Climate Change, Urbanization Perry World House at COP25: How to Build Climate-Resilient Urban Infrastructure...and How to Pay for It

After a last-minute change of venue and continent—Chile had been slated to host—government officials, multinational leaders, diplomats, scholars, and scientists descended on Madrid, Spain, for the 25th United Nations Climate Change Conference of the Parties (COP25) earlier this month. Over two weeks, they analyzed the crises posed by climate change and sought solutions to them.

Of all the challenges discussed, many attendees at the conference took a particular interest in mainstreaming climate-resilient urban infrastructure finance—a means of giving cities the resources to build infrastructure that can withstand a changing climate. Alongside many members of the Penn community, including several representatives from Perry World House, I underscored the need for equity, inclusivity, and capacity-building in this process. If cities get the necessary support, they can play a crucial role in achieving countries’ Nationally Determined Contributions (NDCs)—the country-level climate actions pledged in the Paris Agreement at COP21.

As part of the effort to promote this concept, Mauricio Rodas, a former mayor of Quito, Ecuador, and a visiting fellow at Perry World House and the Institute for Urban Research (PennIUR), presented the City Climate-Resilient Infrastructure Financing Initiative (C2IFI). In a presentation on Monday, December 9, Rodas explained how C2IFI will build a partnership among those sitting at the intersections of climate resilience, infrastructure, finance, and policy. Through a digital knowledge hub, city officials will be able to connect with organizations that have data, experts, and dedicated programs to help cities facilitate, plan, finance, build, and operate climate-resilient infrastructure.

The next day, Penn representatives—from Perry World House, PennIUR, and the Kleinman Center for Energy Policy—convened an informal dialogue on this issue. This conversation also brought in UN Climate Change’s (UNFCCC’s) Nairobi Work Program—the UN’s adaptation knowledge hub—and key organizations working in capacity-building and financing for climate resilience in cities, including ICLEI – Local Governments for Sustainability, the Global Covenant of Mayors for Climate & Energy, and the Capital Cities Coalition against Climate Change (CC35). This discussion allowed the field’s major players to both share existing initiatives with one another, and identify gaps in knowledge, capacity, and funding. Participants then worked to define next steps for bridging these gaps in a collaborative way.

Opening the informal dialogue, Mayor Ashok-Alexander Sridharan of Bonn, Germany, demonstrated a deep commitment to sustainability as well as both local and global perspectives. As mayor, he serves local urban residents as well as hosts the global headquarters of the UNFCCC and ICLEI. Sridharan is not just a host: he is also now president of ICLEI.

During the discussion, Sridharan addressed the question Rodas titled his presentation: “Is climate financing for cities going mainstream?” The Bonn mayor’s answer was both yes and no. Yes, because the world needs to adapt immediately to how climate change is impacting cities, mitigate these impacts, and develop resilience for the future. And no, since the processes, institutions, and funding are not quite there yet. Sridharan called for a much greater focus on climate finance, resilience, and cities at COP26 next year.

Mark Alan Hughes, professor of practice and founding faculty director of Penn’s Kleinman Center for Energy Policy, then moderated a discussion among Rodas, UNFCCC’s Fiona Gilbert, ICLEI’s Maryke van Staden, Global Covenant of Mayors for Climate & Energy’s Cathy Oke, the World Bank’s Stephen Hammer, WSP USA’s Thomas Lewis, CC35’s Veronica Arias, and UNFCCC’s Koko Warner, who is also a Perry World House visiting fellow.

This productive dialogue raised salient issues that must be addressed for cities to play an effective role in climate action. Many participants pointed out that cities are often referred to generically, as if they are independent and homogeneous actors; in reality, they are not autonomous and have vastly different needs, capacities, and authorities (both financially and legislatively). Consequently, approaches to financing climate-resilient urban infrastructure cannot be one-size-fits-all, but rather must be tailored to each city’s specific context.

How to provide such bespoke support remains an open question, but panelists offered several current and future initiatives, as well as resources for information, to help bridge these gaps. The proposals discussed included four key elements:

1. Mitigation as adaptation: Because the best defense is usually a good offense, van Staden highlighted how mitigation efforts could also contribute to resilience. She explained,: “The more we mitigate, the less we need to adapt to change in the future.” At COP25, the Global Covenant of Mayors released a report rallying over 10,000 cities to pledge to significantly reduce greenhouse gas emissions, a 60% increase in annual potential emissions reductions over the previous round of local government pledges.
2. Vertical integration: Numerous panelists highlighted the need for multi-level governance of, and planning toward, NDCs and National Adaptation Plans (NAPs). Such governance would integrate cities into every step of NDC and NAP processes, which would be a boon to climate action worldwide, as cities are where most emissions are produced and where many of the effects of climate change will be felt most acutely. The UNFCCC’s Standing Committee on Finance’s 2019 Forum Report on Climate Finance and Sustainable Cities includes recommendations for how multi-level, predictable, and reliable financing might be approached.
3. Capacity-building: The group celebrated a number of exciting resources and initiatives available to build capacity within city governments. Urban-LEDS, ICLEI, UN-Habitat, and Transformative Actions Program recently launched a Finance Toolkit for local and regional governments to implement their climate action plans. A new partnership between the American Society of Civil Engineers and the Global Covenant of Mayors, launched at COP25, aims to connect the best engineering talent with city leaders to address the most pressing urban infrastructure challenges. However, Hughes identified a major outstanding challenge: how to build intermediary capacity and keep it within city governments.
4. Project preparation: Many participants highlighted a key challenge for financing institutions: the limited pipeline of viable infrastructure projects that meet their criteria for scale, stage of development, and oversight mechanisms. Hammer emphasized the need for both short- and long-term strategies for project development, and for city planners and leaders to think about urban resilience investment from a systems perspective. CC35 is building portfolios of projects for cities to provide the technical assistance they need in project preparation. Finally, Penn’s C2IFI aims to provide a knowledge hub to help cities better understand and access existing financing opportunities, particularly to close the gap in project preparation capacity.

With so many ideas and initiatives on the table, Warner challenged the group to connect the dots between them, to articulate a vision for a resilient future and then to pave the way there. At such a critical time as this, everyone agreed that real progress must be made now. This dialogue and its diversity reflected the breadth and depth of work being done at Penn and around the world to identify and close the gaps preventing countries from achieving their NDCs. These efforts will ultimately strengthen cities to serve as indispensable partners in this process.

After a week on the ground at COP, I was more persuaded than ever that effective collaboration on shared goals, priorities, and strategies is key. The partnerships formed, strengthened, and announced at COP25 will help initiatives and institutions to learn from one another and to leverage their insights and expertise, such that the global community can move forward with financing and building climate-resilient urban infrastructure as quickly and effectively as possible. The momentum toward expanding financing opportunities and increasing city involvement in climate action is clearly building, and will be central themes at COP26 in Glasgow, Scotland, next year. See you there.