Cities consume enormous resources and accounts to be the centre for climate change.
Role of Local bodies is needed to build a strong climate smart transformation.
What is the role of cities in climate change?
According to UN-Habitat’s estimates, over 64 per cent of the world population is expected to reside in cities by 2050.
The Intergovernmental Panel on Climate Change estimates that urban infrastructure accounts for two-third of the global energy use and 70 per cent of energy related Green House Gas (GHG) emissions.
By 2025 megacities of 10 million or more people will house more than half the world’s population and contribute more than half of global GDP.
As India’s urban population grows from 410 million in 2014 to 814 million in 2050, with about 7 cities having more than 10 million people,
So will there be rise in energy consumption, degradation of forest areas and agricultural land and disturbed ecosystems, problems of water supply and solid waste management.
What is Climate smart transformation?
Series of global climate changes holds an opportunity for cities to lead the world towards a sustainable future by becoming resilient and climate-smart.
Climate-smart transformation needs set of city-specific strategies to systematically reduce city’s carbon footprint and enhance resilience to climate change.
This can be achieved by smart, affordable infrastructure, and mixed form of adaptable land-use.
Sustainable transformation model should include the following
A clearly defined ‘low carbon pathway’.
A series of interventions under certain plausible scenarios around integrated solid waste management (ISWM).
Energy efficient energy/ water supply, harnessing rooftop solar and battery storage.
Green urban mobility (including electric mobility, public and, non-motorised transport),
Green and affordable building infrastructure, smart grids,
What are the barriers in achieving such targets?
Climate finance moves towards mitigation projects that largely focus on energy and transport, such mitigation project needs healthier cash flow dynamics.
The risk/ return profiles of the climate-resilience projects often lack financing beyond government’s budgetary endowment.
The perceived lack of creditworthiness for most cities in India becomes a critical barrier to secure affordable financing on international market or issue bonds to fund climate projects.
Project preparation is expensive, typically accounts for 5-10 per cent of the project cost.
Most cities lack capacity for conducting feasibility, design and, financial structuring of the projects.
How involvement of local body will reach the goal?
An effective way to catalyse private investment in urban projects is to mobilise credits through local financial institutions (LFIs)
Projects such as micro-grids, bundled energy efficiency in water pumping, or waste-to-energy, having smaller deal sizes make them a better fit for local financial institutions having smaller investment appetite.
However, to maximise the development impact, the LFIs while disbursing credits should ensure appropriate Environment-Social Governance (ESG) safeguards.
Tapping into diverse, well-administered local sources of revenue can decrease reliance of cities on the Centre’s transfers.
City-focused ‘fund’ becomes useful, on one-side to support project development and, on the other side to mobilise lending for actual project implementation.
Such a mechanism can ultimately make climate resilient investments, which might not otherwise meet investors’ risk adjusted return, financially more attractive.
At a certain level, cities should also consider reforming the principles of municipal budgeting to accurately value.
