Banking on a just and green recovery: Lessons from 9 cities
- PUBLICATION DATE July 2022
- Authors Aris Moro (CFF) Mehrnaz Ghojeh (CFF) Valerie Brown (CFF) WSP Team C40 Finance Advisory Group
To make the green and just transition a reality, cities urgently need more urban climate finance. Recent research shows a significant gap between the amount of finance cities receive and the amount they need to meet the climate emergency. To address this challenge, cities are finding innovative ways to finance and implement projects with a focus on inclusion, equity, and a green and just recovery. This report therefore provides nine diverse case studies of cities which are leading the way, with the aim of sharing actionable lessons for city officials and other stakeholders about how to access finance.
List of case studies:
- Freetown, Sierra Leone - Engaged citizens and international finance to restore nature and increase the city’s resilience.
- Addis Ababa, Ethiopia - Committed to equitable Transport Oriented Development (TOD) to win investment for low-emission urban light rail.
- Athens, Greece - Developed a natural capital financing facility to develop urban forests for low-income communities.
- Cape Town, South Africa - Launched a municipal green bond to fund city climate and water infrastructure.
- Bandar Lampung, Indonesia - Developed a Public-Private Partnership to fund modern water access for citizens and increase the city’s climate resilience.
- Bogotá, Colombia - Financed an inclusive public-bike-sharing networks through public and private sector collaboration.
- Melbourne, Australia - Leveraged funding for COVID-19 response to develop climate-friendly, socially distanced bicycle infrastructure.
- Seoul, South Korea - Decarbonised public and private sector buildings through green standards and regulations, boosting the local green economy.
- Hong Kong, China and Los Angeles, USA - Deployed green employment and jobs schemes to support a just recovery from the COVID-19 pandemic
The report also outlines four common lessons that would help cities overcome barriers to climate finance:
- Cities need greater fiscal autonomy and budgetary space, as well as updated national legal frameworks to support finance access. National governments should give cities budgetary autonomy to take advantage of emerging finance opportunities. Updated national legal frameworks should also support cities’ access to emerging finance routes. During the pandemic, Melbourne took advantage of national, regional and city funding opportunities to integrate climate action into the response to the pandemic and subsequent recovery efforts to develop and implement cycling infrastructure.
- Cities need technical support to create investment-ready projects. Stakeholders should support city financial and technical skills and capacity with each new project, which will increase investor confidence in cities. With limited municipal staff, Freetown City Council integrated community participation and voluntary technical expertise into their tree planting initiative.
- Cities need standardised processes and ways to bundle projects to achieve economies of scale. Projects will be easier to scale and more attractive for investment if they are aggregated both from city-led and investor-led perspectives.
- Cities need direct access to private and multilateral finance. Key stakeholders, including the finance and investment sector, should engage directly with cities, and view city climate infrastructure as a central target for the growing field of climate finance.