Climate Smart Cities – India, Peru, Malaysia, Indonesia, China

Climate Smart Cities is making an economic case for early investment in the transition to a low-carbon economy. The program, currently underway in nine cities across the developing world, provides a credible base for appealing the merits of climate action to local decision-makers on economic grounds, thanks to its body of detailed evidence on the attractiveness of various low-carbon measures. This program is informing policy-making, innovative financing models, and strategic planning, helping to unlock and direct large-scale investment into energy efficient, low-carbon development.

Fast facts:

Investments identified for nine cities that could reduce energy use and carbon emissions by up to 27%;
Average investments of $5.2 billion per city could generate savings worth more than $1.2 billion annually over two years;
“Mini-Stern” methodology currently guiding investment decisions for four cities in the United Kingdom;

The problem

By 2050, it is predicted that almost three-quarters of the projected global population of nearly 10 billion people will live in cities. Cities are currently responsible for around three-quarters of global energy use and energy-related carbon dioxide emissions. Add to this the fact that 90% of growth in the world’s urban population is projected to take place in developing countries, and it becomes clear how important growing cities in the developing world will be in terms of mitigating climate change. However, uncertainty and lack of local knowhow and investment often prevent the rapid uptake of low-carbon measures for cities.

The solution

The Climate Smart Cities activity implemented “Mini-Stern” studies presenting an economic case for climate action across nine cities in the developing world: Kolkata in India, Lima in Peru, Johor Bahru in Malaysia, and Palembang in Indonesia (completed); in Recife in Brazil, and the cities of Beijing, Tianjin, Shanghai, and Chongqing in China (underway).

Gathered through a series of participatory workshops and expert review sessions with government and industry partners, the research provides detailed information on the investment needs, payback periods, returns, and carbon savings for a wide range of measures that could realistically be promoted. Energy, housing, commercial buildings, transport, industry, and waste sectors within the city are targeted. Results demonstrate how specific investments would lead to significant reductions in cities’ energy use and carbon emissions – while saving money within a few years’ time.

The reports are presented in a menu format to policy-makers, development banks, development agencies, and industry representatives for use in designing enabling policies and financing applications to unlock a wide range of new sources of climate-smart investment.

Helping the planet

Investment in measures such as energy efficient building tools, development of small-scale renewable energy, and bus rapid transport systems reduces energy use and pollution, including greenhouse gas emissions. This helps prevent further climate change. More efficient use of resources, such as better management of waste, also conserves natural resources.

Helping people

Investment in climate-resilient infrastructure will reduce the impacts of extreme weather, while fostering development. Less pollution improves the quality of life for all city residents, while better public transport and access to energy specifically aid the urban poor.

Scaling up

This is a winning prospect since investments presented pay for themselves in a relatively short period of time through energy savings – while reducing greenhouse gas emissions. That the project and methodology has already been replicated from UK cities to various cities in the developing world clearly demonstrates its potential for further expansion.