Achieving a paradigm shift needs bundled power from all sides

Lisa Junghans of Germanwatch is a team member of the CDKN supported project ‘Finding the Finance: climate compatible development in Asian cities’. In this blog she discusses the opportunities for cities under the GCF, and how achieving a paradigm shift needs bundled power from all sides.

The Green Climate Fund (GCF) is getting into a decisive stage. After receiving a number of pledges adding up to more than US$ 10bn, it was able to approve its first eight projects across the developing world at the end of last year. The GCF is positioned as a key actor to significantly shape the post-Paris climate change implementation agenda towards the transformation that the Paris agreement aspires.

Key role of the GCF

To achieve this mammoth task, funding from the GCF will have to be channelled to towards highly transformative projects that will lead the way towards a low-carbon and climate resilient world. One central puzzle piece of the transformation jigsaw is the urban arena: on the one hand, cities are responsible for more than 70% of the world's energy related greenhouse gas emissions, while on the other, they are hubs of innovation and are avant-garde. Both features underscore the cities' enormous potential in becoming pioneers of change. So far urban areas have been formally recognized by the GCF, making up two of the initial result areas under the adaptation as well as mitigation window. However, clear operationalisation pathways for the GCF to reach the subnational level are still lacking.

The gap of direct financial support for local governments is not new. Most international funds are struggling to provide financial means to cities, given that the funds' main entry points are national ministries, funds or banks. The limited creditworthiness of local governments as well as higher levels of uncertainty over policies in cities further obstruct the path for international funds to provide funding to cities directly. At the same time the lack of experience among many local authorities in dealing with climate change issues and their limited institutional capacities to develop bankable project concepts currently prevent cities from attracting investors.

However, the GCF has the opportunity to beat this catch-22 situation. If the GCF is serious about advancing a paradigm shift, its first entry point lies in the provision of readiness support to strengthen urban governance structures. This will help to lay the foundation for cities to receive funding directly, be it by becoming accredited implementing entities themselves or through a domestic enhanced-direct access programme. Details of those and other modalities have been explored in Going to town: How the Green Climate Fund can support a paradigm shift in cities.

Need for ownership and local action

At the same time, cities and local governments have to do their part of the paradigm shift equation. In practical terms, a transformation requires a significant makeover and adjustment of urban structures, its organization, and its residents’ lifestyles. Here practitioners often talk about walkable cities, healthy cities as well as cities driven by citizens' innovation.

City leaders need to understand the local value of climate action and thus develop an intrinsic motivation to become champions of an urban paradigm shift. While this can for example be expressed by publicly committing to ambitious climate goals such as climate neutrality, it can also help to start synchronising low-emission and climate resilient projects with city planning processes. Furthermore, given the sheer scale of investment needed for making cities low-carbon and climate resilient, local authorities should also signal their willingness to provide local resources towards climate action.

Picture Courtesy:  Minoru Karamatsu