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Helping cities finance climate mitigation

The objective of the support is to implement and scale the final solutions in 2019

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The Lab wants to help cities become more climate-resilient centres
The Lab wants to help cities become more climate-resilient centres

The City Finance Lab (CFL), a joint venture between sustainability solutions provider South Pole and Climate-KIC’s low carbon city lab (LoCaL), has selected the initial winning proposals for innovative financing solutions targeting climate action projects in cities.

 

Following a first public call for proposals in June 2018, the five solutions have been chosen to receive tailored technical advisory until the end of the year. The objective of this support is to implement and scale the final solutions in 2019.

 

Private finance for climate mitigation


In the first half of 2018, the CFL conducted a pilot by supporting the city of Bologna to develop its municipal carbon market, channelling private finance from industries in the region into municipal climate mitigation and adaptation projects.

“Considering that cities generate 70 per cent of global emissions and only receive 15 per cent of global climate finance, being able to better match financing solutions and cities will help accelerate the move towards climate-resilient urban centres,” said Hans-Peter Egler, director public affairs, South Pole.

 

The financing solutions cover a variety of climate action themes which are:

  • Integrating climate action projects into a city’s participatory budget by the Lisbon City Council (Portugal)
  • A self-assessment tool to measure climate-related risks for local governments by Kommunalbanken Norway (Norway)
  • A natural capital-based investment fund to cover the core resources of community forests by Community Forest Trust (UK)
  • Accelerating the replication of territorial development funds such as the “Paris green fund” by the city of Paris (France)
  • An energy performance contracting scheme to stimulate deep retrofitting of buildings in cities by the National Energy Conservation Agency (Poland).

In 2019, the CFL will share lessons learned from the supported initiatives through publicly available blueprints to encourage the replication of the piloted solutions. CFL also plans to engage in targeted capacity building activities to give cities the tools to implement these solutions.

"Cities generate 70 per cent of global emissions and only receive 15 per cent of global climate finance"

CFL’s long-term goal is to expand its activities beyond the European continent to cities in other regions, including Latin America, Asia and Africa, where access to finance for cities, reportedly, remains an even greater challenge.

 

“Municipal finance differs substantially from sovereign finance and commercial finance. Not only in terms of credit worthiness, scale, and citizen relationships but also the regulatory and political environment,” added Sean Lockie, director of urban transition, Climate-KIC and CFL committee member.

 

“This is why it was so important for us to select financing solutions that are tailored to meet the distinct needs of cities.”

 

The committee of the CFL is a council of municipal finance experts from the European Bank for Reconstruction and Development (EBRD), Agence France Locale, Atkins, Climate Resilience Consulting and Climate-KIC.

 

If you like this, you might be interested in reading the following:

 

Cities’ central role in climate change

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How metro mayors can lead the sustainable cities charge

Ashden’s Faye Scott urges the UK’s metro mayors to be bold to drive smarter, more sustainable cities

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Seattle receives climate challenge funding

Award will bring $2.5m in resources to the city to help meet its aggressive climate goals

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