Cities in emerging markets could attract $29-trillion (R395-trillion) in climate-related investments such as green buildings and electric vehicles over the next decade, according to the World Bank Group's International Finance Corporation (IFC).
Researchers looked at the climate action plans of cities with more than 500,000 people, focusing on six sectors: green buildings, public transport, electric vehicles, waste management, water treatment and renewable energy.
"Getting the cities right is absolutely essential for climate," said Alzbeta Klein, the IFC's director for climate business. "They play a role in how climate looks and how it defines for the next generation ahead of us."
More than half the global population lives in urban areas, according to the IFC. Cities consume more than two-thirds of the world's energy, and account for more than 70% of all carbon dioxide emissions.
Green investments, targets and policies in cities will be crucial if countries are to meet the emissions reduction targets endorsed by governments for the 2015 Paris Agreement.
Green building codes, which include reducing energy consumption, will account for $24.7-trillion of climate investment opportunities in cities by 2030, an IFC report says.
Energy-efficient public transport could attract $1-trillion in the same period, while electric vehicles could see $1.6-trillion in investments. Clean energy could bring $842bn of investments, while water may attract $1-trillion, and waste management $200bn.
More than half of the total estimated investment potential will be in East Asian and Pacific cities as they grow and spend on real estate, infrastructure and transport, said Aditi Maheshwari, lead author of the study.
"Cities are driving economic growth in East Asia and the Pacific - they account for over 80% of GDP in most countries," said Maheshwari. "The scale of this economic opportunity is drawing people into the cities and we anticipate 1.2-billion more people will live in Asian cities in the next 35 years."
For cities to attract investment and create a pipeline of bankable projects, they need the ability to borrow money and develop innovative methods such as green bonds and public-private partnerships, Klein said.
On Wednesday, C40 Cities, a network of cities pushing climate action, announced that nine cities would be given specialist support to develop sustainable infrastructure projects over the next two years.
The cities, which include Bogota in Colombia and Tshwane in SA, will get help from national and international experts to prepare financially sound proposals for projects such as bike-sharing, cycle lanes, waste-water treatment and rooftop solar energy.
Thomson Reuters Foundation..