20 Feb Research finds cities require major investment for urgent climate infrastructure
New research from CDP indicates that cities worldwide critically need an $86 billion investment in climate infrastructure as they experience rising financial pressure for more resilient and sustainable urban projects. Through CDP’s environmental disclosure system, 611 cities spanning 75 countries reported over 2,500 climate-related projects last year. Despite the rising demand, about half of these projects are still in early development due to dwindling technical and financial support. Based on all projects, the investment required exceeds $86 billion, representing a 23% increase from the previous year. Water management is considered the highest-priority industry, with over 270 projects valued at $28 billion in investment needs. Transport records 397 projects with a $19 billion investment required, while buildings and energy efficiency account for 508 projects, with a figure of $12 billion.
In terms of regionality, the US leads in reported projects with over 480, followed by the UK with 333, Brazil with 204 and Portugal with 181. Katie Walsh, the CDP head of climate finance for cities, states and regions, explains that cities are leading the way in the battle against climate change, but without the critical and significant investment, their efforts will be limited. Walsh highlights that to make clear progress, we must support and empower local governments, particularly those in developing economies, with the financial support they require.
Now is the time to scale up climate finance, build stronger cross-industry collaboration and make clear climate-focused plans that deliver resilient cities and support a sustainable future.
Prioritising the climate finance gap
While wealthy nations report the highest number of projects, the study indicates that emerging markets and developing economies will experience the most significant financial impacts. Only 27% of total financing requirements come from EMDE cities, despite their pronounced vulnerability to climate change.
Furthermore, results from the CDP suggest ongoing challenges in securing climate finance from governments to urban regions. While urban climate finance flows doubled between 2017 and 2022, they are still well below the forecasted $4.5 trillion required every year until 2030 to manage climate challenges efficiently. With 86% of reported projects still requiring funding and a further 40% in EMDEs needing full financing, tackling this imbalance remains a priority.
To improve the climate finance gap, CDP is encouraging public and private finance organisations to work together and for policymakers to help deliver the necessary environment. CDP also recommends integrating national and local strategies to ensure that national climate plans are reflective of the local requirements needed for effective urban climate finance. CDP has also emphasised the need for structured data on climate projects in cities and the investment requirements to support new measures such as the Coalition for High Ambition Multilevel Partnerships (CHAMP). Improved transparency in disclosing data is critical to enable investment and support decisive climate action, particularly as cities experience more extreme weather conditions and continue working on reducing their environmental impact.
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