City initiatives are key in climate change battle
By Dimitris Tsitsiragos
Anyone feeling discouraged at the prospect of reducing the impact of climate change should hop on a bus in Cartagena, or ride the ferry in Izmir. Mayors around the world are not waiting for international consensus to respond to the threats climate change represents to their citizens and economies.
The world’s cities are growing quickly, particularly in emerging markets. About 440 emerging-market cities are poised to deliver close to half of global GDP growth. Many municipal leaders are problem-solving to address challenges related not only to climate change — but to dozens of other issues, including traffic congestion, ageing infrastructure, and safety and security of their citizens.
There is hardly a more critical place to start making an impact: Cities consume two-thirds of the world’s energy, generate 70 per cent of global carbon emissions, and have helped fuel inequalities. The percentage of poor people living in cities and being disproportionately affected by congestion, pollution and accidents, in fact, is expected to grow.
Rapidly growing numbers of urban dwellers especially in emerging markets will need millions of jobs, more affordable homes to live in, transportation for people to get to work, clean water and sanitation for families to stay healthy and reliable electricity — a cost that runs into trillions of dollars.
Last month, some of the most innovative mayors in the world gathered for a conference on cities in London to discuss how to make urban areas part of the solution on issues ranging from fighting inequality to battling climate change, and to find ways toward promoting diversity instead of accelerating divisiveness.
Mayors are taking important steps to make their cities more sustainable, resilient, and inclusive.
First, they are starting to provide incentives for private investment, and find ways to leverage public resources to attract private sector companies into areas that had been perceived as too risky or not producing sufficient returns. There has to be greater appetite among national authorities allowing local governments to borrow and to have a significant degree of control over their revenues and expenditures, supporting fiscal decentralisation — a necessity to enable private investment.
Second, cities are starting to take a hard look at their finances to improve creditworthiness. With stronger financial management and better credit ratings, cities will have far greater access to investment and more ability to tap global and local markets.
Now, just 5 per cent of the 500 largest cities in developing countries are considered creditworthy on international markets.
Some cities have recently made important investments in fighting climate change. Cartagena’s bus rapid transit system featuring natural gas-powered vehicles, dedicated lanes, streamlined routes, elevated stations, and smart-card payments has saved commuters more than half in fares while improving the commuting experience. The system brings down CO2 emissions by 68 per cent, making public transit an attractive alternative in a city where 86 per cent of the total population (1m) is low-income.
Other cities, including Buenos Aires and Montreal, are among those building and expanding similar bus rapid transit networks as part of an emphasis on transit-oriented development — making green and efficient mobility a priority for the sake of city residents and future growth, with climate boost as a bonus effect.
And in Izmir, a city of 4m people on Turkey’s Aegean coast, municipal authorities have tackled growing congestion and pollution through a number of investments to improve public transit, all of which are paying dividends for quality of life. This has included a new ferry service, metro line, tramway, and a smart traffic lights network to move people more smoothly and efficiently, to reduce spending on fuel, and to lighten the city’s carbon footprint. Izmir also received a AAA credit rating for local currency lending, sending a signal of confidence to investors.
Copenhagen, the city that wants to be every cyclist’s dream and become carbon neutral by 2025, has shown a model that offers many lessons for other cities to emulate.
This is just the beginning. A World Bank report looked at 750 global cities and found that 75 per cent have grown faster than their national economies during the past two decades. It also revealed that cities could create several million jobs every year by being more competitive and supporting the development of the private sector.
Officials can do that by adopting reforms that foster innovation, target land rights, and improve access to infrastructure that help attract and grow the private sector. It will not be easy. But with such political will come capital: If cities attract more private investment, and that investment supports sustainable environments, the world’s urban areas can be engines of inclusive growth that open new markets, create new opportunities and produce more jobs.
Dimitris Tsitsiragos is Vice President of New Business at IFC, part of the World Bank Group.
This blog first appeared on the Financial Times’ beyondbrics.