Financing Sustainable Solutions: What Cities Need to Deliver on COP21 Commitments and Beyond
By Val Smith, Director and Head of Corporate Sustainability May 05, 2016 12:00 PM
The event was held at Rio’s new iconic Museum of Tomorrow, an achievement in sustainable urban architecture
Cities are at the forefront of combatting climate change. Many cities and municipal governments and agencies were party to the Paris Agreement reached at COP21 in December, and many have committed to ambitious greenhouse gas reduction goals and meaningful climate strategies they must now implement. I recently participated in the first-of-its-kind global financing forum, hosted by the City of Rio de Janeiro, C40 Cities Climate Leadership Group (C40), World Resources Institute’s Ross Center for Sustainable Cities (WRI) and the Citi Foundation, where decision-makers from the private sector and nearly 20 global city governments convened to discuss the financial challenges cities face in pursuit of their sustainable climate strategies. The Financing Sustainable Cities Forum highlighted cities’ priorities around delivering sustainable urban solutions, including: cutting red tape, transit-oriented development and public-private partnerships
An overriding theme of the forum was the sense of urgency many cities expressed for greater technical expertise in setting up public-private partnerships, a mode of project delivery that cities are increasingly looking to as a means of more efficiently delivering urban services. While public-private partnerships are great tools for leveraging private capital, their details determine how risks, revenues and costs are shared between a city and private partners over the term of a project. Experience and expertise are both required to ensure a strong partnership.
Forum attendees also emphasized the need for guidance in how to encourage an appropriate regulatory environment that will enable these emerging new urban strategies. For example, car-sharing, ride-sharing, and bike-sharing systems are taking off in cities around the globe, but many cities still have laws ranging from taxi licensing to helmet regulations that either hamper these new services or outlaw them entirely. Cities are reluctant to change longstanding regulations without knowledge of what has been successful elsewhere.
Finally, a strong interest in transit-oriented development matched the results of the U.S.-focused Menino Survey of Mayors, which Citi supported. Transit development is often a complex dance of system funding, land use planning and the engagement of private sector property developers and existing community members. Spurring development along a new or existing transit corridor takes more than simply building the system itself. Cities usually need to create a mix of land use changes, financial incentives, and community engagement to promote successful developments around transit, and challenges vary from one location to another.
While we saw significant sharing of best practices, attendees also walked away with city-specific finance action plans that included practical steps they can take over the next 12-18 months to improve the productivity, livability and sustainability of their cities. The event strengthened links between cities around common interests and C40 will support the cities to continue to collaborate after the workshop through focused working groups and C40 peer-to-peer networks.
Although financing innovation and enabling progress in cities around the world is at the very core of Citi’s DNA and the Citi Foundation’s commitment to promoting greater economic opportunities, we also recognize that innovation doesn’t just miraculously materialize; sometimes it needs a little push. In the world of sustainable financing, cities and bankers are often frustrated in their efforts to bridge the gap between what cities want – to achieve their sustainability goals through innovative new approaches – and the current reality of the financing options that are feasible and accessible. Historically, municipal infrastructure finance relied on the monolithic model of a single city agency, business unit and infrastructure project. But that model is largely obsolete. Today, a wide variety of urban stakeholders are learning to work together - across silos - to tackle some of our most pressing local and global challenges.
This Forum was the first of several convenings being supported by Citi Foundation and its Financing Sustainable Cities Initiative with C40 and WRI. For more information on Citi’s work with cities, please visit Citi for Cities.
Val Smith, Citi's Director and Head of Corporate Sustainability with Helio Lima Magalhães, Citi Country Officer of Citi Brazil, who spoke to how we build the cities of tomorrow