The economics of the urban climate change revolution

The economics of the urban climate change revolution

Take a look around you. With most of us now living in cities, your gaze is most likely met with a sky-scraping skyline, multiple modes of available transport, and plaques proclaiming the energy efficiency ratings of buildings.

London and Kaohsiung residents can commute to work on hydrogen buses. Moscow citizens might notice that the cities' streetlights and traffic signals are using energy-efficient LED technology. Even if you live in Johannesburg, Dar es Salaam, Jakarta or other so-called "developing" cities, you might cross town using Bus Rapid Transit (BRT), see a landfill that is converting its methane to electricity, or live near a building that has recently been retrofitted to make it more energy-efficient.

An urban climate change revolution is happening around us. City governments across the world are responding to the threat of climate change with bold, innovative actions designed to reduce greenhouse gas (GHG) emissions and protect the city and its residents from the risks that climate change presents. It is then perhaps unsurprising that cities are a key focus at the U.N. Conference on Sustainable Development (Rio+20) currently taking place.

The latest research from the Carbon Disclosure Project (CDP) analyzing the climate change strategies and carbon emissions of 73 cities around the world shows that 70 percent are already acting to better manage their climate change impact by measuring their city's GHG emissions and assessments of climate change risk. These cities are also responsible for 630 emissions reduction activities, ranging from tree planting to retrofitting buildings to make them more energy friendly.

So what's motivating cities to act to combat climate change? Part of the driver is that most city governments see climate change action as a money-making prospect. 82 percent of the cities that use CDP's platform say that managing climate change presents economic opportunities for them. The majority of these cities anticipate the creation of green jobs, as well as the development of new industries in their cities.

Finding funding for climate change projects, however, presents a perennial challenge. Although the World Bank and other development banks have proclaimed support for city efforts to combat climate change, less than 1 percent of city-wide emission reduction activities are reported to have been funded by these banks. The majority of city carbon-cutting schemes have been paid for by the municipalities themselves.

Cities are enjoying some success with the private sector, which is financing 15 percent of cities' reported emissions reduction activities, but with cities playing a pivotal role in the negotiations at Rio+20, we would like to see greater discussion of how to increase levels of finance to unlock cities' full potential.

Eight cities, including San Francisco, London and Copenhagen, reported to CDP that they had bucked the global trend of rising emissions. While this is encouraging, they represent just a small percentage of the 73 cities disclosing through CDP and it is crucial that cities implement greater reductions in the coming years.

The road ahead is not easy for cities. Consistent annual reduction of carbon emissions is difficult. Weather and fluctuations in population growth can significantly affect emissions while natural disasters are on the rise, straining the financial and personnel resources of city governments. Leaders discussing cities at Rio+20 must ensure they come up with goals and solutions that will enable cities, the source of much of humanity's ingenuity to date, to be at the forefront of the fight against climate change.

Green city photo via Shutterstock.