelines of the International Climate Initiative since 2015.

IKI projects

IKI funds mitigation projects e.g. on sustainable urban development in Brazil, Climate Smart Cities in India, capacity building in megacities in sub-Saharan Africa and low emission plans for basic urban services. With regard to urban adaptation, the IKI also provides support on climate-resilient urban planning for authorities in the Philippines and on ICT-based approaches for urban climate resilience in India, Mexico and Peru. The project Climate Policy Meets Urban Development, which is also financed from IKI funds and is implemented by GIZ, supports and advises BMU on strategic international work at the interface of climate policy and urban development.

Together with a coalition of governments, financial institutions, climate funds, city networks and think tanks, the BMU has also developed a holistic instrument that removes existing barriers to cities’ access to finance for climate-friendly urban infrastructure – the framework initiative LUCI (Leadership for Urban Climate Finance). The initiative aims to close existing gaps in the sub-national climate finance architecture and to accelerate and scale the provision of climate funds for cities along the entire investment and infrastructure value chain.

LUCI consists of four interrelated components. The reformed and strengthened Cities Climate Finance Leadership Alliance (CCFLA) is the world’s leading platform for cooperation, coordination and knowledge management in the field of sub-national climate finance. It forms the link between all the LUCI components. The reform and strengthening of the CCFLA was mainly driven by Germany and France. The new Secretariat is now headed by the Climate Policy Institute. Further components are the new Cities Climate Finance Gap Fund (“Gap Fund”) to create a pipeline of bankable, climate-friendly infrastructure projects in cities, and the “FELICITY I” and “FELICITY II” project preparation facilities supported by BMU. The Gap Fund mainly supports cities in developing countries during the risky early phase of infrastructure development, during which concrete projects are defined on the basis of local climate protection plans and examined with regard to their feasibility. The Gap Fund, with a volume of at least €100 million, was developed jointly with the Global Covenant of Mayors city network. It is intended to enable the implementation of sustainable infrastructure projects with a total value of €4 billion. The largest donors are BMU, the Federal Ministry for Economic Cooperation and Development (BMZ) and Luxembourg.