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1、Urban Climate Finance in the Wake of COVID-19 A Policy Brief from the Cities Climate Finance Leadership Alliance December 2020 AUTHORS Amanda Lonsdale, Priscilla Negreiros, Kristiina Yang ACKNOWLEDGMENTS Many thanks to Carolin Koenig and Marie-Lena Hutfils (FELICITY), Malte Lellmann (C40 CFF), Justi
2、ne Audrain (FMDV), Eugenie Birch (UPenn), Mauricio Rodas (UPenn) and Amanda Lloyd (UPenn) for taking the time to share insights and comments. Thanks also to Elysha Davila, Caroline Dreyer, and Idan Sasson for valuable comments and editing support, and Angela Woodall for design and layout. CONTACT Al
3、liance Secretariat secretariatcitiesclimatefinance.org Priscilla Negreiros, Project Manager priscilla.negreiroscpiglobal.org ABOUT THE CITIES CLIMATE FINANCE LEADERSHIP ALLIANCE The Cities Climate Finance Leadership Alliance (the Alliance) is a coalition of leaders committed to deploying finance for
4、 city level climate action at scale by 2030. It is the multi-level and multi-stakeholder coalition aimed at closing the investment gap for urban subnational climate projects and infrastructure worldwide. Climate Policy Initiative (CPI) serves as Secretariat for the Alliance. Funding for the Alliance
5、s activities is jointly made available through two German government ministries: The Federal Ministry for Economic Cooperation and Development (BMZ) and the Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU). KEYWORDS Urban climate finance, Cities, Green recovery, CO
6、VID-19 Copyright 2020 Climate Policy Initiative www.climatepolicyinitiative.org All rights reserved. CPI welcomes the use of its material for noncommercial purposes, such as policy discussions or educational activities, under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported Licen
7、se. For commercial use, please contact adminsfcpiglobal.org. ABSTRACT In order to alleviate the economic and social consequences of COVID-19, several public and private entities have announced economic stimulus packages: national governments have proposed fiscal and monetary stimulus; multilateral d
8、evelopment banks (MDBs) and climate funds have announced recovery funds to assist developing countries and emerging economies; and a number of private institutions have launched initiatives promoting green infrastructure investment opportunities. These COVID-19 recovery packages under development ar
9、e an opportunity, especially for cities, to relaunch their economies and promote a green transition to carbon neutrality. Yet, it is still unclear how cities might benefit from these recovery funds and how related to urban climate finance these funds will be. This policy brief aims at responding to
10、this problem. In examining COVID-19 recovery assistance for cities from key funders - national governments, Development Finance Institutions (DFIs), and the private sector - some key trends have emerged: From the USD 20.5 trillion pledged to COVID-19 recovery globally, only USD 1.1 trillion dollars
11、are committed to cities. From this, USD 916 billion went to short-term liquidity and USD 194 billion to remaining funds. Of the more than USD 1.1 trillion pledged to cities to-date: Funding is starting to evolve from short-term, immediate liquidity assistance to longer term, recovery-focused approac
12、hes. Significant funding has yet to be programed, either by geography or sector. Common themes and areas of intervention are emerging across city-specific instruments that can guide programing for current and future initiatives. These trends point to opportunities and strategies for funders and citi
13、es to jointly promote a green urban recovery; however, barriers exist in terms of directly providing funding to cities, and finding approaches to addressing the diverse economic, regulatory, and sectoral needs in a comprehensive way. To address these challenges, we recommend: Structuring financial i
14、nstruments to enable cities to access them directly. Working with local and/or climate-specific institutions to develop appropriate mechanisms and project portfolios. Working with project preparation facilities (PPFs) to support the investment readiness of projects chosen by cities. Working through
15、existing networkssuch as the Cities Climate Finance Leadership Allianceto facilitate effective knowledge and experience exchange. IV URBAN CLIMATE FINANCE IN THE WAKE OF COVID-19 CONTENTS 1. Introduction 1 2. Objectives 3 3. Trends in assistance for cities and COVID-19 5 4. Instrument analysis 9 4.1
16、 DFI/Climate instruments 9 4.1.1. Assistance by sector 9 Examples of interventions by sector 10 4.1.2 Assistance by time horizon 10 Examples of short-term interventions 10 Examples of medium-term interventions 11 Examples of long-term interventions 12 4.1.3 Interventions by region 12 4.1.4 Summary o
17、f DFI trends 13 4.2 National instruments 14 4.2.1 Summary of National government trends 16 4.3 Private instruments 16 5. Challenges and Recommendations 18 5.1 Challenge: Cities ability to borrow or access funding is limited, leading to a lack of direct control over resources 18 Recommendations 19 5.
18、2 Challenge: The diversity in size, investor readiness, and scope of need from city to city is immense, making it difficult for funders to devise comprehensive, long-term approaches 20 Recommendations 20 7. Conclusion 23 8. Annex 1: List of Development Finance Institution (DFI) acronyms 24 9. Source
19、s 25 1 URBAN CLIMATE FINANCE IN THE WAKE OF COVID-19 1. INTRODUCTION The COVID-19 pandemic will have far-reaching global impact for years to come. The impacts are particularly pronounced in cities, as they are on the frontline of the health, social, and economic crises caused by the pandemic. In Jul
20、y 2020, the UN estimated that 90% of all reported COVID-19 cases were in cities.1 Cities are key to global recovery from the pandemic, as the center of economic and social activity more than 4 billion people (more than 55% of global population2). However, cities are facing the need for massive trans
21、formation at a time when they can least afford it. In the wake of COVID-19, the tax and fee revenue that city governments would typically rely on to fund critical services like transportation, housing, and sanitation has declined significantly. At the same time, city administrations have increased s
22、pending on healthcare and social protection. Many cities have already spent through their reserves and reached their maximum debt ceilings. In some cases, cities have put capital expenditures on hold indefinitely, or shifted long-term capital budgets to immediate operational needs. Coupled with thes
23、e fiscal challenges are regulatory and structural impediments preventing cities from borrowing or accessing donor funding directly. Funding from external sources is paramount given the existing gap of public infrastructure. Over the next ten years, 90 trillion U.S. dollars in infrastructure investme
24、nts will be needed3. This existing infrastructure gap for sustainable transport, energy, housing, waste and wastewater management, flood and heat resilience projects, as well as the inevitable need for investment in climate actions to maintain global warming below 1.5 Celsius continues to be a key p
25、riority during and after the COVID-19 pandemic. Cities are a major source of greenhouse gas emissions. In the process of “building back better,” cities will need to incorporate climate smart and resilient recovery policies that will contribute to long-term sustainability and resilience. Beyond the e
26、nvironmental aspects, a recent analysis from the International Labor Organization (ILO) calculated that the transition to more “climate-resilient” economies could directly create 18 million jobs, and indirectly support 1.2 billion others4. This is particularly important, as the COVID-19 pandemic has
27、 also exacerbated disparities between the wealthy and the poor. The urban poor in many cities live in communities where existing infrastructure is weak, and where overcrowding and physical structures do not allow for proper social distancing. Many housing developments lack adequate access to water,
28、electricity, and internet connectivity. The urban poor are less likely to be able to work from home and often lack access to testing and treatment. They are also more vulnerable to the effects of climate change. 1 United Nations 2020. 2 United Nations 2018. 3 New Climate Economy 2016. 4 OECD 2020. 2
29、 URBAN CLIMATE FINANCE IN THE WAKE OF COVID-19 As the Cities Climate Finance Leadership Alliance (the Alliance) noted in its statement on the COVID-19 crisis: “The pandemic is a wake-up call that our cities must be better prepared for the climate crisis. As with COVID-19, the negative effects of cli
30、mate change will lead to catastrophic consequences for cities. However, climate impacts will stay with us over a much longer period of time, with even more devastating impacts, than COVID-19.”5 5 Cities Climate Finance Leadership Alliance (the Alliance) 2020. 3 URBAN CLIMATE FINANCE IN THE WAKE OF C
31、OVID-19 2. OBJECTIVES As of October 25, 2020, USD 20.5 trillion had been pledged for COVID-19 relief globally.6 Of this funding, however, just over USD 1.1 trillion was pledged in whole or in part to cities, the bulk of which is intended for short-term fiscal support (see the section on Trends). As
32、the world begins to recover from COVID-19, more funding needs to be channeled toward cities given their place at the nexus of economic, health, and environmental well-being for more than half of the global population. The policy brief is written at a time when many funding entities are still formula
33、ting their strategies, and as needs are shifting and increasing in cities and other sectors. To this end, our intention is to capture a snapshot of what has been committed to date, analyze the approaches and broader trends, and provide recommendations for cities and funders going forward. As commitm
34、ents are increasing and changing by the minute, it may not capture everything, but tries to provide as comprehensive a view as possible.7 To this end, the objective of this brief is to identify the gaps and opportunities with funding pledged to-date, and to provide recommendations for how to channel
35、 existing and future funds toward facilitating a green recovery. We focus on the funding that has been announced to support a green recovery for cities since the COVID-19 pandemic began. In the recommendations, we indicate where funding facilities and alliances can be leveraged to effectively deploy
36、 capital toward a green recovery. We analyze funds that have been committed in whole or in part directly to cities to help manage the impact of the COVID-19 crisis, with an emphasis on the capital earmarked for a green recovery. For this work, we focus on three major types of funders: (1) developmen
37、t finance institutions (DFIs) and climate funds, (2) national governments, and (3) the private sector (including philanthropies) (see Figure 1), and directs our recommendations to these parties. 6 Cornish 2020. 7 The commitments were mapped from March 2020 until October 2020. Types of Funders Develo
38、pment Finance Institutions (DFIs) and Climate Funds: these are bi- and multi- national organizations or funds focused on providing grant assistance or debt capital to developing countries. They include organizations such as the World Bank Group, Asian Development Bank, the African Development Bank,
39、and the United Nations. The research covers 21 organizations (see Table 2). National Governments: in this policy brief, national governments include funding directly from a countrys treasury as well as funding from national development banks to fund assistance in that country (not multi- or bi-later
40、al assistance). The policy brief identified city-specific initiatives from 17 countries plus the European Union. A full list of countries reviewed is in Table 3. Private sector: this covers private investors and banks, and foundations/philantropic organizations. A comprehensive review of these organ
41、izations was conducted, and two initiatives- from HSBC and JPMorgan Chase- were identified. 4 URBAN CLIMATE FINANCE IN THE WAKE OF COVID-19 For this analysis, we divide the pledged support into phases, (1) first tracking the funds intended for immediate emergency or short-term support to lessen the
42、financial, health, and infrastructure crises faced by cities. We then (2) look to the medium-term where assistance is targeted at helping cities to start to recover and make modifications to minimize viral spread in public spaces and transportation. (3) Finally, we examine those funds pledged to ass
43、ist in a long-term green recovery for cities to strengthen their resilience to future pandemics and climate crises. While the initiatives identified varied in size, focus, and structure, common themes emerged according to timeline and intervention as shown in Table1. Table 1: Types of assistance by
44、phase SHORT-TERMMEDIUM-TERMLONG-TERM Emergency liquidity for cities to relieve debt payments, increasing borrowing capacity, funding to replace lost tax and fee revenue. Humanitarian and social safety net assistance. Water, sanitation, and health (WASH) emergency interven- tions. Funding for testing
45、 and trac- ing, supplemental hospital facilities. Support to SMEs and other businesses to maintain opera- tions and employment. Social distancing on transportation. Water treatment mea- sures. Upgraded health facilities and infrastructure. Sustainable COVID-19-compliant ret- rofits. Water and Sanita
46、tion. Full urban re-design or retrofit. Clean energy/ energy effi- ciency. Project preparation facili- ties to increase the pipe- line of investment-ready projects, and ensure they address climate mitigation and adaptation. When identifying and analyzing instruments, we apply the definition of “urba
47、n climate finance” used by the forthcoming 2021 State of Cities Climate Finance Report8, as follows: “Resources directed to activities limiting city-induced GHG emissions or aiming to address climate-related risks faced by cities, contributing to urban low carbon development or resilience. For urban
48、 climate mitigation, this covers projects contributing to reducing or avoiding GHG emissions from sources located strictly within the city boundary, or for those produced as a consequence of activities occurring in the city exclusively. For urban climate adaptation, this covers projects that aim at
49、maintaining or increasing the adaptive capacity and resilience of cities, in response to climate- related risks affecting the city directly.” 8 The Report is planned to be launched by February/March 2021. 5 URBAN CLIMATE FINANCE IN THE WAKE OF COVID-19 3. TRENDS IN ASSISTANCE FOR CITIES AND COVID-19 Research of publicly available documents and announcements discovered financial assistance consisting of more than 150 facilities or financial instruments9 of around USD 1.1 trillion committed to activities that directly or indirectly support urb