Climate Investment Opportunities in Cities : An IFC Analysis

Abstract

This Climate Change’s reports, cities’ abilities to address climate change is critical to limiting global warming to 1.5 degrees Celsius. There is no doubt that the magnitude of investment required to fulfill growing commitment of cities to climate action far exceed public budgets. Clearly there will always be a need for public investment in green, resilient infrastructure and services. But much more attention now needs to be put on enacting the right reforms to leverage private sector innovation, management know-how, and capital. As municipal governments create space for private companies to invest in reducing emissions and building resilience, there is also growing interest from the private sector to invest in climate smart infrastructure and services. This important report a cumulative climate investment opportunity of 29. 4 trillion dollars in six urban sectorsin emerging markets cities by 2030. The bulk of these opportunities — 24.7 trillion dollars— rests with green buildings, which covers both new construction and retrofits. But therealso are trillion-dollar opportunities in public transport infrastructure, electric vehicles, improved management of water resources, renewable energy, and better handling of waste. The report also describes various approaches and new and innovative models that cities can deploy to narrow the financing gap for climate-smart investments, including Public- Private Partnerships, land value capture mechanisms, and green bonds.