City-level climate smart approaches and financial instruments

2017 - 2018 Work Streams WS3 - City-level Climate Smart Approaches and Financial Instruments

In a context of growing urbanization, a number of “climate-related issues” are increasingly concentrated in cities and urban areas. Over the last decade, cities have been increasingly active in the area of climate change – and have received more and more attention. While many cities have identified and implemented innovative solutions to addressing these challenges, in many instances the sharing of, and access to, examples of successful practice is not automatic. Furthermore, cities are often limited by capacity constraints- particularly in terms of financial structuring and investment policy and the level of decentralization often determines their capacity to attract financial resources. These capacity issues are further exacerbated by quickly evolving technologies, changing economic models for climate-smart urban development, and diverse legal and administrative frameworks very specific to national contexts.

Context and existing work

This workprogram proposes to focus on the further development of dedicated financing tools for local governments to address climate change. This has been identified by many stakeholders, including local authorities but also financial institutions, as a key element to foster low-carbon and climate-resilient urban development. This workprogram aims to build off the advances already made by a number of existing initiatives including inter alia the New Urban Agenda, the Cities and Climate Finance Leadership Alliance (CCFLA), the C40, the GPSC, etc.

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This work stream focuses on knowledge sharing and on the development of innovative city-level climate smart approaches and financial instruments, covering not only mitigation, but also the development and scaling up of public and private sector investment in climate-resilient urban infrastructure.


At the Global Climate Action Summit, the 42 financial institutions participating in the Climate Action in Financial Institutions Initiative released a Joint Statement demonstrating how they are moving from commitment to action – both individually and collectively – in supporting local climate action.

Aligned with the objectives of the ‘Talanoa Dialogue’, the Statement takes stock of over 40 new and existing commitments, programs and efforts of financial institutions supporting local climate action.

Institutions are advancing four priority areas for the mobilization of finance and technical support, with a special focus on supporting subnational climate action:

  1. the vertical integration of Nationally Determined Contributions (NDCs) at the city and subnational level;
  2. municipal technical assistance and financing;
  3. strengthening city- and subnational- capacity for resilience; and
  4. subnational climate-focused financial instruments and products.


Useful Resources

Relevant Cases studies

Relevant Publications

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Climate Risks :
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Mapping reporting initiatives and understanding implementation challenges
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