The role of multilateral climate funds in urban transitions between 1994 and 2014

ABSTRACT

The developing world is currently undergoing fast urbanization, and urban infrastructure systems built today are likely to influence global greenhouse gas emissions and energy consumption patterns for decades to come. This study draws on the analysis of 1994–2014 climate finance investments by five major multilateral climate funds that have a record of directly supporting urban climate mitigation and adaptation actions in cities across developing countries. The analysis indicates that the administered funds provided very limited support to urban climate finance across the developing world. In middle-income countries mitigation projects within transport sector dominated both urban multilateral climate finance and co-finance. Cities in low-income countries attracted non-considerable amounts of urban climate finance, most of which were supporting urban adaptation efforts. The study concludes by outlining that multilateral climate funds should give higher priority to urban climate finance on their investment portfolios with a particular emphasis on rapidly urbanizing cities in low-income countries.

KEYWORDS:

• Cities
• climate change
• climate finance
• developing countries
• urban infrastructure

Acknowledgments

The authors would like to thank Sam Barnard, Department of Urban Studies and Planning at the Massachusetts Institute of Technology, whose previous work ‘Climate finance for cities: how can climate funds best support low-carbon and climate resilient urban development?’ at the Overseas Development Institute lead to the interest in this topic. Also, the authors owe gratitude to Saliha Dobardzic and Xiaomei Tan from the Global Environmental Facility as well as Zhihong Zhang and Joonkyung Seong from the World Bank Group for providing valuable insights and information about the five funds examined in this research. Further thanks go to authors’ former colleagues at KTH Royal Institute of Technology for providing comments and ideas in the early stages of research.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Amar Causevic http://orcid.org/0000-0003-4630-1717

Sujeetha Selvakkumaran http://orcid.org/0000-0002-0237-7886

Notes

1 Searching for projects based urban low-carbon and climate resilient technology enabled identification of projects such as Bus Rapid Transit and Pedestrian Improvements in Jakarta and Krakow Energy Efficiency Project. Even though these are strictly urban climate finance projects, they could not be identified in the first screening because search terms in the first step did not appear in their title and/or project description.

2 The World Bank divides developing countries into four income groups: low-income (e.g. South Sudan), lower-middle income (e.g. Bangladesh), upper-middle-income (e.g. Mexico) and high-income (e.g. Barbados). 

3 Projects with the thematic orientation such as efficient public lightning, energy conservation in different types of urban infrastructure, promoting the application of renewable energy technologies in urban context, etc.

4 Projects with a thematic orientation such as integrated approaches for urban zero emission infrastructure development, application of renewable energy technologies in low-carbon cities, urban planning for eco-cities, etc.

5 Projects with a thematic orientation such as building flood resilient infrastructure, climate proofing for cities, urban climate change adaptation infrastructure upgrades, etc.

6 Projects with a thematic orientation such disaster risk management and reducing urban vulnerability to climate change.

7 Encompassing mitigation sectors (i.e. waste, district heating, other urban mitigation infrastructure and urban mitigation land use) and adaptation sectors (other urban adaptation infrastructure and urban adaptation land use).

8 Encompassing mitigation sectors (i.e. waste, district heating and urban mitigation land use) and adaptation sectors (other urban adaptation infrastructure and urban adaptation land use).