Today, the City Climate Finance Gap Fund (“The Gap Fund”) was launched jointly by ministers and directors of the Governments of Germany and Luxembourg together with the World Bank, European Investment Bank, and Global Covenant of Mayors. It paves the way for low-carbon, resilient, and livable cities in developing and emerging economies by unlocking infrastructure investment at scale.
The Gap Fund will support city and local governments facing barriers to financing for climate-smart projects. Filling a gap in available project support, the Gap Fund offers technical and advisory services to assist local leaders in prioritizing and preparing climate-smart investments and programs at an early stage, with the goal of accelerating preparation, enhancing quality, and ensuring they are bankable.
With a target capitalization of at least €100 million, the Gap Fund will accelerate investments supporting cities in developing and emerging economies, as they determine goals and objectives for low-carbon and well-planned urbanization. The Gap Fund investment is aiming to unlock at least €4 billion of final investment in climate-smart projects and urban climate innovation.
“What cities do today will forever shape our climate tomorrow,” said Mari Pangestu, World Bank Managing Director for Development Policy and Partnerships. “Cities in developing countries urgently need resources to realize their climate ambitions. Through the Gap Fund, the World Bank is supporting low-carbon, resilient, inclusive, healthy, creative, and sustainable communities for all.”
Cities are on the frontlines of the climate emergency and currently account for around 70 percent of global CO2 emissions. Urban centers’ share of emissions is expected to grow as 2.5 billion people migrate from rural to urban areas by 2050. Before the COVID-19 pandemic struck, it was estimated that more than $93 trillion in sustainable infrastructure investment was needed by 2030 to meet climate goals. As cities strive to recover from the economic impacts of COVID-19, investments in clean energy, climate-resilient water and sanitation, and urban regeneration projects will play an important role in eliminating pollution, improving local food systems, and creating green jobs. They will also lead to cleaner, healthier, and more equitable communities – conditions that can help prevent future pandemics.
Climate investment projects are an indispensable opportunity to improve lives of the millions who live in cities around the world. However, cities frequently lack the capacity, finance, and support needed for the early stages of project preparation – especially in developing and emerging economies. This leads to impasses where cities cannot move project ideas to late-stage preparation and implementation. This hurdle is frequently overlooked by national and international support – a challenge the Gap Fund will seek to overcome.
The Gap Fund is an initiative of the governments of Germany and Luxembourg together with the Global Covenant of Mayors for Climate and Energy (GCOM), in partnership with several other key players in the climate finance arena (including C40, ICLEI – Local Governments for Sustainability, and Cities Climate Finance Leadership Alliance). It will be implemented by the World Bank and the European Investment Bank. The Gap Fund was announced at the UN Climate Action Summit 2019 as a key initiative of LUCI, the Leadership for Urban Climate Investment, which promotes financing for ambitious urban climate action until 2025. Core donors to the Gap Fund are Germany (€45 million – including €25 million from the Ministry for the Environment, Nature Conservation and Nuclear Safety, and €20 million from the Ministry for Economic Cooperation and Development) and Luxembourg (€10 million).
How cities can save on commuting time, double job access
A new report released today by the World Economic Forum pinpoints how cities can use mobility options to improve social equity and economic growth.
The white paper, How Mobility Shapes Inclusion and Sustainable Growth, identifies over 40 potential solutions to improve inclusivity in mobility, with simulations of over 40 million daily trips, global benchmarking and in-depth interviews with key stakeholders.
Prepared in collaboration with the Boston Consulting Group and University of St Gallen, the study identifies transportation ‘pain points’ in three cities – Beijing, Berlin and Chicago. Using a six-step transportation equity methodology, the white paper analyses the mobility challenges each city faces, their affected communities and how transportation is driving, or failing to drive, economic growth and well-being. It also offers recommendations that result in real gains.
This methodology fills a void in current transportation analysis and can serve as the centrepiece of a strategy for developing mobility-based social inclusion programmes and policies in the identified cities and elsewhere.
Beijing, People’s Republic of China
This high-density megacity can become nearly 30% more efficient, saving commuters about five days-worth of travel time per year:
- Pain point: Very high demand has overwhelmed Beijing’s public transit network, with queuing times to get into some train stations consistently over 15 minutes, leading many residents to choose driving as an alternative.
- Solution: A digital platform for metro reservations to flatten peak-hour demand and reduce commute time for rush hours.
- Benefit: This equates to a 29% average reduction in travel time for the service users in the modelling for Beijing, an average reduction of 115 hours waiting a year per user.
The report shows how this compact, middleweight city is raising $295 million more per year for inclusive mobility projects:
- Pain point: As central districts have become gentrified, populations have been pushed further from the city centre, where public transport is more limited and fragmented. Berliners in these peripheral areas take about 27% more time commuting than central Berliners.
- Solution: Creating differentiated service levels for public transit increases usage and brings in additional revenue that can be used to improve public mobility systems for the underserved.
- Benefit: A differentiated service level on public transit increased the share of public transit trips by 11% while at the same time generating 28% higher revenue for the public transport operator – an equivalent of $295 million – that can be used to improve access for underserved populations.
A car-centric city such as Chicago can give low-income neighbourhoods access to hundreds of thousands of more jobs:
- Pain point: Low-income households in Chicago spend up to 35% of their income on transportation, due to the high cost of vehicle ownership and reliance on cars for mobility. Average work commute time on public transit for individuals in low-income areas is also nearly 15 minutes longer when compared to residents in some high-income areas.
- Solution: Introducing on-demand shuttles to cover the first and last mile of transport can greatly increase access for underserved communities.
- Benefit: The solution would increase the share of public transit usage in Chicago by 26% and would broaden the number of jobs reachable in 40 minutes – the rough ceiling for a desirable commuting time – by 90%; this would result in improved access to 224,000 jobs from neighbourhoods that did not have access before.
The white paper also finds that in order to foster social inclusion through mobility, both supply and demand must be considered. Purely increasing mobility infrastructure does not always yield the desired results.
For example, adding 10 new subway cars may do little to increase ridership among people with disabilities even if they do not have other transportation options, mainly because getting to a subway station is a challenge in and of itself. Other solutions such as an on-demand mobility service for the disabled community, such as Hyundai Motor Groups’s EnableLA universal mobility service, may be the more appropriate option.
Next Steps for Policymakers
Access to transportation infrastructure is essential to social development and economic growth, and improving the mobility situation for underserved population groups needs to be one of the top priorities for decision-makers.
Since every city has its own mobility and socioeconomic challenges, data collection processes and the current understanding of rider demand must be re-examined in order to gather important information about mobility challenges affecting minorities.
Understanding the baseline conditions of the mobility conditions of each urban environment is crucial in effectively determining the appropriate solutions for individual cities.
Public-Private Collaboration Will Define New Era for Cities
At the World Economic Forum’s inaugural Urban Transformation Summit, which closed on Wednesday, global leaders underscored the need for increased public-private collaboration to capitalize on new infrastructure funding and tackle growing urban challenges around the globe.
“Our cities and our communities are changing right before our eyes. Digitization is transforming urban economies, public health and safety concerns are tearing at the social fabric of communities—and trillions of dollars of new infrastructure funding across the globe holds the potential to transform the physical environment,” said Jeff Merritt, Head of Urban Transformation at the World Economic Forum. “Now more than ever, it is critical that public and private sector stakeholders come together to shape a future that does not just work for the privileged few but delivers for all residents.”
“We have to be real about what this moment in time presents for us and not dismiss it, said Michael Hancock, Mayor of Denver. “We have to be very intentional in our efforts and say we’re going to create a new opportunity that America has not seen and give a chance to right the wrongs of some of the great epic moments in our history.”
“Climate change is not some far distant activity. It is real, and it is occurring now,” said Yvonne Aki-Sawyerr, Mayor of Freetown, Sierra Leone.
Mike Duggan, Mayor of Detroit, said: “We don’t need any more think tanks, we don’t need any more papers. We need public-private partnerships.”
The summit, which comprised both in-person events in Detroit and virtual convenings, included more than 350 mayors, business executives, community leaders and experts in urban development from 38 countries in North America, South America, Europe, Africa, Asia and Australia.
It marked the official launch of the World Economic Forum’s new global Centre for Urban Transformation and spurred a series of new initiatives and collaborations to support the development of more sustainable and inclusive cities.
Notable outcomes and commitments:
Two cities in Europe – Stockholm and Lisbon – were added to the roster of City Strategy Dialogues planned for 2022. In collaboration with MIT, the convenings, which include both public-facing events and more intimate workshops, pair mayors and senior city leaders with global experts and business leaders to forge new approaches to pressing urban challenges.
“New technologies are promising to transform cities in a way similar to what the automobile did in the 20th century,” said Carlo Ratti, Professor of Urban Technologies and Planning Director of the MIT SENSEable City Lab. “That’s why we need new forums – such as the Urban Transformation Summit, the City Dialogues that MIT will co-host with the Forum – to share knowledge and lessons from all over the world.”
Eight cities in Latin America, Africa and Asia – Bogotá, Buenos Aires, Lagos, Dhaka, Jakarta, Kigali, Nairobi, and Rio de Janeiro – have designated neighbourhoods as urban testbeds for new businesses, products and services that can improve quality of life for local residents and mitigate social and environmental challenges associated with rapid urbanization.
Following a four-month review of key barriers to public-private collaboration in cities, Accenture has announced plans to work with the World Economic Forum and its partners to develop new resources and tools to help cities better coordinate place-based strategies and accelerate community partnerships.
Design Core Detroit will lead a participatory design process in collaboration with the Forum to design a Fellowship Program in Detroit. The design process will identify and map new opportunities to scale community-based solutions that will connect Forum business partners to contribute technical assistance towards achieving community-led goals.
Plans for the next edition of the Urban Transformation Summit have already been set in motion. The event will convene once again in Detroit, 11-13 October 2022.
Urban leaders, influencers, chart new path for world cities
Mayors of Mexico City, Bogotá, New Orleans, Freetown, Gaziantep and Barcelona joined other urban leaders, designers, activists and thinkers from around the world on Wednesday, to chart a new path for cities.
A launch event called Cities at the Crossroads, kicked off at the British Academy in London – marking the inaugural session of the new UN-backed Council on Urban Initiatives.
The international group of eighteen mayors, activists and academics was formed in response to UN Secretary-General’s call to use the COVID-19 pandemic as an “opportunity to reflect and reset how we live, interact, and rebuild our cities.”
In a video message showed at the event, António Guterres remembered that cities large and small, “have been epicentres of COVID-19 and are on the frontline of the climate crisis.”
They also face severe risks from climate change, which will only grow, according to UN estimates.
By mid-century, over 1.6 billion urban residents may have to survive through average summertime highs of 35 degrees Celsius. More than 800 million could be at direct risk from sea level rise.
‘A bold new narrative’
For the UN Secretary-General, the pandemic “must be an inflection point to rethink and reset how” people live, interact and build cities.
“Investment in pandemic recovery is a generational opportunity to put climate action, social justice, gender equality and sustainable development at the heart of cities’ strategies and policies”, Mr. Guterres said.
The UN Chief also noted that more and more cities across the world are committing to net zero by 2050, or before.
“The sooner we translate these commitments into concrete action to reduce emissions, the sooner we will achieve green job growth, better health, and greater equality”, he argued.
Also addressing the event, the UN-Habitat Executive Director asked for “a bold new narrative now.”
“We need to bring visionary mayors to the table to help address these interlinked global crises and reframe the discourse on the role of cities, urban governance, design and planning”, Maimunah Mohd Sharif said.
The Council’s mission is to ensure a healthy global debate over urban issues, to help chart a sustainable future. The work will be organized around three challenges: the JUST city, the HEALTHY city and the GREEN city, said UN-Habitat.
The new Council starts its work as the UN’s COP26 climate conference continues in Glasgow, Scotland, trying to keep the goal of 1.5 degrees of global warming, within reach.
Being responsible for approximately 75 per cent of the world’s energy consumption and over 70 per cent of global greenhouse gas emissions, cities are at the core of climate action.
A global challenge
Also this Wednesday, at the World Expo in Dubai, the UN launched the Climate Smart Cities Challenge.
The initiative is an open innovation competition to identify climate smart solutions and reduce urban impact, between the cities of Bogotá, Colombia; Bristol, United Kingdom; Curitiba, Brazil; and Makindye Ssabagabo, Uganda.
According to UN-Habitat, “the climate ambitions of these cities are impressive and addressing them will have a powerful impact in shaping how city leaders, innovators and local communities respond to the climate emergency.”
With these four cities selected, the competition is now asking innovators, including technologists, start-ups, developers, finance experts and more, to submit their best solutions to the unique challenges identified. The application period closes on 5 January.
Up to 80 finalists (up to 20 per city) will be selected to work closely with these four cities, learn more about their challenges, collaborate on solutions, and ultimately form teams to demonstrate solutions in the real-world.
The winning teams will share up to 400,000 Euros to leverage further investment and build towards system demonstration in 2023.
Around 4.5 billion people live in cities today, but that number is projected to grow by almost 50 per cent, by 2050. By mid-century, over 1.6 billion urban residents may have to survive through average summertime highs of 35 degrees Celsius.
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