Zero-Carbon Cities Can Unlock Nearly $24 Trillion

New report shows low-carbon measures in cities could reduce urban emissions by nearly 90 percent and support 87 million jobs annually by 2030

A new report from the Coalition for Urban Transitions finds that investment in low-carbon measures in cities would be worth almost US $24 trillion by 2050 – proof that thriving cities create prosperous countries – while reducing emissions from cities by 90 percent.

Building on three years of research, Climate Emergency, Urban Opportunity examines the important role national governments must play in a zero-carbon urban transition and the opportunities that urban climate action presents to fuel economic growth, reduce poverty and inequality, and avert climate catastrophe.

By prioritizing zero-carbon cities today, national governments can secure economic prosperity and high living standards for tomorrow. The report shows that it is possible to cut 90 percent of emissions from cities using currently available technologies and practices – including carbon savings from buildings, transport, materials efficiency and waste – while also delivering a significant economic return. Doing so would require an investment of US$1.8 trillion (approximately 2 percent of global GDP) per year, which would generate annual returns worth US$2.8 trillion in 2030, and US $7.0 trillion in 2050 based on cost savings alone.

“While cities are at the forefront of climate action, national government support and accelerating access to resources is critical,” said Nanda Jichkar, Mayor of Nagpur and member of ICLEI South Asia’s Regional Executive Committee. “Nagpur, along with Central India, has faced extreme heatwave conditions this year and expects to face worse in the years to come. Thriving cities make prosperous countries and we need support from the government in India and across Asia to tackle this crisis.”

Many of these low-carbon measures would pay for themselves in less than five years, including more efficient lighting, electric vehicles, improved freight logistics and solid waste management.

The report also demonstrates that in addition to the economic benefits, compact, connected and clean cities provide a higher standard of living and greater opportunity for all. Investments in low-carbon measures in cities could support 87 million jobs annually by 2030.

These measures will also reduce choking air pollution, cut chronic traffic congestion, and improve worker productivity. Creeping urban sprawl currently threatens vital agricultural land and forests: between 2000 and 2014, urban settlements expanded by an area of land twice the size of Sri Lanka. Creating more compact, connected cities would protect biodiversity, safeguard food and water security and enhance resilience to new climate hazards – all while cutting emissions from land use change.

The need for a zero-carbon urban transition is immediate, and the costs of inaction could be devastating. Over ten percent of the world’s population, 820 million people, live in coastal zones prone to sea level rise, and 86 percent of them live in urban or quasi-urban areas.

Many city governments are already playing an active role in tackling the climate crisis: nearly 10,000 cities and local governments have committed to set emissions reduction targets.

However, even the largest and most powerful city governments can only deliver a fraction of their mitigation potential on their own. The Urban Opportunity report shows that local governments have direct power over less than one-third of the emissions reduction potential in their cities. National and state governments have power over a further one-third. More than a third depends on different levels of government working together to cut emissions, making the future of cities a vital collaborative effort.

Worldwide, fewer than two in five countries have an explicit national strategy for cities, and only seven countries currently have both a National Urban Policy and a Nationally Determined Contribution that specifically address climate mitigation in cities.

This report also presents six key priorities for actions that national governments can take to seize this opportunity:

1) Develop an overarching strategy with cities at its heart to deliver shared prosperity while reaching net-zero emissions. Such a strategy can guide ministries to incorporate urban development into their approach, de-risk low-carbon investment by providing clear signals to private actors, and empower local governments to go farther and faster.

2) Align national policies behind compact, connected, clean cities. Examples include removing land use and building regulations that limit higher, livable density; banning the sale of fossil fuel-powered vehicles and adopting green alternatives to steel and cement.

3) Fund and finance sustainable urban infrastructure. Examples include eliminating subsidies for fossil fuels and establishing a carbon price of US$50–100 per ton to sharpen investment incentives, reforming land and property taxes and shifting national transport budgets from road-building to public and active transport.

4) Coordinate and support local climate action in cities. Examples include authorizing local governments to introduce climate policies and plans that are more ambitious than national policies and allocating at least one third of national research and development budgets to support cities’ climate priorities.

5) Build a multilateral system that fosters inclusive, zero-carbon cities. Examples include placing cities at the heart of enhanced Nationally Determined Contributions in 2020 and 2025 and ensuring that all international development assistance is aligned with national urban strategies compatible with the Paris Agreement and the 2030 Agenda for Sustainable Development.

6) Proactively plan for a just urban transition. Examples include using revenues from carbon taxes or fossil fuel subsidy reform to compensate those who bear the costs of climate action, supporting community-led upgrading of informal settlements to reduce poverty and enhance climate resilience and anticipating, protecting and supporting the workforce of the future, in particular by developing transition plans for fossil fuel-based workers and industries.

Further reading

A full list of the report recommendations for national governments can be found here.

A summary of key report findings can be found here.

The full report can be found here.

Adapted from Coalition for Urban Transitions materials. ICLEI – Local Governments for Sustainability was a contributor to the Climate Emergency, Urban Opportunity report.

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