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Report

The Low Carbon Investment Landscape in C40 Cities

This report and the accompanying spreadsheet aims to highlight the scale of opportunity for investors and to encourage cities to improve project development data in order to attract finance. The accompanying beta pipeline spreadsheet aims to highlight the a) scale of opportunity for investors and b) lack of project data to drive cities to improve project development information and to enable the market shift needed to ensure sufficient finance flows to these vital projects.

Key points

The concluding findings of the analysis of low-carbon infrastructure projects across C40 cities are as follows:

  1. The immediate size and scale for collaboration between C40 cities and investors is tremendous.
    C40 cities have disclosed capital costs for roughly 15% of the sustainable infrastructure projects currently being developed10. Even this fraction of projects amounts to a planned investment of US$15.5 billion – implying a much greater amount for the whole number of projects and demonstrating the sheer scale of immediate opportunity for collaboration with the private sector. There are over 3000 low-carbon infrastructure projects currently being planned across C40 cities worldwide – an average of 20-40 per C40 city – and over 700 in the Buildings sector.
  2. However, the investment opportunity to deliver a climate safe future is much greater.
    It is estimated that up to 2050, C40 cities will need to invest over US$1 trillion on new climate action and in renewing and expanding infrastructure – with US$375 billion of this needed over the next four years alone in order to get on the trajectory required to meet the ambition of the Paris Agreement11 . This is 25 times the amount of investment in sustainable infrastructure that C40 cities have disclosed for over the next few years.
  3. The investment required can only be delivered through collaboration between cities and investors.
    The public sector is unable to fully finance the scale of low carbon infrastructure across C40 cities required for a 1.5 degree scenario, but it has a key role in creating enabling conditions to secure the required private sector investment – such as grants, subsidies and loans – particularly for higher cost, more ambitions projects. Cities will need to leverage their networks, stakeholders, and partnerships, and collaborate to drive change and also to manage significant pipelines of investment and employ innovative financing mechanisms.
  4. Cities must improve project development information in order to accelerate climate action.
    To ensure sufficient finance flows to these vital sustainable infrastructure projects and enable the market shift needed, capacity building within cities and investors is urgently required. The first step in increasing interface between cities and financial institutions is for cities to improve project development information and disseminate and communicate climate change-related projects to the finance industry – for instance, through CDP’s annual disclosure platform. The accompanying beta pipeline spreadsheet intends to drive this information improvement process by highlighting both the lack of project data but also the investment potential across C40 cities.