Unlocking Climate Finance for Cities
As the world’s urban centers continue to grow, the need for investment in sustainable and resilient infrastructure has become increasingly urgent. Latin America is no exception, with over 80% of its population living in cities. Yet, despite a projected annual need of $5.4 trillion, cities currently receive only 1% of the climate finance required to address the challenges posed by climate change.
“Financing must reach the local level – the cities, the city dwellers, the people who suffer with heat waves, who lose their belongings and in the worst cases, their lives,” said Ilan Cuperstien, Regional Director for Latin America at C40 Cities. “These are seemingly abstract topics, but they affect people’s lives.”
The UrbanShift Latin America Forum convened over 250 leaders from 35 countries across the region, alongside peers from Asia and Africa, to tackle this critical issue head-on. The four-day event galvanized a much-needed conversation around how global climate financing structures need to evolve to ensure resources flow directly to cities – where adaptation and resilience measures can be implemented most quickly.
“Our global climate finance architecture is not designed to work with cities; it’s designed to work with national governments,” explained Andrea Fernández, Managing Director for Climate Finance, Knowledge and Partnerships at C40 Cities. “There’s a real structural issue with our climate finance infrastructure.”
However, the forum also equipped participants with practical tools and resources to better navigate the existing financial system and access new sources of funding for local climate action projects. A day-long “Investors’ Roundtable” led by C40 Cities brought representatives from 13 Latin American cities into direct conversation with financers to raise awareness about the investment opportunity of adaptation-related projects and receive feedback on how to strengthen these projects to attract investment.
Additionally, ICLEI delivered an UrbanShift City Academy course on “Accessing Urban Climate Finance,” which offered participants an assessment of the current finance landscape alongside guidance on preparing applications for ICLEI’s Transformative Actions Program (TAP) – a core part of UrbanShift’s finance offer to help local and regional governments ensure their projects’ bankability.
“It’s very difficult to transform ideas into projects, and that is the focus of TAP,” said Eszter Mogyorósy, Head of Innovative Finance for ICLEI. “We help shape the projects at the very early stages until they interest development banks and financiers.”
Through this dual approach of advocating for finance sector transformation and equipping city leaders with the resources to implement and scale transformative projects, the UrbanShift Latin America Forum aimed to accelerate climate action and resilience projects across the region.
Integrating Nature-Based Solutions into Urban Development
In the heart of the Amazon, the conversation about urban development is inextricably linked to its impact on natural ecosystems. Traditionally, urbanization has come at the expense of ecosystem health, as Sharon Gil, Program Manager and Cities Lead at the United Nations Environment Programme (UNEP), noted: “We have become fundamentally detached from natural processes.”
However, the UrbanShift Latin America Forum offered new models for urban development that center and strengthen natural systems and resources. During an ICLEI-led City Academy course on “Circular Economy Strategies for Sustainable Development,” participants learned about approaches to waste management and food production that can simultaneously preserve and protect natural resources while also stimulating local economies through creating good, green jobs.
“Waste is not a resource we are currently extracting financial value from,” said Magash Naidoo, Head of Circular Development at ICLEI. But city-level circular programs that collect and transform waste into useful goods, like construction materials, can keep pollution out of green areas and spur the development of new local sectors.
The forum also explored the concept of an urban bioeconomy – a model that makes use of renewable, local biological resources to produce food, materials and energy, benefitting the health and economic well-being of local communities. In Belém, the potential of an urban bioeconomy is already taking root. On nearby Combu Island, which forum participants visited, Filha do Combu harvests cacao, processes it on the island, and circulates the resulting products through the Brazilian economy, including restaurants. By retaining full control of the production and distribution chain, Filha do Combu can ensure a stronger profit and local economic benefit while adhering to sustainable harvesting and production practices.
These nature-based approaches to urban development offer a promising path forward, as Latin America continues to grapple with the challenges of rapid urbanization. As Aloke Barnwal, Senior Climate Change Specialist at the Global Environment Facility, noted, “Planning with nature can provide benefits to urban residents, from lowering temperatures to improving air quality, while combatting ecosystem erosion.”
Strengthening Resilience in Informal Settlements
Latin America is one of the most urbanized regions in the world, with over 80% of its population living in cities. However, the challenge of growth in the region revolves less around expanding urban footprints and more around maximizing and strengthening existing urban infrastructure to create more resilient and equitable cities.
As Latin American cities have grown, informal settlements have proliferated, with around 21% of urban residents now living in these areas. “These areas are most vulnerable to climate change and face a lot of risks,” said Pablo Lazo, Director of Urban Development at the WRI Ross Center for Sustainable Cities.
“We are in an emergency situation due to climate change,” added Anacláudia Rossbach, former Director for Latin America and Caribbean at the Lincoln Institute of Land Policy and current Executive Director of UN-Habitat. “We are facing more conflicts and disasters that will require action, and we have to be able to respond in a coordinated way and use this moment to strengthen our response infrastructure and resilience.”
A major focus of the UrbanShift Latin America Forum was on ensuring the resilience of urban areas, especially informal settlements, amid an intensifying climate crisis. Comprehensive city planning processes that take a climate action lens were emphasized as essential to strengthening present and future resilience.
During the “Accommodating Urban Growth” City Academy course, Guillermo Orbegozo Malca, Executive Director of the Metropolitan Planning Institute for Lima, Peru, described how the city is approaching its resilience planning process. Fenced in by mountains and the ocean, Lima has reached the limit of its territorial growth, and much of the city’s recent expansion has been informal settlements stretching into the peripheral steep areas. Given these constraints, the city is now taking area-specific approaches to work with communities to upgrade settlements, integrate green space, and improve transportation options for residents.
“The idea is to empower families so they can work with this development approach, to improve their health and access to recreation,” Orbegozo Malca explained.
Even in highly urbanized regions like Latin America, cities hold enormous potential to evolve and become more resilient. By focusing on strategies like adding housing density, implementing low-carbon transportation options, and integrating nature and climate-change mitigation measures, cities can work directly with their most vulnerable residents to ensure stability, well-being, and empowerment.
As Cibele Assmann, Urban Planner for the city of Florianópolis, Brazil, stated, “We need complete neighborhoods for all. We see how the lack of connectivity contributes to traffic, emissions, and lower quality of life. We need to centralize resources and create neighborhoods where resources are accessible to all.”
Conclusion: Toward a More Sustainable, Equitable, and Resilient Future
The UrbanShift Latin America Forum tackled a broad range of issues, all of which must be understood as part of the same conversation. Resilient and sustainable urban development depends on new and innovative approaches to financing, alongside people-centered development strategies that prioritize community engagement, nature-based solutions, and the upgrading of informal settlements.
By advocating for the transformation of global climate finance mechanisms, equipping city leaders with practical tools and resources, and promoting integrated models of urban development that balance the needs of people, nature, and the climate, the UrbanShift Latin America Forum aimed to accelerate the transition toward a more sustainable, equitable, and resilient future for cities across the region.
As the world grapples with the intensifying impacts of climate change, the decisions made by Latin American cities today will have far-reaching consequences. By laying the foundation for green, resilient cities, the region can serve as a global model for urban development that prioritizes the well-being of all residents and the long-term health of the planet.
To learn more about the UrbanShift program and its work in Latin America, visit jointactionforwater.org. The UrbanShift team is committed to empowering cities to take bold action and create the change our world so urgently needs.
