Cities around the world are responsible for ever-growing shares of people, assets, and economic activities vulnerable to climate disasters. They are also responsible for the majority of the world’s carbon emissions. Cities in low- and middle-income countries still have a window of opportunity to grow in resilient and low-carbon ways, to protect their populations and build strong and sustainable economic foundations. What are the resilient and low-carbon investments that these cities could make in the coming decades? How much will these investments cost, and where can cities look for resources to pay for these investments? These are the questions that Banking on Cities: Investing in Resilient and Low-Carbon Urbanization considers.

The publication provides the most comprehensive and up-to-date assessment of key resilient and low-carbon investment costs in major urban sectors in all low- and middle-income countries to 2050. These include investments in urban transportation, energy-efficient buildings, solid waste management, water and wastewater, flood protection, and heat resilience. The estimated total cost of these investments revealed by this analysis is sobering: between US$256 and US$821 billion per year. However, “climate” investments are not a separate category of investments that cities need to make in addition to their regular investments.

These are core urban investments that cities need to make for their local economic and social benefits in addition to their climate benefits. Banking on Cities advances the discussion on urban climate finance by exploring how cities can identify sources of funding and finance that are suited to different types of resilient and low-carbon urban investments. Just as climate investments are not a separate category of investments, climate finance is not necessarily a separate category of finance. While climate-specific sources, including carbon markets, green bonds, and others, are part of the picture, making these investments will require cities to address their financial fundamentals, including revenues, transfers, creditworthiness, and fiscal efficiency.

This report will be a helpful guide for cities and national governments as they develop their urban investment strategies.

Report by the World Bank Group