• Client:  World Bank (WB)
  • Implementation period: January, 2013 - December, 2013 (Completed)
  • Geographic coverage: Global

How can climate finance be mobilised to support climate mitigation actions in cities all around the world?

Cities are demonstrating leadership on climate change action and an increasing number are adopting voluntary mitigation targets, implementing city-level inventories to monitor compliance. This project provided support to the Carbon Finance Unit of the World Bank in terms of knowledge building and creation by exploring ways to mobilise climate finance to support (mega-)cities in their climate mitigation efforts.

Therefore, the project produced a cycle of briefing papers for World Bank officials and other relevant (donor) stakeholders around potential climate finance modalities and definitions at a city-level. The overall conclusion from the briefing papers is that climate finance, either through dedicated climate funds or provided through carbon markets, has had a low impact on city-level mitigation action so far.

Among the main difficulties for cities to access carbon finance are:

  1. Mitigation action by local governments depends on the conditions set by the national government;
  2. Climate finance from climate funds is often internalized by national agencies, which tend to underestimate the climate mitigation potential at city level;
  3. Local authorities in developing countries lack the organisation and capacity to lobby for a share of the available climate funds;
  4. Climate market instruments design does not incorporate important drivers for action at city level such as health, economic development and environmental aspects;
  5. Climate mitigation is no common practice in city policies;
  6. Cities lack awareness of their mitigation options;
  7. Financial, technical, political and institutional issues represent strong obstacles that prevent cities to benefit fully from climate finance.