The Power of Cities: Harnessing Low-carbon Urbanization for Climate Action Alexandrina Platonova-Oquab Apoorva Shenvi © 2023 The World Bank Group 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank Group with external contributions. “The World Bank Group” refers to the legally separate organizations of the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The World Bank Group does not guarantee the accuracy, reliability or completeness of the content included in this work, or the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. 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All queries on rights and licenses should be addressed to the World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org Contents Acknowledgements........................................................................................................................................................... 05 Abbreviations...................................................................................................................................................................... 06 Executive Summary and Recommendations 07 Chapter 1 17 Pursuing low-carbon urban growth in developing countries is critical for the climate transition 1.1 Impact of urbanization trends on GHG emissions in rapidly urbanizing developing countries............................ 18 1.2 Opportunities and challenges in advancing low-carbon growth in cities in rapidly urbanizing countries......... 21 1.3 Role of multi-level climate governance in harnessing urban climate action........................................................... 24 Chapter 2 26 National climate change strategies lack robust consideration of urban climate action 2.1 NDCs and LTSs as bridges between national and urban decarbonization goals................................................... 27 2.2 Supporting integration of urban climate mitigation action into national climate change strategies................. 31 Chapter 3 31 Enhancing policy frameworks and institutional structures to support integration 3.1 Integrated policy frameworks...................................................................................................................................... 35 3.2 Integrated institutional structures............................................................................................................................... 40 Chapter 4 41 Strengthening finance mobilization at the local level for climate action 4.1 Limited capacity at city level is a barrier for mobilizing climate finance................................................................ 44 4.2 Integration of urban climate action into NDCs and LTSs can boost finance mobilization.................................... 45 Chapter 5 47 Urban diagnostics and integrated MRV systems to underpin integration 5.1 Role of diagnostic tools in facilitating integration of urban climate action into NDCs and LTSs......................... 48 5.2 Guide for selecting urban diagnostic tools and models............................................................................................ 52 5.3 Integrating systems for tracking climate action......................................................................................................... 59 Chapter 6 61 Readiness for urban climate action integration 6.1 Readiness Diagnostic Framework................................................................................................................................ 64 6.2 Levels of readiness......................................................................................................................................................... 64 6.3 Case study: Ghana’s readiness for urban climate action integration...................................................................... 72 References......................................................................................................................................................... 79 02 Boxes 1.1: Emergence of small- and medium sized cities as the dominant urban settlement type....................................... 20 1.2: City-level climate mitigation commitments................................................................................................................ 22 2.1: NDC and LTS: Key country-specific instruments for achieving Paris Agreement goals........................................ 27 2.2: Role of LTSs in decarbonizing development.............................................................................................................. 28 2.3: Low GHG emissions interventions for urban areas in Ethiopia’s LTS...................................................................... 29 2.4: Urban mitigation in India’s Long-Term Low-Carbon Development Strategy........................................................ 29 2.5: Nigeria’s long-term vision for its cities........................................................................................................................ 29 2.6: Linkages between Ethiopia’s NDC andLTS................................................................................................................. 31 2.7: Climate Action Tracker’s approach to assessing readiness of national governments to transition to zero- emissions pathways.............................................................................................................................................................. 31 3.1: Climate change mainstreaming in national development planning—Bangladesh................................................ 37 3.2: Advancing urban development consistent with national development and climate priorities—South Africa 38 3.3: Alignment between mitigation goals in Ghana’s NDC with actions in Accra’s Climate Action Plan.................. 39 3.4: Assigning key responsibilities for climate action to lower levels of government in Kenya................................. 39 3.5: Aligning urban climate plans to national strategies—Addis Ababa, Ethiopia........................................................ 40 3.6: Collaboration and stakeholder engagement on climate at the local level—Cape Town, South Africa............. 41 3.7: Leveraging knowledge on climate action reporting through collaboration......................................................... 41 4.1: Main sources of climate finance available to cities..................................................................................................... 46 4.2: Climate responsive public financial management framework................................................................................. 46 5.1: Urban tools and models: Understanding common features to support tool selection......................................... 53 5.2: Forecasting sustainable growth scenarios for Semarang, Indonesia using Urban Performance......................... 57 5.3: MRV process as defined under UNFCCC..................................................................................................................... 59 5.4: Relevance of integrated MRV systems to support evidence-based climate policy processes........................... 60 6.1: Urbanization status and key characteristics: Accra, Kumasi, and Tamale............................................................... 72 6.2: The National Spatial Development Framework.......................................................................................................... 74 Figures ES.1: Integrating low-carbon urbanization considerations across climate and urban development policy and implementation processes.............................................................................................................................. 08 ES.2: NDCs and LTSs can be important impetuses for prioritizing the low-carbon urban development agenda..................................................................................................................................................................... 10 ES.3: Barriers for integrating low-carbon urbanization across climate and urban development policy planning and implementation processes.............................................................................................................. 10 ES.4: Integrative solutions across the three pillars............................................................................................... 11 1.1: Average CO₂ emissions per capita and share of global CO₂ emissions generated in cities, by country income group, 2015................................................................................................................................................ 18 1.2: Urban population 2020 to 2050...................................................................................................................... 19 1.3: Global population, by area of residence and size of urban settlement in 2018........................................... 20 1.4: Exposure to climate change-related hazards, by city size............................................................................ 21 2.1: The three key pillars for integration of urban climate action into national climate change strategies....................... 32 3.1: The scope of integration of climate and development strategies considering urban systems................. 34 3.2: Integrative solutions for policy frameworks.................................................................................................. 37 3.3: Integrative solutions for institutional structures........................................................................................... 42 4.1: Integrative solutions for finance mobilization................................................................................................ 45 5.1: Solutions for strengthening evidence-based urban climate policy processes............................................ 50 5.2: Criteria for selecting models: (a) Model abilities and (b) Usability and robustness................................... 54 5.3: High-level decision tree for model selection based on intended purpose and priorities of the diagnostic 55 5.4: MRV-related elements for planning and tracking climate action................................................................. 59 5.5: Integrative solutions for MRV systems and processes.................................................................................. 61 03 Tables 5.1: Main urban diagnostic parameters to assess implications of low-carbon growth interventions in urban areas.............................................................................................................................................................. 50 6.1: Readiness Diagnostic Framework Questions.................................................................................................................. 66 6.2: Climate change mainstreaming in Ghana’s national development planning and budgeting processes............. 73 6.3: Recognition of low-carbon growth priorities in Ghana’s national urban agenda..................................................... 74 6.4: Urban climate action in Ghana’s national climate change strategies......................................................................... 75 6.5: Climate action planning in Accra...................................................................................................................................... 76 6.6: Decentralization and intergovernmental coordination and communication on climate action in Ghana.............. 77 6.7: Organizational structures and functions on climate change in Ghana........................................................................ 78 6.8: Stakeholder engagement and collaboration in Ghana’s climate planning................................................................ 78 6.9: Technical and financial capacity to support urban climate action in Ghana............................................................. 79 04 Acknowledgements This report was prepared by a team led by Alexandrina Platonova-Oquab and Apoorva Shenvi, under the guidance of Joanna Masic. The core team also consisted of Paolo Avner, Steffen Lohrey, David Mason, Mark Roberts, Megumi Sato and Sandra Lucia Lopez Tovar. Additional written inputs into the report were provided by Abubakari Ahmed, Harikumar Gadde, Neeta Hooda and Catherine Lynch at various key points. The technical analysis undertaken for the report was supported by ARUP and Ricardo. The ARUP team was led by Ben Smith and Giacomo Magnani and the Ricardo team was led by Rose Bailey, Flavia Carloni and Floriane de Boer. The work was conducted under the general guidance of Jennifer Sara (Global Director, Climate Change Group), Bernice Van Bronkhorst (Global Director, Urban, Disaster Risk Management, Resilience, and Land), Sameh Wahba (Regional Director, Europe and Central Asia, Sustainable Development), Rahul Kitchlu (Practice Manager, Climate Change Operationalization and Impact) and Genevieve Connors (Practice Manager, Latin America, Sustainable Development). The team greatly benefited from excellent advice and guidance from the following peer reviewers at various points in the report preparation process: Syed Adeel Abbas, Arturo Ardila Gomez, Ellen Hamilton, Abhas K. Jha, Augustin Maria, Craig Meisner, Veronique Morin, Nicholas Menzies, and Uri Raich. The team is also grateful for inputs provided by Peter Ellis and Stephen Hammer at conceptualization-stage. Preparation of the report also benefited greatly from the feedback received from the discussants and other participants of a workshop organized by the World Bank’s Climate Smart Cities Community of Practice on March 31, 2022, and a workshop hosted by the City Climate Finance Gap Fund workshop entitled “Mobilizing Climate Finance for Cities: Integrating Urban Development Plans, National Determined Contributions, and Long-Term Climate Strategies” at Innovate4Climate on May 26, 2022. Discussants who have not already been acknowledged were Gyongshim An, Axel Baeumler, Jon Kher Kaw, Raghu Kesavan, Lukas Loeschner, Xueman Wang (World Bank); Andy Deacon and Benjamin Jance (GCoM); Bernhard Barth (UN- Habitat); and Inés Lockhart (C40). Further, the team is grateful to Stephane Hallegatte, Gayatri Singh, Tiffany Minh Tran, and Chandan Deuskar for providing key insights to the report. Karen Schneider was the substantive editor; Joseph Michael Brunton was responsible for the design and typesetting of the report. This work received generous financial support from the NDC Support Facility. 05 Abbreviations AMA Accra Metropolitan Assembly Long-term Low Greenhouse Gas Emissions LTS Strategy BAU Business-as-usual LTV-2050 2050 Long-Term Vision for Nigeria BRT Bus rapid transit LUSP Land Use and Spatial Planning BUR Biennial Update Report °C Degree Celsius M&E Monitoring and evaluation CAP Climate action plan MDB Multilateral Development Bank CBT Climate budget tagging Ministry of Environment Science, MESTI Technology, and Innovation CCFLA Cities Climate Finance Leadership Alliance Metropolitan, Municipal and District CDP Carbon Disclosure Project MMDA Assembly CCFLA Cities Climate Finance Leadership Alliance MoF Ministry of Finance CH₄ Methane MRV Measurement, Reporting, and Verification Climate Public Expenditures and CPEIR Institutional Review MT Medium term CO₂ Carbon dioxide Medium-Term Development Policy MTDPF COP Conference of Parties Framework CRGE Climate Resilient Green Economy NCCP National Climate Change Policy European Bank for Reconstruction and NDC Nationally Determined Contribution EBRD Development NDP National Development Plan EPA Environment Protection Agency National Development Planning EV Electric vehicle NDPC Commission GACMO GHG Abatement Cost Model NLTDP Long-Term National Development Plan Global Covenant of Mayors for Climate & GCoM NSDF National Spatial Development Framework Energy GHG Greenhouse gas NUP National Urban Policy Global Protocol for Community-scale Organization for Economic Co-operation GPC OECD Greenhouse Gas Inventories and Development GTP Growth and Transformation Plan OSR Own-source revenue HIC High-income country Public Expenditure and Financial PEFA Accountability IAMs Integrated Assessment Models PFM Public financial management IEA International Energy Agency PPP Public-private partnership IPCC Intergovernmental Panel on Climate Change RDTR Detailed spatial plan IUDF Integrated Urban Development Framework SSA Sub-Saharan Africa LIC Low-income country UMIC Upper-middle income country LMIC Lower-middle-income country United Nations Framework Convention on UNFCCC LT Long term Climate Change LT-LED Long-Term Low Emissions Development WRI World Resources Institute 06 Executive Summary and Recommendations Extensive systemic transformations of urban areas in rapidly The authors propose that the integration journey start with a urbanizing developing countries can be a powerful vehicle country- and city-specific readiness diagnostic developed for for advancing low-carbon urban growth that supports global this report—the Readiness Diagnostic Framework. This decarbonization goals. Since most of the urban infrastructure Framework can help identify changes required in policy processes, and footprint in rapidly urbanizing countries in Asia and Sub- institutions, finance mobilization efforts, and climate action planning Saharan Africa (SSA) will be built in the next few decades, and tracking to inform decision makers in rapidly urbanizing urban policy decisions made today will have long-lasting countries at both national and city levels about the actions needed implications on the contribution of cities to future global to pursue integration of low-carbon urbanization priorities into greenhouse gas (GHG) emissions. While the GHG emissions national climate change strategies, including NDCs and LTSs. generated by cities in developing countries have been relatively low compared to cities in high- and upper-middle- income countries (HICs and UMICs), given the scale of urban Untapped climate mitigation growth anticipated in these countries, pivoting away from high I opportunities in rapidly urbanizing GHG emissions trajectories and pursuing low-carbon countries in Asia and Africa¹ urbanization pathways are essential to avoid locking in carbon- intensive development in the long-term. Rapid urbanization in countries in Asia and SSA will have This report highlights the urgent need to improve the significant and long-lasting impacts on their cities’ carbon integration of low-carbon urbanization priorities into the footprint and resilience to climate change. Currently, urban Nationally Determined Contributions (NDCs) and Long-Term population growth in these regions is accompanied by sizeable Low-GHG Emission Development Strategies (LTSs) of rapidly urban land area expansion, especially in small- and medium- urbanizing countries and outlines the opportunities to sized cities. Continuation of such urban spatial growth trends leverage them as bridges between national decarbonization could significantly increase GHG emissions. Rapidly growing and urban development goals and priorities. These key cities in these regions risk locking in more resource- and GHG instruments, which outline countries’ long-term visions for low- emissions-intensive development and consumption patterns in GHG emissions, climate-resilient development (LTS) and the long-term, particularly in the housing and transportation medium-term climate priorities (NDC), often overlook the sectors. Further, high rates of poverty and informality and limited urgency of decarbonizing urban systems. Integrating climate access to basic services, coupled with low emergency mitigation considerations for urban systems that are synergistic preparedness, make these cities highly vulnerable to climate with countries’ urban development goals in these strategies change-related shocks (adapted from Mukim and Roberts 2023). could elevate this agenda and accelerate its implementation. As countries strive to embed priorities and targets from national Rapidly urbanizing LICs and LMICs have an unprecedented change climate strategies (especially NDCs and LTSs) into their opportunity to avoid conventional urban development development planning efforts, incorporating low-carbon urban patterns. According to the Intergovernmental Panel on development considerations into NDCs and LTSs can signal Climate Change (IPCC), rapidly growing small- and medium- strong political commitment to this agenda, foster coordination sized cities, whose urban form is still evolving and where most with urban governments and other local stakeholders, facilitate of the urban infrastructure is yet to be built, hold some of the access to finance, and enable effective implementation of highest climate mitigation potential (Seto et al. 2014). Given the multi-sectoral urban policies and actions. Considering the pace of urban growth in these cities, early and urgent climate impact of urbanization and urban mitigation measures on action is crucial. Pursuing low-carbon urban growth can also national GHG emissions can also help leverage the potential of contribute to addressing immediate local priorities such as such measures and their spillover effects to achieve national reducing traffic congestion, curbing air pollution, enhancing (and global) climate goals and progressively raise ambition. public health, and improving overall productivity of urban areas. Moreover, reducing energy demand and promoting To bolster the integration of low-carbon urbanization resource efficiency can enhance the resilience of cities to priorities into NDCs and LTSs, this report identifies climate hazards such as extreme heat and drought. numerous integrative solutions across countries’ policy frameworks and institutional structures; finance With urbanization pressures magnifying the urgency to mobilization efforts; evidence-based policy processes; simultaneously achieve multiple development priorities, cities and measurement, reporting, and verification (MRV) in LICs and LMICs face numerous constraints in moderating systems. The integration process should account for the their long-term GHG emissions trajectories. Underinvestment in contextual differences and characteristics across countries infrastructure and services, high levels of informality, low levels of and their urban areas emerging from varied policy access to electricity, water, and sanitation, and weak or poorly frameworks, institutional structures, and financial and enforced urban spatial planning regulations significantly constrain technical capacities. It is also crucial to recognize the pressures of rapid urbanization, especially in low-income the livability of cities in LICs and LMICs and limit their potential to countries and lower-middle-income countries (LICs and contribute to inclusive economic growth. Climate action in such LMICs) and associated challenges such as infrastructure contexts is hindered by financing gaps, institutional and technical deficits and high levels of urban informality. The proposed capacity constraints, and limited knowledge of, and access to, solutions address several key barriers to integration arising low-carbon solutions. Furthermore, over half the urban population from context-specific challenges that limit inclusion of low- in Asia and SSA is either already living or projected to live in carbon urbanization considerations into NDCs and LTSs smaller cities and towns, which typically have the most acute and hinder their effective implementation. institutional, technical, and financial capacity gaps. 07 ¹ This report focuses on LICs and LMICs in Sub-Saharan Africa and Asia. Executive Summary and Recommendations Low-carbon urbanization in LICs and LMICs should advance Given the complex and multi-sectoral nature of urban both urban development and climate-related priorities. In the systems, realizing climate and urban development near-term, countries and cities should prioritize opportunities to objectives simultaneously requires effective coordination of pursue investments that meet their immediate development efforts between national and subnational levels of needs yet result in a lower carbon footprint without governments and across sectors. Multiple public, private, and compromising affordability or access (e.g., public housing non-state entities and actors (e.g., city governments, public incorporating passive design techniques to reduce energy use, transit agencies, water utilities, power distribution companies, improving waste collection and segregation to facilitate private developers, equipment manufacturers, local recycling) and over time invest in more ambitious actions and stakeholders) are involved in planning and implementing expensive low-carbon infrastructure (e.g., net-zero buildings, urban climate action, with each playing a unique role. gas-to-energy systems in landfills). This can be achieved by Additionally, many urban mitigation actions go beyond cities’ simultaneously developing and strengthening policy jurisdiction and are linked to national climate priorities and the frameworks that lay the foundation for more ambitious climate- country’s long-term decarbonization vision (e.g., deployment of related policies in the medium-to-long term (e.g., spatial electric vehicles [EV]). Undertaking such actions requires planning frameworks, urban design regulations, building codes). coordination between entities at various levels of government (e.g., ministry of environment, ministry of planning, state and Vertical and horizontal integration across metropolitan-level entities, city departments in charge of climate and urban development policy capital investment planning) to mobilize institutional, technical, II agendas is crucial to enable the low-carbon and financial resources. transition in urban areas Integration of climate and urban development policy agendas can be facilitated by policy frameworks, institutional Avoiding long-term carbon lock-in and achieving deep structures, and financing and tracking mechanisms that are decarbonization in urban areas requires system-wide integrated vertically and horizontally. Vertical integration transitions across key GHG emissions drivers such as involves aligning and coordinating strategies and policy transportation, buildings, waste, and land use. Urban areas reforms and their implementation across different government are complex systems with multiple interdependent sectors and levels (Figure ES.1). For example, city-level climate action plans infrastructure that constitute their built environment and should be aligned with NDCs and LTSs. Vertical integration contribute to service provision. As a result, realizing and leverages the potential of each level through collective efforts implementing urban mitigation action at the pace and and promotes top-down and bottom-up information exchange. magnitude needed to meet global net-zero emissions goals will Horizontal integration involves coordinating efforts between require coordinated efforts and integration of sectors, core government entities (e.g., ministries or departments of strategies, and innovations. Moreover, complementing sectoral planning or finance), sectoral entities (e.g., urban development climate mitigation measures with cross-sectoral or system-wide and housing, transportation, energy, water, environment), and efforts to advance actions that have cascading effects across external stakeholders (e.g., academia, business and industry, key emissive sectors (e.g., transportation, energy, housing, land private investors, non-profit organizations, citizen groups) use) can help achieve deep GHG emissions reduction (Lwasa (Adapted from C40 2020). et al. 2022). Figure ES.1: Integrating low-carbon urbanization considerations across climate and urban development policy and implementation processes Levels : Horizontal National Coordination Regional Vertical Coordination Local Climate LTS, NDC, Urban Climate Action Plans Strategies: Sectors: Urban Development & Housing, Transport, Energy, Water, Environment, etc. Source: Adapted from UN ESCAP 2020. 08 Executive Summary and Recommendations Cities and other subnational actors can bring valuable NDCs and LTSs reflecting the low-carbon insights to the national decarbonization vision by urbanization agenda can provide an impetus playing an active role in the co-creation of LTSs. III to broader integration between urbanization Subnational entities and local stakeholders can offer and decarbonization goals insights on slow-onset impacts of urbanization on GHG emissions (e.g., evolving urban forms and land use, rate National climate change strategies currently lack robust of construction of new building stock, travel demand consideration of challenges and opportunities of low- patterns). Such inputs can help prioritize interventions carbon urbanization. The share of NDCs with urban content and policy reforms that have substantial long-term submitted to the United Nations Framework on Climate benefits, prevent costly lock-in, and have positive Change (UNFCCC) by June 2022 increased marginally spillover effects beyond urban areas. Co-creation of LTSs compared to NDCs submitted in 2017. The nature of this can enable better articulation of needs for policy reforms content ranges from a high-level description of climate and resource mobilization to facilitate long-term systems, vulnerability and GHG emissions from urban areas to specific technology, and behavior shifts in urban areas. actions and targets dedicated to urban sub-sectors. Further, Additionally, systematic involvement of subnational most NDCs with urban content focus on mitigation responses actors in LTS processes can promote strong local without discussing mitigation-related risks of urban growth, ownership and buy-in and enable a more just transition, making it difficult to track progress and evaluate the impact of especially for urban population groups that are likely to these responses (UN Habitat 2022b). The integration of be most affected by LTS implementation. urban climate action into existing LTSs remains equally Improved harmonization of NDCs and LTSs limited. As of July 2023, all 66 LTSs submitted to UNFCCC² facilitates integration of low-carbon urban included mitigation responses in key urban sub-sectors such development considerations into national climate as buildings, energy supply, transportation, and waste. All change strategies. Coordinated development of a LTSs highlight the importance of subnational governments, including cities, in achieving their long-term goals, but largely country’s LTS and NDC can leverage the many don’t recognize the significant risk of carbon lock-in or the interdependencies in policy reforms and mitigation mitigation potential of urban areas, settlements, and the responses across different planning horizons, create a housing sector, only identifying these as adaptation priorities reciprocal relationship, and increase consensus (UNFCCC 2022). around policy priorities. Longer-term policy signals emerging from the LTS can guide short-to-medium- NDCs and LTSs that effectively integrate the low-carbon term actions, which can be pursued through NDCs urbanization agenda can be important vehicles for and their subsequent updates. Such coordination advancing broader integration efforts. This report shows helps prioritize concrete climate-informed policies and that NDCs and LTSs can act as bridges between national measures that are expected to lead to long-term decarbonization goals and urban development priorities, system-wide effects in urban areas (e.g., integrated underscoring the integrated approach needed for achieving urban planning). It also guides sectoral policy reforms the low-carbon urban transition. It outlines five main and investments that can contribute to decarbonizing benefits of such integration (Figure ES.2): urban sub-sectors (e.g., adopting energy performance standards and increasing their stringency over time). Collaboration across government levels based on clearly Mainstreaming priorities and targets of NDCs and LTSs defined roles and mandates for urban areas to deliver that reflect the low-carbon urban development agenda NDC priorities can facilitate NDC implementation and into countries’ national development planning can enhance access to finance. Pursuing alignment of urban strengthen implementation of urban climate action. climate action with national climate priorities can increase With several countries making efforts to integrate their the contribution of urban areas to achieving national national climate goals into their development planning climate goals and enable them to access domestic public processes and pursue climate change mainstreaming, and private financing for climate projects. Further, NDCs including robust low-carbon urbanization considerations reflecting robust and concrete mitigation measures at city in NDCs and LTSs can provide significant momentum for level that are aligned with both national climate goals and integrating this agenda into economy-wide and sectoral local development needs can send a strong signal to development plans and cascade it down to subnational investors and development partners and help mobilize level, facilitating its implementation. external resources. LTSs can provide key insights about feasible early How this report supports development and implementation of climate action actions and longer-term enabling conditions that can IV reflecting the priorities of the low-carbon help avoid lock-in of GHG emissions-intensive urbanization agenda development in urban areas. Considering impacts of urbanization in LTS design can facilitate (i) the formulation of low-carbon urban development pathways To support development and implementation of climate consistent with relevant sectoral decarbonization policies and strategies that integrate low-carbon urban strategies and (ii) identification of city-level mitigation development considerations, this report discusses three actions that can feed into sectoral decarbonization main pillars of integration: (i) integrated policy frameworks strategies and implementation plans and contribute to and institutional structures, (ii) strengthened finance LTS targets. In some developing countries, a robust mobilization, and (iii) evidence-based policy processes and long-term net-zero strategy for the capital city or a integrated MRV systems. These pillars represent the points at group of major cities can deliver a substantial share of which integration would typically be required—from both GHG emissions reduction and establish models for content and process perspectives—to achieve more cohesive replication in other cities. In countries that don’t have an policy and institutional frameworks, reduce financing gaps for LTS, developing low-carbon urbanization pathways can climate actions, and enable design of robust evidence-based trigger and inform LTS development. climate policy and infrastructure solutions. ² This number includes three LTSs from countries in South Asia (India, Nepal, and Sri Lanka) and five in Sub-Saharan Africa (Benin, Ethiopia, The Gambia, South Africa, and Zimbabwe). Nigeria has published a long-term development vision that will inform the development of its LTS. 09 Executive Summary and Recommendations Figure ES.2: NDCs and LTSs can be important impetuses for prioritizing the low-carbon urban development agenda NDCs and LTSs that effectively integrate the low-carbon urbanization agenda can be important impetuses for prioritizing broader integration efforts 1 2 3 4 5 Delivering climate Prioritizing early Enhancing climate Mainstreaming Decarbonizing targets in urban actions & long-term strategies with urban climate urban development areas response urban contributions action Collaboration across LTS can provide key Active role of cities Improved Mainstreaming NDC various government insights to help and other subnational harmonization of and LTS goals that levels based on identify affordable actors in co-creating NDCs and LTSs can reflect the low- clearly defined roles early actions and a country's LTS strengthen carbon urban and mandates for longer-term ensures that urban- integration of low- development agenda urban areas in enabling conditions specific insights are carbon urban into development delivering NDC to help avoid integrated into the development planning can priorities can locking in urban economy- wide considerations into strengthen facilitate areas onto a carbon- vision for national climate implementation of implementation and intensive decarbonized strategies. urban climate action. access to finance. development path. development. Figure ES.3: Barriers for integrating low-carbon urbanization across climate and urban development planning and implementation processes Lack of e, resources, a expertis technic gra cy tion Lac tur ilit str ons inte f poli res knowle k o es, ies al capa uc p f cl rol ko La w-c ls at ear es, i ck a c lo oa Lac b dge, city g of rbo ity ins and aw n d lev titu ar ev el en el tio nd es op La so m co ck of nal f n en po ordin vert at t licy at ica io pro ion i l na ce n cl l sse im ted s ate or limi ity Lack ak ac o mains f climate c We ial cap n c policy treaming a hange fina makin cross g Policy frameworks Strengthened and institutional finance Lack of authority and structures mobilization mandates at the city level al nation ints of ies W Constraies and polic tech eak or lim strateg nical of on ing Evidence-based policy capa ited ratiplann city te g t processes and integrated t al in en en MRV systems vertic elopm sist ns r de v o Poo an on cti urb inc te a in ban and ur d di min tio eir a fo iz t an lim ag g n im r a h tech ps f c Li sti w-c thw act no lo pa p m c a a s t l ari g els s a g o ev ou en v in ita to rb ys ta ing Limi capacit stic too m at rt nica diagno Da ack tio ol on rn es po requ ly with Mity to ns s in tr ve ss re ted l ents RV of go roce ring reso ies to us ls com ed capac p iffe D urce irem s an p Limit d e 10 Executive Summary and Recommendations These actions should be supported by transparent The extent to which a national government can facilitate monitoring and evaluation of the achieved outcomes across integration across different levels of government and actors, either the climate and urban development policy agendas. In many simply through information sharing (e.g., without formal structures) developing countries, the policy frameworks, institutional or through decentralizing mandates and responsibilities (e.g., structures, financing, and progress tracking mechanisms that formal legislative integration, devolution, decentralization) will differ are integrated vertically (across different levels of based on countries’ governance contexts. government) and horizontally (across relevant sectors) are either not in place or in nascent stages. This report discusses Limitations in the structure and functioning of urban policy approaches for advancing the integration process across processes and/or climate policy processes relevant for urban each pillar, building on a detailed analysis of gaps and climate action can impede the achievement of integrated policy barriers (summarized in Figure ES.3), opportunities, and frameworks. Poor vertical integration of urban development integrative solutions. Other areas that are not discussed in planning, constraints of national strategies and policies that may detail in this report but that provide important enabling hinder advancement of the urban climate agenda, and/or lack of solutions for integration may include communication and requisite authority and mandates at city level are the main urban engagement approaches, capacity building, legal frameworks policy process barriers that impede integration. Countries facing and tools, and implementation modalities. these barriers would typically have a weak foundation for integration of urban and national climate agendas. The typical The Readiness Diagnostic Framework proposed in this limitations in climate policy processes that hinder integration report recognizes countries’ varied urbanization contexts include (i) absent or weak climate change mainstreaming across and levels of readiness for integration of low-carbon policymaking, (ii) limited vertical coordination of climate policy urbanization considerations and can help urban and processes (misalignment between climate action at different national decision makers tailor integrative solutions to their government levels), and (iii) lack of awareness of national low- specific circumstances. Examples of integration between carbon development goals at city level. local and national strategies analyzed in the report show that integration is highly context-driven, as it depends on a Integration calls for a clear allocation of responsibilities to combination of policies, administrative structures, distribution specific administrative functions within government institutions of mandates, and decision-making practices that differ across for implementing climate strategies. To ensure that countries. In addition, country and city contexts are governments perform these functions efficiently and that the characterized by levels of readiness based on their current personnel implementing them are empowered to fulfill climate- state of policy alignment, institutional capacities, and efforts related responsibilities, governments should establish or revamp needed to change the status quo that will determine institutional structures. There are no optimal organizational achievable near- and longer-term milestones for the structures that are conducive to integrated urban climate action integration process. The report discusses several country and and establishing entirely new (formal) structures is often city examples to illustrate these aspects and includes a challenging or unrealistic. A feasible approach could be to embed detailed case study of Ghana’s readiness for urban climate climate change-specific functions within existing institutional action integration. structures while proactively promoting a shared understanding of objectives and available resources. Main integration pillars and current gaps Strengthening coordination and fostering collaboration V and barriers to their achievement between institutions can help overcome resource and capacity gaps, especially at city level. Lack of formal, permanent, and predictable structures and functions hinders coordination between government entities, potentially impeding allocation of institutional and financial resources and technical Pillar 1: Integrated policy frameworks expertise to support climate-related functions at city level. In and institutional structures addition to improving structures and coordination, it is important to create mechanisms that facilitate collaboration between personnel carrying out inter-linked functions or working in areas with overlapping mandates across government levels. An integrated policy framework facilitates alignment of objectives between two or more interlinked policy agendas and coordinated development, implementation, and monitoring and evaluation of actions across these agendas. Such coordination Pillar 2: Strengthened finance mobilization is pursued across national and subnational levels³ (vertical integration) and relevant entities functioning within each level (horizontal integration) and pertains to the development and enhancement of strategies and policies that advance the climate Cities often face significant challenges in accessing climate and urban development agenda—translating them into laws and finance because of capacity constraints. Cities in LICs and regulations, establishing institutional structures, and allocating LMICs are often constrained in mobilizing financing for climate- financial and other resources to support implementation. related investments from their own-source revenues (OSR). They are also unable to raise capital on financial markets Effective cooperation between different government levels in because of factors such as a low degree of financial autonomy, setting up policy processes and institutional structures is limited creditworthiness, and lack of a borrowing track record. crucial for strengthening the link between national and urban Insufficient financial expertise and technical skills to identify, climate planning. Depending on a country’s climate governance develop, and effectively implement climate projects are other important barriers to finance mobilization (including from structures and the level of advancement of city-level climate international climate finance sources). In small and medium strategies, integration can combine elements of locally led cities, this gap is often compounded by numerous capacity (‘bottom-up’) and nationally led (‘top-down’) approaches. This constraints in dispensing core urban development-related means that city initiatives actively contribute to and influence functions. In addition to these limitations, lack of coordination national climate action, while national-level policy frameworks with the national government on urban climate action coupled and institutions cascade down national climate objectives to city with competing urgent urban service provision needs can limit level and empower local actors. regular and consistent funding for climate-related projects. ³ There may be additional scales, such as ‘regional,’ that are applicable in different contexts. These might represent a separate scale in certain contexts or be considered part of ‘subnational’ in others. For simplicity here, only national and subnational scales are identified. 11 Executive Summary and Recommendations Integration of urban climate action into national climate change With urbanization playing a prominent role in the low-carbon strategies can enable city governments to gain sustained transition in LICs and LMICs, there is an urgent need to support from their national government for undertaking climate improve their data and diagnostic capabilities at both city action. A recent assessment of urban climate finance flows by the and national levels. Given the complex interaction between Cities Climate Finance Leadership Alliance (CCFLA) (2021) different sectors and actors in urban areas along with diverging highlights the vastly insufficient amounts of urban climate finance policy and investment priorities, decision makers at both invested in developing countries, including South Asia and SSA. national and city levels need to strengthen their understanding This analysis also determined that national governments financing of low-carbon urban development pathways and the levers to domestic projects were the largest finance providers overall, achieve them. In addition, high-quality data and analytics can playing a crucial role in supporting climate action in urban areas. enable city governments to assess the impacts of city-level Integration of low-carbon urban considerations in national climate climate interventions and effectively communicate their costs change strategies such as NDCs and LTSs can demonstrate and benefits to national governments to facilitate their countries’ long-term commitment to this agenda, ensuring policy integration into national climate change strategies such as predictability and reliable financial support. Explicit inclusion of NDCs and LTSs. urban climate action in funding needs assessments, investment plans, and subsequent finance mobilization strategies in NDCs Limitations of urban diagnostic tools, limited capacities to can facilitate the allocation of funding resources at city level to use them, and low data availability are key gaps in support actions that will deliver the greatest benefits. Similarly, undertaking evidence-based policy processes in LICs and LTS processes can help embed both near- and long-term climate LMICs. While many diagnostic tools are available in developed investment needs at city level into countries’ low-carbon transition countries, there is a significant lack of models that have been priorities and translate them into specific implementation plans calibrated to cities in Africa, Asia, or other developing regions. and financing models. Models often provide limited insights on potential impacts of climate mitigation measures on poverty and equity, or trade- Integration efforts are critical for cities in LICs and LMICs to offs and synergies with other development priorities. They also receive adequate intergovernmental transfers for climate have an uneven capacity to quantify co-benefits of low-carbon action. The volume and flow of intergovernmental transfers interventions. Further, entities at different government levels can significantly impact the scope of climate-related urban often have limited capacity and resources to identify and apply interventions in these cities. Regular and consistent funding appropriate diagnostic tools to address policy questions, from the national budget, underpinned by vertically especially for larger, system-wide interventions and complex integrated planning and policy processes, is a key enabler for projects (e.g., those that require more modelling expertise and cities to implement climate-related projects and attract external support). Cities and national governments also face international funding and private finance. In countries where significant data gaps arising from challenges in compiling GHG climate change is mainstreamed into national development inventories within city boundaries and inconsistent approaches planning, integration of the low-carbon urbanization agenda for tracking climate actions and climate finance flows. These can enhance targeted finance mobilization and facilitate are compounded by the lack of incentives for data collection, national funding allocations to cities for climate action, weak institutional structures, and limited accountability at bringing dependability to intergovernmental transfers. various levels of government. To enhance evidence-based policy processes, a dedicated user Guide for selecting urban diagnostic tools and models Pillar 3: Evidence-based policy processes was developed for this report. This guide can direct users and and integrated MRV systems decision makers toward relevant groups or ‘families’ of urban tools and models to address their policy objectives, depending on the priorities of the diagnostic being undertaken and available resources. It also outlines a set of criteria, such as Robust data, diagnostics, and tracking approaches are crucial sector coverage, technical abilities, and usability and elements for integrating the low-carbon urbanization agenda robustness of models in addressing specific policy-relevant across climate and urban development policy planning and questions in the context of rapidly urbanizing countries, that implementation processes. Consistent data and diagnostics can be used to arrive at a specific model choice. approaches can support vertical integration between city-level climate action and national climate and urban development strategies. In addition, they are critical for facilitating horizontally Integrative solutions and diagnostic integrated planning and implementation of mitigation efforts VI framework across different sectors in cities. Urban diagnostics can provide critical insights to policymakers on the medium- and long-term impacts of urbanization trends and mitigation policies on GHG This report proposes a set of nine integrative solutions to emissions along with their socio-economic implications. Where support policymakers in developing and implementing available, such information can improve the evidence base national climate change strategies that integrate the low- underpinning urban policy decisions and support the scaling up carbon urbanization agenda (Figure ES.4). The report of ambition of national- and city-level climate interventions. discusses how these solutions can help overcome the common integration-related gaps and barriers identified Integrated MRV systems across policy processes and under each of the three pillars of integration, namely government levels enable consistent tracking of GHG integrated policy frameworks and institutional structures emissions, outcomes of urban mitigation actions, and climate (Pillar 1), strengthened finance mobilization (Pillar 2), and finance flows to support decision making. Integrated or evidence-based policy processes and integrated MRV aligned MRV systems ensure the use of consistent systems (Pillar 3). The proposed solutions are cross-cutting methodologies, data, assumptions, and parameters across and applicable across all three pillars. different levels of government and entities and are supported by clear institutional and incentive structures. Reliable and Effective integration of low-carbon urbanization considerations timely collection, consolidation, and analysis of data generated is achieved when national policy frameworks and institutions by such systems can enhance planning and policy design and facilitate vertical and horizontal coordination across all three enable a robust assessment of the country’s progress toward its pillars and when cities are well-equipped and receive support GHG emissions reduction goals. for contributing to national climate goals. 12 Executive Summary and Recommendations This is enabled when: Appropriate institutional frameworks and governance structures facilitate effective coordination between national- Climate change is mainstreamed in national development and city-level entities on such aspects as climate planning planning and budgeting processes to achieve the goals and and policy development, budgeting, implementation, and targets of the country’s national climate change strategies tracking of urban climate action and its impacts through (NDCs and LTSs). aligned or integrated MRV systems. The country’s NDCs and LTSs and associated financing plans Climate policy processes across government levels are reflect low-carbon urban development priorities, including the underpinned by evidence-based decision making that main drivers of the carbon footprint of urban areas and allows for periodic revisions of strategies and gradual related GHG emissions reduction measures. scaling up of the ambition of NDCs and LTSs. Cities’ mandates for climate action are well-established Cities are experienced in developing and implementing and supported by clear policy frameworks that cascade climate change plans that are aligned with national climate down national climate mitigation targets to various change strategies and urban development priorities. government levels. Cities have robust technical and financial capacities and a well- The national government is supporting cities in accessing developed knowledge base on climate mitigation that is domestic and international sources of climate finance regularly updated and communicated to the national level to through dedicated programs and financing mechanisms. support coordinated climate policy processes. Figure ES.4: Integrative solutions across the three pillars Integrated policy Evidence-based policy frameworks and Strengthened finance processes and integrated institutional structures mobilization MRV systems 1 Mainstream climate change in national development planning and budgeting processes 2 Integrate low-carbon growth considerations in the national urban agenda 3 Explicitly consider urban climate action in national climate change strategies 4 Empower city governments and strengthen intergovernmental coordination 5 Enhance communication between national- and city-level on climate action 6 Establish organizational structures & functions within each government level 7 Promote stakeholder engagement 8 Promote collaboration and sharing of knowledge, tools and resources 9 Enhance technical and financial capacity 13 Executive Summary and Recommendations Recommendations Given the sizeable potential in LICs and LMICs to transition to decarbonized, climate-resilient development pathways by pursuing low-carbon urbanization, integrating urban considerations into their national climate change strategies and policies can provide a crucial impetus for broader integration efforts. This report identifies 10 key recommendations to support policymakers and practitioners in their efforts to develop and implement NDCs, LTSs, and other national climate change strategies that effectively integrate low-carbon urbanization priorities: Climate change mainstreaming in national development planning and budgeting 1 processes is crucial for achieving countries’ climate change commitments while also advancing their development priorities. Economy-wide development planning that reflects low-carbon urbanization considerations can help overcome sectoral and institutional silos, avoid policy conflicts, and reduce potential trade-offs between the urban development and decarbonization agendas. Cascading down climate-informed development plans to subnational levels can be an effective vehicle for delivering vertically and horizontally integrated climate action, especially when such plans explicitly consider the financing needs and sources for climate action. Associated climate-informed budgeting processes are equally important to ensure that climate action in urban areas is supported by regular and consistent funding flows (e.g., intergovernmental fiscal transfers, earmarking funding for climate action through conditional transfers to the city level). Mainstreaming of climate action should be reinforced by integrating climate-related performance indicators into national and subnational systems that track progress on development priorities. Integration of low-carbon urbanization considerations in the national urban agenda can 2 harness mitigation potential in urban areas through sectoral and spatial planning processes. First, this integrative solution can strengthen horizontal coordination between climate and urban development policy agendas. It helps ensure that national urban plans consider the GHG emissions impacts of urbanization trends and translate the country’s vision for long-term low-carbon growth into actionable milestones for urban areas. Second, it can augment vertical coordination by cascading down national climate mitigation priorities to city level and providing cities with a foundation to build their climate action plans. Such integration should be supported by a guiding framework for resource allocation to cities to undertake monitorable climate mitigation actions. Explicitly including climate mitigation priorities and targets for urban areas in national climate 3 change strategies can enable their implementation at city level. NDCs or LTSs that integrate low-carbon urbanization priorities should be accompanied by implementation plans that (i) translate priorities into concrete targets and implementable city- level actions, (ii) assign clear roles and responsibilities to subnational governments for their implementation, (iii) include approaches to mobilize and channel climate finance to city level, and (iv) create specific indicators and MRV processes to measure and report on the progress and impact of actions. The enabling environment for urban climate action can be further strengthened by establishing legal frameworks and incentive Manila, Philippines © Andrey Khrobostov / Alamy Stock Photo structures for their consistent enforcement. 14 Executive Summary and Recommendations Empowering city governments and 4 strengthening intergovernmental coordination in overlapping policy areas helps ensure clarity of mandates for urban climate action. Effective climate governance can be achieved by (i) delegating mandates for climate action to city governments for areas within their administrative functions; (ii) coordinating planning and implementation functions across government levels in sectors and areas with overlapping mandates; and (iii) empowering cities to mobilize domestic and international climate finance, including by the targeted use of their OSR. Coordination can be augmented across all government levels by undertaking robust diagnostics of urbanization impacts on national GHG emissions reduction efforts and promoting well-aligned or integrated MRV approaches (e.g., using comparable reporting boundaries across different sectors and jurisdictions, timelines, and indicators to track progress and financial flows). Enhancing communication on climate action between national and city levels improves 5 information sharing and gradually addresses integration barriers. Enhanced communication on urban climate action across government levels can be an initial step toward integration, especially in cases where coordination mechanisms are not yet in place. Consistent top-down communication ensures that city governments are aware of national climate targets and their implication for their jurisdictions, while bottom-up communication provides critical insights on the mitigation efforts undertaken or planned in cities and associated financial needs. Co-creation of NDCs and LTSs with both national and subnational entities engaged in the policy processes relevant to climate action in urban areas can strengthen communication. Clear organizational structures with well-defined roles and responsibilities across government 6 levels ensure that climate-related functions are adequately performed at each level. Climate change-related functions are usually not clearly attributed within and across different government levels in LICs and LMICs. This can weaken inter-governmental coordination, limit knowledge sharing and capacity building, and impede effective execution of climate functions, especially in small and medium cities. Organizational structures supporting climate-related functions with formally defined roles, responsibilities, and accountability can be an important enabler of integrated climate policy processes across government levels. Allocating formal roles on climate change may require establishing new institutional bodies or expanding mandates of existing institutions and continual capacity building. Undertaking stakeholder engagement ensures that climate action in urban areas is consistent 7 with national priorities and locally appropriate and has buy-in of local communities. Multi-level stakeholder engagement is an integral part of coordinated policy processes for enabling integration. It helps leverage cross-sectoral efficiencies and attain strategic alignment between city-level planning and national climate change targets. To promote stakeholder engagement, national governments can facilitate participation of subnational stakeholders in the development of NDCs or LTSs by setting up engagement platforms, organizing technical workshops, or establishing working committees dedicated to cross-cutting Lagos, Nigeria © peeterv / Getty issues of low-carbon urbanization. 15 Executive Summary and Recommendations Collaboration and sharing of knowledge, tools, and resources across government 8 levels and with other stakeholders can support effective implementation of integrated climate policy processes. Tools and resources to mainstream climate change in policy processes (e.g., through modelling of low-carbon urbanization scenarios, identification and assessment of mitigation interventions) and knowledge and technical capacity are key components that can be coordinated and shared across government levels (e.g., through knowledge-sharing platforms). Effective collaboration on data, diagnostic and reporting tools, and sharing expertise on climate-related interventions can support integration by promoting efficient knowledge exchange and streamline planning and reporting efforts. There is an urgent need to enhance cities’ 9 technical capacity and financial expertise for undertaking climate action. Technical capacity to design and implement climate policies and measures targeting urban areas is the backbone of integration. Adoption of integrative solutions should be accompanied by a sustained effort and allocation of dedicated resources to improve climate-related technical capacities across all levels of government. For instance, clear allocation of climate-related roles in city governments can empower designated entities to progressively improve their capacity to undertake climate- related functions in-house, including finance mobilization. Cities can strengthen their capacity to deploy in-depth GHG emissions diagnostics, ensuring more comprehensive coverage of key GHG emissions sources and enhanced understanding of wide- ranging impacts of urban climate mitigation measures. Similarly, cities should augment their financial expertise to develop innovative financing instruments and project modalities (e.g., public private partnerships [PPPs]) to mobilize financing for climate action from private sources and international sources of climate finance. This report identifies numerous areas that require urgent support from the international 10 community to facilitate integration of the low-carbon urbanization agenda into countries’ climate policies and strategies: Support for integration efforts should be prioritized in rapidly urbanizing LICs and LMICs where capacity gaps are most acute. The Readiness Diagnostic Framework proposed in this report can help identify and tailor appropriate integrative solutions to specific country contexts. Promoting knowledge sharing and capacity strengthening across countries, cities, and stakeholders can support policymakers in pursuing integration across the main pillars. Such efforts could also consolidate resources on other aspects of integration such as communication and engagement, capacity building, legal frameworks and tools, and implementation modalities. Tailoring urban diagnostic tools and models to policy contexts of rapidly urbanizing countries and cities can support the integration of climate and urban development policy agendas. Concerted efforts from a broader set of stakeholders, supported by international urban initiatives, development partners, and academia is required to continue building the knowledge base on impacts of urban mitigation action (e.g., improving understanding of the impacts of spatial layout of urban infrastructure on GHG emissions) and exploring opportunities of emerging technologies to reduce data gaps. Luanda, Angola © efired / iStock 16 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Impact of urbanization trends on Urbanization in these regions will be characterized by a 1.1 GHG emissions in rapidly urbanizing substantial increase in the number of cities in addition to developing countries expansion of existing ones. Between 2020 and 2070, the number of cities in LICs is projected to grow far more (76 In 2020, urban areas were home to 56 percent of the global percent) than in UMICs (6 percent). Geographically, this population but contributed approximately 70 percent of global increase will be concentrated in Central and Southern Asia and GHG emissions (Lwasa et al. 2022, UN Habitat 2022a). The SSA, which are projected to add 2,500 and 1,800 cities, global urban population is expected to grow considerably to 68 respectively, by 2070 (UN Habitat 2022a). This anticipated percent of the total population by 2050, with negative urban growth could significantly increase global GHG consequences for the climate. Cities in HICs and UMICs have emissions, driven by an expanding urban footprint, construction been major drivers of global urban GHG emissions, while the and use of new infrastructure and building stock, growth in contribution to emissions from cities in LICs has been negligible. economic activity, and changes in incomes and lifestyles For example, in 2015, cities from developed countries together (adapted from Lwasa et al. 2022). Furthermore, despite low per accounted for almost 86 percent of all global urban carbon capita urban GHG emissions in LICs, the continuous dioxide (CO₂) emissions, cities in LMICs contributed almost 13 agglomeration of economic activity and population in their percent, and cities in LICs accounted for less than 0.2 percent⁴ urban areas coupled with rising incomes and associated (Figure 1.1) (Mukim and Roberts 2023). changes in consumption patterns, may drive up the per capita carbon-intensity of urban dwellers. Since most infrastructure in Most future urban growth is expected to take place in the cities in rapidly urbanizing countries in these regions is yet to developing regions of Africa and Asia. Africa is currently the least be built, urban policy decisions made today will have long- urbanized region in the world but has the highest urban growth lasting implications on these cities’ contribution to future global rate (3.4 percent per year). Consequently, Africa’s urban GHG emissions. Pursuing low-carbon urbanization pathways population is expected to increase exponentially by mid-century, could create new green growth opportunities for these from 587 million people in 2020 to almost 1.5 billion in 2050, countries and cities, enable them to avoid the CO₂ emissions while Asia’s urban population is projected to increase from 2.4 trajectories historically followed by cities in HICs, and prevent billion people to 3.5 billion during this period (Figure 1.2) (UN the lock-in of carbon-intensive development in the long-term Habitat 2022a). (Mukim and Roberts 2023). Figure 1.1: Average CO₂ emissions per capita and share of global CO₂ emissions generated in cities, by country income group, 2015 a. Average CO₂ emissions per capita Tons per year per person High-income Upper-middle-income Lower-middle-income Low-income b. Share of global total (%) CO₂ emissions generated in cities High-income Upper-middle-income Lower-middle-income Low-income Source: Mukim and Roberts 2023. Residential and transportation All sources (restricted sample) Note: For the residential and transportation sectors, the data cover 10,179 cities. For all sources of emissions, the data cover 3,148 cities. In panel a, each marker shows the unweighted average of long-cycle (fossil) CO₂ emissions per capita (measured in tons per year per person) of cities by country income group. In panel b, each marker shows the share of global urban long-cycle (fossil) CO₂ emissions generated in cities classified by country income group. ⁴ It is important to note that Figure 1.1 includes only CO₂ emissions, thereby underestimating the overall level of GHG emissions generated in cities (e.g., methane emissions associated with solid waste management and wastewater treatment represent a significant share of GHG emissions in urban areas in developing countries). 18 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Figure 1.2: Urban population 2020 to 2050 Africa Asia 2050 Europe 2040 2030 Latin America and 2020 the Carribean North America Oceania 0 500 1000 1500 2000 2500 3000 3500 4000 Source: UN Habitat 2022a Urban Population (million) SSA is expected to experience some of the largest urban land Rapid urbanization and its impact on expansion, with its urban area projected to almost double between 1.1.1 cities’ carbon footprint and resilience to 2020 and 2070 (UN Habitat 2022a). Further, cities with climate change populations of less than 2 million people have experienced more declines in urban population densities and higher rates of urban Urban growth is usually associated with poverty reduction land expansion compared to larger cities (Lwasa et al. 2022). and economic development. However, cities in SSA and Despite being home to a sizeable proportion of the overall urban Asia⁵ face numerous challenges in reaping the benefits of population, small- and medium-sized cities in Africa and Asia are rapid urbanization. Cities across both regions have often trending toward lower population densities, resulting in failed to address pressures arising from a growing fragmented and spatially dispersed urban forms—or ‘urban sprawl.’ population on their infrastructure, basic services, land, housing, and environment. Underinvestment in Land-use conversion resulting from urban expansion into infrastructure and services, limited technical and financial forested areas is often permanent and difficult to reverse. capacities, and weak or poorly enforced urban planning Construction of infrastructure on new urban land will lock in frameworks are significantly affecting the livability of cities patterns of energy consumption that will persist for decades and limiting their potential to contribute to inclusive growth (Lwasa et al. 2022), especially in countries with slower (adapted from Ellis and Roberts 2016; Lall et al. 2017; decarbonization of power grids and transportation.⁶ Dispersed Hommann and Lall 2019). These challenges are urban form is typically associated with higher per capita GHG compounded by the fact that over half the urban population emissions arising primarily from energy use (both embodied⁷ is already living or projected to live in smaller cities and and operational) in buildings, service provision, and towns, which typically have the most limited institutional, transportation. For example, in the urban transportation sector, a technical, and financial capacities to address the urgent fragmented urban form results in longer travel distances and needs of a rapidly growing population (Box 1.1) (Coalition for difficulty providing affordable mass transit options, a reduction in Urban Transitions 2021). This section highlights the key the feasibility of non-motorized transportation modes such as characteristics of rapid urbanization in these regions and bicycles, and an increase in private motor vehicle use. In SSA, their implications for cities’ carbon footprint and resilience approximately three-quarters of the urban population already to climate change. reside in the urban peripheries of the largest city of each country. For instance, the average commute distance for Addis Ababa and Nairobi is estimated at 9.6 km and 7.2 km, Urban land expansion respectively, making it challenging to plan for efficient growth through integrated urban and transportation planning (Coalition Globally, on average, urban land areas are increasing at twice for Urban Transitions 2021). Further, urban expansion can lead to the rate of urban population growth, often resulting in the a significant reduction in carbon sinks from loss of tree cover and conversion and loss of agricultural land, forests, and other forests, destroying natural habitats and worsening vulnerability vegetated areas and a reduction in carbon sinks (Lwasa et al. to hazards such as extreme heat and flooding. If current spatial 2022). The anticipated growth in the global urban population growth trends continue, urban population growth and urban land and accompanying increase in urban land area will be area expansion in Africa and Asia, especially in small- and especially high in LICs. medium-sized cities, could significantly increase GHG emissions. ⁵ This report focuses on LICs and LMICs and in Sub-Saharan Africa and Asia. ⁶ In some decarbonization scenarios, a dispersed urban form could eventually achieve a lower carbon footprint with electrification of transportation coupled with decarbonization of electric grids in the longer term. ⁷ Embodied energy is the total energy required to produce a material or product. 19 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Box 1.1: Emergence of small- and medium sized cities as the dominant urban settlement type Cities and towns with fewer than 1 million people accounted for more than half (58 percent) of the global urban population in 2018, according to IPCC (Lwasa et al. 2022). Settlements with fewer than 500,000 people accounted for almost half (48 percent) of the global urban population (Figure 1.3). In Asia, over half (54 percent) of the urban population lives in cities and towns with populations of less than 1 million people. In Africa, by 2050, half the urban population is expected to live in cities with less than 300,000 people (Coalition for Urban Transitions 2021). Small- and medium-sized cities are thus both the dominant and fastest-growing type of urban settlements in Africa and Asia. Figure 1.3: Global population, by area of residence and size of urban settlement in 2018 4000 529 3500 325 9.8% 3000 6.5% 926 Population (million) 2500 42.1% 415 2000 275 3410 1500 41.5% 1000 1750 500 0 Urban population (55)% Rural population (45%) World Population Source: Lwasa et al. 2022 Megacities of 10 Large cities of 5 to Medium-sized cities of Cities of 500,000 million or more (12.5%) 10 million (7.7%) 1 to 5 million (21.9%) to 1 million (9.8%) Cities of 300,000 Urban settlements All settlements with more than to 500,000 (6.5%) with <300,000 (41.5%) 1 million inhabitants (42.18%) Infrastructure deficits and informality Upgrading existing urban infrastructure and constructing new infrastructure using conventional practices and technologies can significantly increase CO₂ emissions, given the massive scale of Urban households in LICs and LMICs have less access to needed investments (Lwasa et al. 2022) urban services such as safe drinking water and proper sanitation than households in cities in UMICs, with access High exposure to climate hazards to services relatively better in larger cities than in small- and medium-sized ones (Mukim and Roberts 2023). Rapidly Cities in LICs and LMICs have the highest overall exposure to six growing cities in LICs and LMICs also have high levels of key climate change-related hazards than cities in HICs—floods, informality, with informal settlements⁸ experiencing the heat stress, tropical cyclones, sea-level rise, water stress, and most acute service deficits. Africa has the lowest level of wildfires (Figure 1.4). While floods pose the highest risk for medium infrastructure provision, with only 54 percent of the urban and large cities, water stress, sea-level rise, and heat stress are population having access to safe drinking water and only the key hazards affecting small and medium cities (adapted from 32 percent to sanitation (UN Habitat 2022a). Approximately Mukim and Roberts 2023). Studies also suggest that some of the 61 percent of Africa’s urban population lives in informal most rapid expansion in urban land areas is occurring in low- settlements, and Africa also has the world’s highest share elevation coastal zones (Mogelgaard et al. 2018), which could of informality in the economy, estimated at 76 percent potentially expose much of the urban population to climate (Lwasa et al. 2022; Coalition for Urban Transitions 2021). To hazards. In addition, extreme weather events such as tropical meet the needs of a burgeoning population and reduce cyclones that are caused by climate change and increasing in service delivery gaps, rapidly growing cities in Africa and frequency and intensity have larger negative impacts on the Asia need to substantially augment infrastructure in their economic activity of cities in these countries than in cities in cities and make considerable investments in new higher-income countries. High rates of poverty and lower levels of infrastructure in emerging ones. Additionally, expanding access to basic services, especially water, electricity, and affordable formal housing will be crucial for tackling sanitation, coupled with low emergency preparedness, make challenges related to urban informality and improving the these cities less resilient to climate change-related stresses and quality of life of urban dwellers. shocks (adapted from Mukim and Roberts 2023). ⁸ According to UN Habitat, informal settlements are residential areas where 1) inhabitants have no security of tenure regarding the land or dwellings they inhabit, with modalities ranging from squatting to informal rental housing, 2) the neighborhoods usually lack, or are cut off from, basic services and city infrastructure, and 3) the housing may not comply with current planning and building regulations and is often situated in geographically and environmentally hazardous areas (UN Habitat 2015). 20 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Figure 1.4: Exposure to climate change-related hazards, by city size Average weighted overall climate change-related hazard exposure, by city size and country income group Climate hazard exposure score Large cities Medium cities Small cities High-income Upper-middle-income Low-and lower-middle-income Note: The figure reports the mean projected climate hazard exposure scores for cities that belong to a given type. Small, medium, and large cities are those that in 2015 had a population of less than 50,000–199,999; 200,000–1.4999 million; and 1.5 million or more, respectively. Source: Mukim and Roberts 2023. Pursuing low-carbon urban growth in Given the pace of urban growth in these cities, early and urgent 1.1.2 developing countries is critical for the climate action is crucial. The design and spatial organization of climate transition infrastructure such as buildings and transportation networks shape the overall urban form in cities over time. Since such Poorly managed urban development in LICs and LMICs results infrastructure has high capital costs and operational lifetimes in a rapid increase in urban land area and sprawl, proliferation spanning several decades, lock-in of carbon-intensive of informal urban settlements, overburdened infrastructure, infrastructure and urban form is difficult and expensive to and deterioration in the quality of life of urban dwellers. reverse. Early action by (i) adopting integrated urban spatial Additionally, insufficient or poorly enforced urban planning frameworks that promote energy- and resource- development regulations, underdeveloped markets, efficient urban development, (ii) embracing affordable low- investment gaps, and capacity constraints coupled with limited carbon technologies, (iii) creating enabling conditions for access to, and awareness of, affordable low-carbon solutions electrification of all urban services, (iv) improving wastewater could lock in carbon-intensive urban form and infrastructure. and solid waste management infrastructure, and (v) preserving This would worsen congestion and air pollution in these cities and managing existing green and blue assets can be cost- while increasing their climate vulnerability and overall carbon effective in the near-term and lead to longer-term savings by footprint. Even though CO₂ emissions from these cities optimizing energy use and future investment needs (adapted currently is less than a quarter of global urban CO₂ emissions, from Lwasa et al. 2022). Pursuing low-carbon urban growth can this share is expected to more than double by 2050 (to 56 also help address immediate local priorities such as reducing percent) if current urbanization trends continue (Mahendra et traffic congestion, curbing air pollution, enhancing public al. 2021). Pivoting away from high GHG emissions trajectories health, and improving overall productivity of urban areas. historically followed by cities in HICs and pursuing low-carbon Moreover, reducing energy demand and promoting resource urban development are essential to contain future increases in efficiency can reduce the climate vulnerability of cities to global GHG emissions. However, cities in LICs and LMICs face extreme heat, droughts, and water scarcity. numerous constraints in acting fast enough to moderate their GHG emissions trajectories, which, if left unchecked, may eventually offset any reductions in global emissions made by 1.2.1 Need for system-wide urban transformation cities in HICs and fail to limit global warming to 1.5°C (adapted from Mukim and Roberts 2023). With cities accounting for over two-thirds of future GHG emissions, urban areas will be pivotal in meeting global Opportunities and challenges in climate change goals and country climate priorities if 1.2 advancing low-carbon growth in cities current urbanization trends continue. The transformation of in rapidly urbanizing countries urban systems will have a significant impact on global net- zero emissions trajectories. Several cities are already acting Cities in rapidly urbanizing LICs and LMICs have a unique on this opportunity by adopting ambitious commitments to opportunity to avoid conventional urban development reduce GHG emissions (Box 1.2). Urban areas are complex patterns by proactively making climate-informed choices systems with multiple interdependent sectors that about their urban infrastructure and its spatial layout. contribute to infrastructure and service provision. As a According to IPCC, rapidly growing small- and medium- result, realizing and implementing these targets at the pace sized cities, whose urban form is still evolving and where and magnitude needed to meet global net-zero emissions most of the urban infrastructure is yet to be built, hold some goals will require coordinated efforts and integration of of the highest climate mitigation potential (Seto et al. 2014). sectors, strategies, and innovations (Lwasa et al. 2022). 21 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Curbing urban expansion can facilitate the protection of Box 1.2: City-level climate mitigation ecosystems such as forests and wetlands, which soak up commitments excess rainwater and prevent runoff, help avoid locating settlements in risk-prone areas, and reduce vulnerability to flooding and extreme precipitation. Adopting resource-efficient At least 826 cities and 103 regions across six technologies and passive design features in buildings can continents that are home to 846 million people, promote efficient water use and improve thermal comfort, representing 11 percent of the global population, reducing heat stress during heat waves. Adopting green have adopted net-zero emissions targets, either infrastructure such as green roofs and increasing urban tree economy-wide or targeting a specific sector (e.g., cover also have dual benefits (Sharifi 2021). transportation, buildings) or emissions scope (e.g., scope 1, or both scope 1 and 2)⁹ (Lwasa et al. 2022). In some countries, the share of such Key challenges in avoiding rapid growth of 1.2.2 cities and regions has reached a critical mass, GHG emissions and risk of carbon lock-in representing more than 70 percent of their total population. These commitments range from Curbing a significant increase in GHG emissions and avoiding ‘carbon neutrality’ or net-zero GHG emissions locking in GHG emissions-intensive development may, however, targets, which entail near-elimination of cities’ be particularly challenging in rapidly urbanizing LICs and LMICs, own direct or electricity-based emissions (and where urbanization pressures are magnified by the urgency to could include some type of carbon offsetting), to simultaneously achieve multiple development priorities. Urgent more stringent emissions reduction goals. climate action in such contexts is primarily hindered by financing Currently, 43 percent of urban areas with net- gaps, institutional and technical capacity constraints, and limited zero emissions targets have also adopted availability and knowledge about low-carbon solutions. Pursuing associated action plans, while almost a quarter low-carbon urbanization in these countries would require have integrated net-zero emissions targets into developing and strengthening policy frameworks that are crucial formal policies and legislation. Moreover, for advancing both urban development and climate-related thousands of urban areas have adopted priorities (e.g., spatial planning frameworks, urban design renewable energy-specific targets for power, regulations, building codes) to lay the foundation for more heating/cooling, and transportation, and about ambitious climate-related policies in the medium-to-long-term. 600 cities are pursuing 100 percent renewable Similarly, in the near-term, these cities can pursue investments energy targets, with some cities in developed that meet their immediate development needs yet result in a countries (e.g., Basel, Reykjavik) already lower carbon footprint without compromising affordability or achieving them. access (e.g., public housing incorporating passive design Source: Lwasa et al. 2022; C40 2021. techniques to reduce energy use, improving waste collection and segregation to facilitate recycling) and over time invest in more ambitious and expensive low-carbon infrastructure and solutions (e.g., net-zero buildings, gas-to-energy systems in landfills, Historically, urban climate action has been addressed through increasing circularity of the urban economy). Some key individual infrastructure sectors such as buildings, challenges that need to be considered when developing and transportation, and waste, mainly to align with city-level adopting low-carbon urban development trajectories for these governance structures (World Economic Forum 2022). countries are briefly discussed below. Complementing sectoral climate mitigation measures by leveraging cross-sectoral or system-wide synergies in urban areas to advance actions that have cascading effects across key emissive sectors (e.g., transportation, energy, buildings, land use) can help achieve deep GHG emissions reductions (Lwasa et al 2022). Evidence from a systematic scoping of urban solutions shows that the GHG emissions reduction potential of integrating measures across urban sectors is greater than the net sum of individual interventions (Lwasa et al. 2022). Key areas of integration are renewable energy, electrification, and optimization of demand for energy in transportation, heating, and cooking. The relationship between urban form and energy demand is another important nexus. In addition to reducing travel demand and energy use in urban service provision, the efficiencies introduced by integrated urban spatial planning approaches can reduce GHG emissions from embodied carbon in construction material. Deploying strategies that combine electrification with energy demand reduction through a compact and walkable urban form can accelerate decarbonization of cities. Similarly, conservation and restoration of terrestrial, freshwater, and coastal ecosystems in urban areas can generate multiple benefits, such as enhancing food security and biodiversity conservation while protecting carbon sinks. Since numerous natural and man-made systems interface in urban areas, multi-sectoral and system-wide actions can facilitate both climate mitigation and adaptation. For instance, in addition to reducing GHG emissions from an expanding urban footprint, compact and mixed-use urban development approaches can contribute to climate resilience. Godar, Ethiopia © GlobalP / iStock ⁹ Scope 1 emissions are direct emissions from owned or controlled sources, and scope 2 emissions are indirect emissions from the generation of purchased energy (Source: WRI/C40 2014). 22 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Rapid physical expansion of cities and weak urban Given the scale of informal urban settlements in developing spatial planning mechanisms countries, upgrading these settlements to improve the quality of life of their residents through the construction of Spatial planning policies, such as land-use and zoning new infrastructure could result in a significant increase in regulations that influence the urban footprint and built form, GHG emissions if conventional practices and technologies have significant potential to curb both land-use change and are used. On the other hand, informal settlements could energy-related GHG emissions. However, urban spatial contribute to significant GHG emissions reduction if they planning mechanisms are typically lacking, weak, or poorly are upgraded in a low-carbon manner (Lwasa et al. 2022). enforced in most cities in Sub-Saharan Africa and Asia. While Addressing the current infrastructure deficits in these several cities in these regions are working to strengthen their settlements—by deploying affordable lower-carbon spatial planning frameworks, these efforts are in nascent stages. technologies and planning approaches and creating policy Countries and cities that have not adopted robust spatial and incentive structures to further increase their planning mechanisms or that have weak or poorly enforced accessibility and market penetration—provides spatial policies cannot contain urban expansion or harness the opportunities to ‘leapfrog’ to low- or zero-GHG emissions efficiencies arising from compact urban growth and risk locking systems and structures. For example, adopting energy- in a carbon-intensive urban form. For example, policies to efficient housing solutions that incorporate such measures stimulate new development in urban areas by increasing the as passive design, use of renewable energy, and improved development potential of urban land may lead to a GHG waste management can enhance access to services while emissions-intensive urban form in the absence of policy and realizing co-benefits by improving air quality and public regulatory frameworks guiding such growth (e.g., integrated health. Furthermore, these efforts can leverage the existing land-use and transportation plans). Similarly, lack of spatial high-density and mixed-use nature of these settlements to planning frameworks in urban areas with limited development promote a more compact urban form and curb urban potential or high land prices in central neighborhoods could expansion (UN Habitat 2018). result in new development largely locating in urban peripheries, leading to urban sprawl. Concentration of much residential Rapid growth in carbon-intensive transportation modes development in the urban periphery could hinder future mixed- use development or affect the feasibility of low-carbon In recent years, a rapid increase in motorization has transportation modes such as bicycles or public transit. significantly increased transportation-related GHG emissions in LICs. While emissions from the transportation sector are Low access to electricity in urban areas growing, access to public transportation is declining considerably. With limited access to efficient public Currently, on average, only 58 percent of the urban population in transportation systems, most urban residents in LICs rely on LICs has formal access to electricity and, even in those cases, informal transportation, which accounts for up to 95 percent people experience frequent and regular power outages, with as of all public transport trips in African cities. The projected many as 25 outages per month in South Asian cities and every day increase in GHG emissions in the transportation sector will in African cities (Westphal et al. 2017). Unreliable electricity supply be primarily driven by the mismatch between infrastructure drives urban dwellers to use inefficient fossil fuel-based options being built and what is needed. While walking is the most such as diesel generators and kerosene lamps to meet their important transportation mode in African and Asian cities, power needs, contributing to higher GHG emissions. The typically accounting for between 35 and 90 percent of trips expansion of urban services and associated energy demand in made, most infrastructure investment is directed toward these cities, coupled with already increasing energy consumption supporting cars and two-wheeler transportation modes. and population growth, will likely increase GHG emissions if the These transportation methods currently account for 86 power supply doesn’t keep pace with demand and national percent of all vehicles in LICs but only 29 percent of trips, electricity grids are carbon intensive (Westphal et al. 2017). This can while receiving 62 percent of transportation investment. In also significantly limit the deployment of electrification solutions contrast, in cities where walking, cycling, and public throughout various urban sectors. transportation account for about two-thirds of trips made, these modes received only one-third of transportation Acute service delivery gaps in informal settlements funding (Venter et al. 2019). According to UN Habitat, 1 billion people live in informal Untapped mitigation potential in the waste sector settlements globally. SSA has the highest concentration of urban dwellers living in informal settlements (59 percent), The urban waste sector is a significant contributor to GHG followed by Asia (28 percent) (UN Habitat 2018). There are emissions, particularly methane (CH₄), and the second several factors that limit the carbon footprint of informal largest contributor to global urban GHG emissions after the settlements, which is generally lower than that of other energy sector (Lwasa et al. 2022). Emissions in this sector parts of cities with conventional housing and infrastructure are primarily driven by open burning of waste and waste (UN Habitat 2018; City Climate Finance Gap Fund 2023): disposal in landfills without landfill gas capture systems. LICs account for approximately 5 percent of globally Lacking conventional infrastructure and basic services generated waste, which is projected to increase more than such as durable housing, water supply, and sanitation, threefold by the 2050s (Kaza et al. 2018). The fastest informal settlements generally consume less energy. growth in waste generation is expected in SSA and South Because of limited or no access to formal electricity, use Asia, where most of the waste is managed through open of appliances and systems such as space heaters and dumping (City Climate Finance Gap Fund 2023), which water heating and cooling, which are the primary drivers contributes to air, water, and soil pollution. A rapidly of energy demand in buildings, is low. increasing urban population with rising incomes and resource-intensive consumption patterns could exacerbate A high density of dwellings and other structures often waste management challenges in LICs, where safe waste constructed using locally available temporary or recycled collection and disposal is already limited, contributing to a material is typically less carbon-intensive compared to formal significant increase in CH₄ emissions. Improving the rate of settlements that use conventional building materials such as recycling and promoting circular economy approaches are concrete and steel. The density of informal settlements also often challenging, as these cities lack basic waste collection contributes to containing their physical footprint. services and infrastructure. 23 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Lagos, Nigeria © peeterv / iStock Lack of strong building regulations This will also contribute to creating and strengthening institutional, regulatory, and market conditions to drive low- carbon choices and stimulate necessary public and private The buildings sector accounts directly and indirectly for 30 investment flows. percent of the energy consumed globally, including almost 55 percent of electricity consumption (GlobalABC/IEA/UNEP 2020). The carbon footprint of buildings depends on a Enabling the urban low-carbon transition 1.3.1 combination of factors such as the need for cooling and through vertical and horizontal integration heating, energy mix, and energy intensity of equipment and appliances. With substantial new building stock being constructed in urban areas in LICs and LMICs to Given the complex and multi-sectoral nature of urban systems, accommodate growing urban populations, cities need realizing ambitious GHG emissions reductions and system- building design regulations that require a combination of wide transition in urban areas requires contributions from measures that are both passive (daylight optimization) and public, private, and non-state actors (e.g., city governments, active (energy efficiency requirements for appliances such as public transit agencies, water utilities, power distribution water heaters) to reduce energy demand. However, many companies, private developers, equipment manufacturers), countries lack building regulations or face challenges with each playing a unique role. Additionally, since many urban enforcing them. In cases where building regulations are mitigation actions go beyond cities’ jurisdiction and are linked enforced, energy performance requirements are either absent with national-level climate actions and the country’s long-term or not mandated. Where such regulations exist, effective vision for decarbonized development, they need to be policies are needed to support market penetration of coordinated with various levels of government (e.g., ministry of affordable energy-efficient/low-carbon equipment and environment, ministry of planning, ministry of finance, state- appliances. In addition, policymakers and building owners level entities). For instance, undertaking large and complex need more knowledge about the energy performance of low-carbon urban infrastructure projects are often beyond the different solutions, the capacity to deploy them, and financial capacity of local jurisdictions, institutions, and budgets. incentives for undertaking such investments. The lack of Electrification is another example where actions at different energy performance requirements for buildings and policies levels of government and across sectors must be coordinated supporting their uptake could lock in energy-intensive (e.g., development of power and transportation infrastructure building stock in these countries for decades. to enable the deployment of EVs). Coordinated efforts across urban jurisdictions, transit agencies, and utilities and collaboration with national and regional governments and local Role of multi-level climate governance stakeholders are important for mobilizing institutional, 1.3 in harnessing urban climate action technical, and financial resources. As such, effective coordination of efforts is essential for Rapidly urbanizing cities in LICs and LMICs have significant planning and implementing integrated urban climate action. potential for integrating low-carbon growth considerations in This can be facilitated by policy frameworks, institutional earlier stages of development, which could prevent carbon structures, and financing and tracking mechanisms that are lock-in and enable them to shift toward net-zero GHG integrated vertically (across different levels of governments) emissions in the longer term. However, they face a range of and horizontally (across relevant sectors) (Figure ES.1). Vertical challenges in undertaking climate mitigation action. integration involves aligning and coordinating climate policies, Planning and implementing comprehensive and ambitious strategies, and implementation (e.g., NDCs, LTSs, city-level sectoral and system-wide climate mitigation activities are climate action plans) across different government levels, complex processes that require political commitment and leveraging the potential of each through collective efforts and follow-through, buy-in of stakeholders, access to finance promoting top-down and bottom-up information exchange. and financing instruments, and integrated action across Horizontal integration involves coordinating efforts across sectors and actors. Developing and strengthening government ministries and sectoral departments (e.g., urban, institutional structures, governance frameworks, and transportation, energy, water, environment) and external mechanisms for cross-sectoral coordination across multiple stakeholders (e.g., academia, business and industry, private policy domains will be crucial for enabling and accelerating investors, non-profit organizations, citizen groups) (Adapted rapid decarbonization in cities. from C40 2020). 24 Chapter 1: Pursuing low-carbon urban growth in developing countries is critical for the climate transition Multi-level climate governance is key for planning Augmenting capacities of cities to undertake and implementing urban mitigation action integrated climate action The IPCC Special Report on Global Warming of 1.5°C (SR1.5) The effectiveness of multi-level governance in advancing identified multi-level climate governance¹⁰ as an enabling integrated climate action depends on the capacity of individual condition that facilitates systemic integration and entities (e.g., national, state, and city governments) to develop transformation to keep global temperature rise below 1.5°C and coordinate mitigation action within their jurisdictions. (Lwasa et al. 2022). Climate goals at regional, national, and Capacities of city governments in developing countries to plan international levels are most effective when local governments and implement urban mitigation action are especially are involved in their creation and implementation along with constrained. Smaller urban settlements that may dominate the higher-level actors (Fuhr et al. 2018; Kern 2019; Hsu et al. urban landscapes of LICs and LMICs need targeted 2020). Smoke and Cook (2022) argue that the potential coordination and support from regional and national entities. A comparative advantage of subnational governments in 2022 analysis by the NDC Partnership¹¹ states that between planning for public functions within their territories in an 2018 and 2022, one of 10 requests for support received were integrated way is highly relevant to climate change. They from cities and sub-national governments, about half of which suggest that subnational governments, regardless of their were from SSA. Further, 70 percent of these requests sought current role in climate-informed planning and/or investments, technical assistance related to policy, strategy, legislation, may often have a better sense of how such interventions can knowledge products, monitoring and evaluation (M&E), be synergistically planned and implemented in specific budgeting, and investments (NDC Partnership 2022). locations to reduce carbon footprint, enhance resilience, or Addressing these capacity gaps is crucial for cities to yield other co-benefits. Lastly, the involvement of governments productively participate in multi-level governance structures. at multiple levels is crucial for cities to plan and implement GHG emissions reduction targets (Seto et al. 2021). When actors Governments need easy-to-use assessment frameworks that can work across multiple scales of governance, urban interventions support policymakers and practitioners to identify the main gaps can have cascading effects across sectors and help reduce and barriers for integration at different levels and those related to emissions outside a city’s administrative boundaries. Currently, capacity at the city level. Such a context-specific diagnostic can multi-level climate governance frameworks and structures are then be used to create a roadmap that takes a systematic and either not in place, non-functional, or in nascent stages in many staged approach to addressing the issues identified. The LICs and LMICs. Concerted efforts are needed to establish and subsequent chapters of this report propose such a diagnostic strengthen such frameworks to enable these countries to framework and illustrate how it can be applied to a specific pursue low-carbon urbanization. governance context to identify tailored issues and solutions. Kigali, Rwanda © narvikk / iStock ¹⁰ Multi-level governance is defined as a framework for understanding the complex interaction of the many players involved in GHG generation and mitigation across geographic scales—the ‘vertical’ levels of governance from neighborhoods to national and international levels, ‘horizontal’ networks of non-state and subnational actors at various scales, and the complex linkages between them. This more inclusive understanding of climate governance provides multiple pathways through which urban actors can engage in climate policy to reduce emissions (Lwasa et al. 2022). ¹¹ The NDC Partnership supports countries in implementing their NDC—commitments made by countries under the Paris Agreement to reduce national GHG emissions and adapt to the impacts of climate change. 25 Chapter 2. National climate change strategies lack robust consideration of urban climate action With urban areas in developing countries expected to be significant drivers of GHG emissions growth, it is urgent to Box 2.1: NDC and LTS: Key country-specific factor the long-term impacts of urbanization and near-term instruments for achieving Paris Agreement goals efforts cities are taking to pursue low-carbon growth into countries’ climate planning efforts. Undertaking integrated The Paris Agreement, a legally binding international mitigation action through coordinated planning, target treaty on climate change, requires each country to setting, policy development, implementation, and monitoring periodically communicate, through an NDC, its across different levels of government can elevate the urban contribution to global GHG emissions reduction climate action agenda to the national level. For instance, this efforts to achieve the Agreement’s goals. The can help ensure that sectors or measures prioritized for process is complemented by an ‘ambition ratcheting mechanism’ that allows each country to take stock of mitigation action at the city level based on local conditions progress achieved every five years and offer more are also prioritized in national climate change strategies such ambitious actions through an update to its NDC. as NDCs. National climate planning that reflects the impact of transformative actions in urban areas such as climate- Article 4.19 of the Paris Agreement states that all informed spatial planning can help shape national countries “should strive to formulate and decarbonization pathways. In turn, countries’ LTSs can communicate long-term low greenhouse gas (GHG) create the enabling conditions to avoid future emissions by emission development strategies (LTS) mindful of accounting for the risks of locking in carbon-intensive urban the long-term goals of the Paris Agreement.” This infrastructure and built form that could create significant was reiterated at the Conference of Parties (COP) socio-economic barriers for GHG emissions reduction in the 27, the 2022 United Nations Climate Change longer term. Incorporating urban mitigation considerations Conference, by its decision 1/CMA4, which urges and actions into the development of, and subsequent Parties to communicate new or updated LTSs updates to, medium- and long-term national climate aimed at enhancing contributions to global net-zero strategies could help scale up their ambition and potentially emissions by or around mid-century, aligned with the best available science and with their NDCs, reduce efforts needed to decarbonize other sectors. More considering different national circumstances. importantly, by aligning and integrating city-level climate measures with efforts at the national level, city governments can acquire the mandates and resources to implement them and benefit from capacity and financial support from higher Status of integration of urban considerations levels of government. 2.1.1 in NDCs NDCs and LTSs as bridges between With most countries still in the process of developing their long- 2.1 national and urban decarbonization goals term decarbonization strategies, NDCs produced in the first two rounds reflected a shorter-term view on reducing GHG emissions and showed a lack of actions at the scale and pace The broad landscape of climate strategies at multiple levels necessary to achieve the Paris Agreement’s long-term of governance typically includes national climate change temperature goals. Although there is a general increase in the action plans, sectoral decarbonization or climate resilience level of ambition in the updated NDCs submitted in the latest strategies or plans, and state/province and city-level climate round (before COP27 in 2022), the estimated reduction in action plans. Within this broad landscape, NDCs and LTSs emissions falls far short of what was established under the Paris Agreement.¹² The policies and laws adopted or planned stand out as critical instruments that (i) consolidate and in countries and the investments made to achieve inadequate communicate a country’s vision for long-term low-carbon short-term targets could create technical and economic development (LTS) and (ii) support a timely climate obstacles to achieving Paris Agreement goals and impose transition through short- and medium-term targets, policies, higher costs to economies and societies in the long run. To and actions (NDC) (Box 2.1). According to IPCC, pursuing address this issue, the next round of NDCs (to be submitted by horizontal and vertical integration to reflect the impact of 2025) needs to reflect actions that could lead to the substantial urbanization and potential urban mitigation measures on reduction in emissions required by 2030 to stay on track to national GHG emissions trajectories can help (i) leverage limit global temperature rise to well below 2°C. Establishing spillover effects of urban mitigation measures in achieving climate-compatible, long-term development visions and national (and global) climate goals and (ii) stimulate the associated transformation pathways can help national and creation of well-aligned multi-level climate policy and subnational governments identify and sequence actions, which institutional frameworks in countries. NDCs and LTSs can can then be integrated into shorter-term commitments in thus be important instruments that link national subsequent NDC submissions. decarbonization goals with efforts to advance low-carbon urban growth. Importantly, they can send clear signals both Urban content in current NDCs nationally and to the international development community on specific needs for urban climate action. Including low- A 2022 UN Habitat analysis of the urban content of 193 carbon urbanization considerations in NDCs and LTSs can NDCs submitted between March 2017 and June 2022 enable the identification and tailoring of mitigation actions showed that the overall number of NDCs with urban that can be implemented in urban areas; reflect local content increased marginally (64 percent in 2022 from 60 priorities, capacities, and needs in national climate percent in 2017). The nature of this content ranges from a planning; and facilitate securing finance for urban climate high-level description of climate vulnerability and GHG action. Moreover, it can foster innovative and ambitious emissions from urban areas to specific actions and targets mitigation solutions in cities with greater capacities. dedicated to urban sub-sectors (UN Habitat 2022b). ¹² Full implementation of all latest NDCs (including conditional elements) is estimated to lead to a 3.6 percent emissions reduction by 2030 relative to 2019 levels; taking this into account, the best estimate of peak temperature increase in the 21st Century is in the range of 2.1°-2.9°C, depending on underlying assumptions (UNFCCC Secretariat 2022a). 27 Chapter 2. National climate change strategies lack robust consideration of urban climate action For example, Indonesia’s NDC identifies a series of measures to reduce GHG emissions in the sanitation sector that will need to be implemented in urban areas but doesn’t include specific Box 2.2: Role of LTSs in decarbonizing targets (Republic of Indonesia 2022). In contrast, Colombia’s development NDC has specified at-source separation of solid waste in municipalities with populations of less than 20,000 individuals “LTSs are central to achieving ambitious long-term through the creation of 38 recovery organizations national, subnational, sectoral, and global climate (Government of Colombia 2020). Between 2017 and 2022, the goals, and also to guide near-term investment number of NDCs with specific actions dedicated to urban sub- decisions in both the public and private sectors. sectors or where urban sectors are identified as a priority LTSs lay out a path for countries to decarbonize in increased from 14 percent to 24 percent. While this increase is a timely manner to keep global warming well below a step in the right direction, the analysis highlighted a large 2°C (while pursuing efforts to limit it to 1.5°C), build gap between mitigation responses and mitigation-related risks climate resilience, avoid costly stranded assets, of urban growth. Most NDCs (74 percent) with urban content and facilitate an orderly transition for all sectors of focus on mitigation responses and only about half (47 percent) the economy and society. This not only minimizes on mitigation-related risks, making it difficult to track progress climate change impacts and vulnerabilities but and evaluate the impact of mitigation responses. Further, only opens up new opportunities. LTSs should thus be about one of four NDCs include mitigation responses for key reference points for countries’ climate and specific urban sub-sectors such as energy, transportation, and development planning and policy reforms, including sanitation, and very few include responses in other key urban updates to NDCs.” sub-sectors that have high emissions reduction potential, such as land-use change. Lastly, the risks and responses are MDB Principles for Long-Term Strategy (LTS) Support 2021. mentioned largely at the national level instead of at urban levels. Overall, the analysis shows that there is significant LTSs enable a whole-of-economy approach to potential for raising the climate mitigation ambition of NDCs by decarbonizing development by considering short-to- including more scaled-up urban mitigation action and aligning medium-term targets in the context of a longer-term it with already identified mitigation risks and responses at the pathway and facilitating development of new national level (UN Habitat 2022b). economic models. By using an economy-wide approach, LTSs can help define critical short- and medium-term actions to support timely reform of Benefits of aligning urban climate action and national existing policies to facilitate a just transition for climate priorities affected workers and communities, address social and fiscal challenges, and lift market and regulatory Making concerted efforts to align climate mitigation barriers to needed investments. Governments can priorities and action at the urban level with national climate use LTSs as overall development strategies with change strategies such as NDCs can have several benefits:· sequential and coordinated sectoral measures and policies to facilitate a transition of their economies Aligning policies can increase the contribution of urban toward net-zero emissions by around mid-century. areas to achieving national climate goals. Alignment with NDCs can help cities access domestic public and private financing for climate projects. Limited inclusion of urban climate action in national climate Several LICs and LMICs have prioritized harnessing the strategies or misalignment between national- and city- economic potential of urbanization to meet their long-term level strategies is likely to constrain cities’ ability to mobilize climate finance. development goals. As discussed in Chapter 1, given the anticipated magnitude of increase in the urban footprint of Robust climate policies and concrete mitigation these countries, pursuing carbon-intensive urban development measures at city level that are aligned with both could hinder their long-term climate goals, locking in GHG national goals and local development needs can send a emissions for several decades because of the long lifespan of strong signal to investors and development partners urban infrastructure (Tong et al. 2019). Such carbon-intensive and help mobilize external resources. urban growth will increase the global cost of decarbonization and require greater effort from countries to transition to Such policy alignment can be achieved by promoting decarbonized development in the longer-term. LTSs can be collaboration across various government levels and should key instruments for countries to identify early actions and be accompanied by clearly defined roles and mandates for longer-term enabling conditions to avoid carbon lock-in and urban areas for delivering NDC priorities. stranded assets in urban areas. Role of LTSs in enhancing linkages LTSs translate economy-wide climate and development 2.1.2 between long-term urban development objectives into concrete actions by defining clear sectoral and decarbonization goals decarbonization pathways for a country, especially for key emissive sectors, in line with national development priorities. An LTS describes a country’s long-term strategy for Assessing the GHG emissions trajectories of different decarbonized, climate-resilient development and lays out the urbanization scenarios (e.g., business as usual vs. low carbon) nature and sequence of the physical transformations required as part of LTS development can facilitate (i) the formulation of to achieve it, including medium- and long-term milestones¹³ concrete low-carbon urban development pathways consistent (Box 2.2). LTSs define short- and medium-term actions with relevant sectoral decarbonization strategies and (ii) including those that are urgent and synergistic with other identification of city-level mitigation action aligned with interim development objectives that must be taken to avoid carbon LTS targets that can feed into these sectoral decarbonization lock-in and opportunity costs of delayed action. It also identifies strategies and their implementation plans. In countries that conditions, policies, and regulations that enable lasting socio- don’t have an LTS, developing low-carbon urbanization economic transitions toward countries’ long-term net-zero emissions goals. As such, LTSs can inform governments’ plans pathways can trigger and inform their development. In some for policy reforms, public investment, and mobilization of developing countries, a robust long-term net-zero strategy for financial resources from various sources to deliver the climate the capital city or a group of major cities can deliver a transition. In fact, detailed LTSs can serve as a basis for substantial share of GHG emissions reduction needed in their domestic policy design and inform economy-wide and sectoral national LTSs. It can also establish models for replication in development strategies, including for urban development. other cities. ¹³ This interpretation is in line with the shared MDB Principles for Long-Term Strategy Support (2021), announced at COP26 in 2021. 28 Chapter 2. National climate change strategies lack robust consideration of urban climate action Urbanization considerations in LTSs Box 2.4: Urban mitigation in India’s Long-Term The integration of urban climate action into LTSs remains Low-Carbon Development Strategy limited. While several countries are currently establishing their LTSs, as of July 2023, only 66 had submitted their India’s recently published Long-Term Low- strategies to the UNFCCC. Of these, three are in South Asia Carbon Development Strategy (LT-LEDS) (India, Nepal, and Sri Lanka) and six in Sub-Saharan Africa identifies seven key transitions to low-carbon (Benin, Ethiopia, The Gambia, Nigeria,¹⁴ South Africa, and development pathways including promoting Zimbabwe).¹⁵  All these LTSs include mitigation options and adaptation through urban design, energy, and measures in key urban sub-sectors such as buildings, material-efficiency in buildings and sustainable energy supply, transportation, and waste, yet several have urbanization. The LT-LEDS recognizes that India’s identified urban areas, settlements, and the housing sector cities currently contribute substantially to national as only adaptation priorities, not recognizing their GHG emissions, and projected population and significant mitigation potential or risk of carbon lock-in economic growth trends for urban areas will be (UNFCCC Secretariat 2022b). However, all LTSs have the main drivers of future GHG emissions highlighted the importance of subnational governments, increase. It also highlights the urban buildings sector as a key area for mitigation action since it including cities, in achieving their long-term goals, accounts for more than 40 percent of energy particularly in areas within their jurisdictions such as spatial consumed in cities. India’s LT-LEDS identifies city and urban planning, housing, transportation infrastructure planning, buildings, and municipal services as the development, and waste collection and management three areas that need a directional shift to (UNFCCC Secretariat 2022b). Boxes 2.3, 2.4, and 2.5 promote low-carbon urbanization. Climate- provide insights on Ethiopia, India, and Nigeria, responsive urban planning, constructing energy- respectively, which have included low-carbon urbanization efficient buildings, and improving efficiency of considerations in their long-term decarbonization visions. It municipal services including water supply, waste is important to note that challenges in integrating urban management, and sewage treatment are climate action into LTSs may differ from those for NDCs, as considered key approaches. The strategy has there are more uncertainties, limited understanding of cost also identified existing policies and programs to implications, and more trade-offs to consider given the advance these shifts. economy-wide nature and longer time horizons of LTSs. Source: Government of India 2022. Box 2.3: Low GHG emissions interventions for urban areas in Ethiopia’s LTS Ethiopia has recently published its LTS, Box 2.5: Nigeria’s long-term vision for its cities ‘Ethiopia’s Long-term Low Emission and Climate Resilient Development Strategy (2020–2050), Nigeria has published the ‘2050 Long-Term which outlines net-zero and climate-resilient Vision for Nigeria (LTV-2050)’ as a preparatory development pathways for six sectors—energy, step toward the development of its LTS. LTV- transportation, agriculture, forestry and land use, 2050 outlines eight sectoral ‘visions’ that need to waste management, and industrial processes and be realized to achieve sustainable development product use. While the strategy doesn’t include goals, one of which focuses on ‘Urban an overarching assessment of the contribution of Settlements.’ LTV-2050 emphasizes that Ethiopia’s urbanization trends to GHG emissions Nigerian cities will play a key role in the country’s growth, the pathway for the sanitation sector climate change mitigation efforts because of an considers the impacts of a growing urban increase in GHG emissions from a growing urban population and changing consumption patterns population and production activities. The vision is on waste generation. Additionally, most of the low-emissions interventions identified for the for cities to reduce their carbon footprint by 50 sector focus on diverting organic waste from percent by 2050 and become carbon-neutral and landfills, landfill gas management, and improving climate-resilient by the end of the century. urban domestic wastewater treatment in cities. Leveraging synergies between sectors such as Ethiopia’s LTS also identifies actions in the electricity, water, wastewater, and transportation energy sector (e.g., electrification, promotion of along with curbing urban sprawl by promoting efficient technologies in all end-use services in compact urban areas and strengthening urban households) and transportation sector development regulations are the main strategic (e.g., improvements to mass transit and non- approaches for achieving this vision. Nigeria’s motorized transit) that should be implemented to LTS will likely outline the various GHG emissions meet overall GHG emissions reduction targets for scenarios and elaborate on the key interventions these sectors. that will support this long-term vision. Source: Government of Ethiopia 2023. Source: Government of Nigeria 2021. ¹⁴ Nigeria has published a long-term development vision that will inform the development of its LTS (Federal Government of Nigeria 2021). ¹⁵ UNFCCC Long-term strategies portal. Accessed on: August 31, 2023. 29 Chapter 2. National climate change strategies lack robust consideration of urban climate action Role of cities and other subnational actors in co- Coherence between NDC and LTS development and creation of LTSs implementation processes is especially important for urban climate action in LICs and LMICs, where most Systematically involving subnational and city governments mitigation efforts need to focus on avoiding GHG and local stakeholders in the LTS development process can emissions increase and reducing the risk of carbon lock- contribute to its robustness and enable successful in. LTSs can advance these long-term outcomes by implementation. Executing economy-wide strategies such as considering the needs and issues related to low-carbon LTSs requires establishing strong linkages between urbanization against potential trade-offs with other development and climate-related priorities at sectoral, priorities. This also helps create longer-term policy subnational, and city levels. In recent years, sectoral and signals for decision makers that can guide short-to- subnational entities in several developing countries have medium-term actions, which can be pursued through formulated short- and long-term climate action plans or net- NDCs and their subsequent updates, including: zero strategies (e.g., Urban Low Emissions Development Strategy, state- and city-level climate action plans).¹⁶ Prioritizing the set of climate-informed policy processes Collaborating with sectoral and subnational authorities that that are expected to lead to long-term system-wide have led these efforts can provide important inputs to effects (e.g., integrated urban planning) and/or countries’ LTS development or subsequent NDC updates. These entities can help incorporate urban-specific data and Supporting policies and actions consistent with specific transition pathways in long-term modelling, enabling more sectoral decarbonization pathways (e.g., adopting concrete technological, behavioral, or other factors to be energy performance standards and increasing their considered in target setting and refinement of monitorable stringency over time), both of which need to be performance indicators for urban climate action. They can advanced through NDCs and their subsequent updates. support the assessment of slow-onset impacts of GHG emissions that are specific to urban areas (e.g., evolving However, effective integration between LTSs and NDCs is urban forms and land use, level of informality, travel demand currently limited. There has been little clarity from countries patterns), which may create carbon lock-in or, in contrast, on how their processes for short-to-medium-term climate have positive spillover effects beyond urban areas (for further action and long-term decarbonization planning are linked. details, see Chapter 5, Section 5.1). In some cases, this According to a 2020 analysis by the Organization for information can help prioritize interventions and policies that Economic Co-operation and Development (OECD), “more show substantial long-term benefits and prevent costly lock- than half of the LTSs submitted by October 2019 do not in. They can also support the identification of local needs for contain any explicit linkages to the country or region’s strengthening the enabling conditions for long-term NDC” (Falduto and Rocha 2020). This could be attributed to paradigm, technology, behavior, and system shifts to the limited experience in developing, and communicating stimulate low-carbon transition in urban areas. Further, about, NDCs and LTSs, the latter of which is still missing in subnational/city governments can integrate LTS long-term many developing countries. Some countries have goals into urban development planning and budgeting, recognized the need for stronger and more explicit translate urban mitigation measures into investments, and alignment between their LTS and NDC (Falduto and Rocha, encourage private sector participation. Additionally, co- 2020). This is reflected in the updated NDCs submitted in creating an LTS with city governments and stakeholders can 2022 and 2023, which show improved alignment with help align the LTS with urban priorities, promote strong local LTSs. For example, Ethiopia’s recently submitted LTS ownership and buy-in, and enable a more just transition, establishes clear linkages with its NDC (Box 2.6.). given city governments’ proximity to the communities that are likely to be affected by its implementation. Participation of subnational governments and local stakeholders in the LTS development process should be supported by a Box 2.6: Linkages between Ethiopia’s NDC and LTS framework that clearly assigns responsibilities, including goals, timeframes, and indicators across different levels of Submitted in mid-2023, Ethiopia’s LTS is fully aligned government. National government support is often required for with the country’s 10-Year Development Plan and 2021 establishing or strengthening local institutional structures for updated NDC and includes a mechanism for informing LTS development (e.g., ensuring that local entities have clear the ambition of targets in subsequent NDC revisions. roles and responsibilities, political and budgetary support, The LTS compares a business-as-usual (BAU) scenario processes to encourage inclusive and transparent stakeholder engagement). with three decarbonization scenarios: Maximum ambition scenario: Assumes maximizing Limited harmonization of NDCs and LTSs is a climate ambition early on, leading to net-zero 2.1.3 barrier to integration of urban climate action emissions by 2035. NDC-aligned scenario: Factors in NDC’s Harmonizing LTSs and NDCs can ensure that they are emissions target until 2030 and further mutually supportive and that NDC short- and medium-term increases the ambition of targets by 2035 to goals are aligned with the country’s long-term objectives. Coordinated development of LTS and NDC can leverage the achieve net-zero emissions by 2050. many interdependencies in the planning of short-, medium-, and long-term policies, create a reciprocal relationship, Late-action scenario: This scenario illustrates generate efficiencies, and increase political consensus. For how net-zero could be achieved if the fiscal example, a country can formulate its long-term vision and space for early action is not available by pathway for 2050 while identifying interim targets for NDCs assuming that NDC targets for 2030 are that are aligned with its LTS (Climate Analytics 2022). This missed and most ambition is implemented can also help optimize the institutional effort required from from 2040 to 2050. various ministries and departments involved in their (Continued) development, implementation, update, and monitoring. ¹⁶ See the example of Accra’s Climate Action Plan in Box 3.3. 30 Chapter 2. National climate change strategies lack robust consideration of urban climate action The literature covered a range of geographies, urban climate issues, key mitigation interventions, and methodologies to Box 2.6: Linkages between Ethiopia’s NDC and assess their impacts and approaches and recommendations to LTS (continued) address barriers to the implementation of climate action, focusing on rapidly urbanizing countries in South Asia and SSA. A cost-benefit analysis undertaken for the three LTS scenarios illustrated that the NDC-aligned A range of reference material and tools are available for scenario presents the best proportion of costs to analyzing and improving urban climate action integration avoided costs and added benefits. Ethiopia will develop an MRV system to evaluate progress (Solecki et al. 2015; C40 and ARUP 2017; GCOM 2021; GO- toward implementing the actions to achieve its Science 2016; NDC Partnership Climate Toolbox;¹⁷ UN- LTS objectives. This will help the country identify Habitat 2021). Some reviewed approaches target only opportunities for increasing the ambition of its national governments (Box 2.7) or only city governments next NDC. To this end, Ethiopia plans to (The McKinsey Center for Business and Environment and eventually fully mainstream the MRV framework in C40 2017; LSE 2019). Others cover a multitude of barriers its 10-Year Development Plan and successive and challenges and offer recommendations that may be development plans with targets and indicators difficult to tailor to specific countries and local contexts. Still provided for each sector others are too locally specific in their recommendations and adopting them in different contexts may be challenging. Source: Federal Democratic Republic of Ethiopia Ministry of Environment and Forest (2015); Government of Federal Democratic Republic of Ethiopia (2023). Box 2.7: Climate Action Tracker’s approach to There is a growing body of literature on key approaches and assessing readiness of national governments to processes to strengthen the link between NDCs and LTSs transition to zero-emissions pathways (Falduto and Rocha 2019; Aguilar-Jaber et al. 2020; Hans et al. 2020). The key elements of this effort include defining the integrated vision; enhancing existing policies and legal The Climate Action Tracker¹⁸ evaluates the ability and instruments and ensuring coherence; aligning approaches for readiness of national governments to enable the GHG emissions modelling and target setting between LTS, NDC, required economy-wide transformation toward a zero- and sectoral decarbonization strategies; and evaluating and emissions world. The assessment has four aspects of aligning M&E processes. Furthermore, harmonization between governance covering key enabling factors for these two strategies requires clarifying the processes for effective climate action: stakeholder engagement and institutional arrangements for developing plans; ensuring political leadership; securing financial The political commitment of the government to and technical resources; and, finally, establishing timely and decarbonization, including high-level government aligned processes for updating and revising the plans. leadership and quality of decision making. Supporting integration of urban climate The institutional framework to achieve national emissions reduction targets through effective 2.2 mitigation action into national climate coordination, knowledge infrastructure, and change strategies adequate resources. As discussed in Chapter 1, rapidly urbanizing LICs and LMICs The processes to develop, implement, and review have an unprecedented opportunity to avoid conventional mitigation policies in line with the Paris patterns of urban development by promoting lower-carbon and Agreement’s temperature goals build on the climate-resilient urban growth. Given their significant socio- UNFCCC transparency framework,¹⁹ and include economic constraints and acute limitations related to urban ratchet-up mechanism. governance, institutional, and financial capacities, the climate and urbanization challenges need to be tackled simultaneously. The ability and willingness to engage with relevant Pursuing climate mitigation action in urban areas that helps stakeholders on policy development, including reinforce their development priorities while being consistent with level and scope, just transition, and exogenous countries’ overall climate and development priorities is therefore non-state interests and influence. crucial for securing buy-in at the local level and requisite mandates and resources from higher levels of government. This Source: Climate Action Tracker 2021a. section lays out the analytical approach taken in this report to identify the focus areas and assess the key barriers, enabling conditions, and approaches to support integration of urban climate mitigation action into national climate change strategies and their implementation in developing countries. Based on the literature review, an analysis was conducted to identify the common challenges and current practices on horizontal and vertical integration of urban climate action in six Analytical approach—three key pillars rapidly urbanizing countries and cities in Asia and Sub-Saharan 2.2.1 of integration Africa: Bangladesh (Dhaka), South Africa (Cape Town), Ghana (Accra, Kumasi, and Tamale), Kenya (Nairobi), Ethiopia (Addis The focus areas to support integration and associated barriers Ababa), and Indonesia (Balikpapan, Jakarta, and Semarang). This and solutions that are proposed in this report are derived from comprised (i) examples of integrating climate considerations into desk-based research and analysis that revisited recent literature urban development policy and investment planning and (ii) gaps on integration of (i) urban development and climate strategies and barriers to the integration of urban climate action in national and (ii) local and national urban climate action. climate change strategies. ¹⁷ The Climate Toolbox is a curated, searchable database of tools and resources to support NDC planning and implementation. Available at: https://ndcpartnership.org/knowledge-portal/climate-toolbox. ¹⁸ The Climate Action Tracker is an independent scientific project that tracks government climate action and measures it against the globally agreed Paris Agreement aim of "holding warming well below 2°C and pursuing efforts to limit warming to 1.5°C." ¹⁹ Transparency arrangements under the UNFCCC facilitate the availability of up-to-date data on countries’ GHG emissions, policies, and measures, progress toward targets, climate change impacts and adaptation, levels of support, and capacity-building needs. 31 Chapter 2. National climate change strategies lack robust consideration of urban climate action This report identifies three key pillars for integration of These approaches aim to foster systematic and robust urban climate action into national climate change strategies integration of urban considerations into the development and its implementation that collectively cover the main and implementation of national climate change and themes and findings that emerged from the literature development strategies such as NDCs, LTSs, and other review and analysis of specific countries/cities (Figure 2.1): relevant sectoral strategies. The proposed approaches are (i) integrated policy frameworks and institutional structures, expected to be applicable across countries with diverse (ii) strengthened finance mobilization, and (iii) evidence- policy, institutional, and capacity contexts and tailored to based policy processes and integrated MRV systems. Each their specific policy goals, mandates, levels of access to of these pillars is discussed in subsequent chapters. climate finance, and capacity and data gaps. Several country and city examples are included to provide practical The process of integration can be pursued through a robust illustrations. roadmap that clearly identifies: Other aspects of integration The targeted points at which integration would typically be Other aspects of integration identified in the literature required—from both content and process perspectives—to (Climate Action Tracker 2021a; Lwasa et al. 2022; Smoke achieve more efficient policy processes and outcomes. and Cook 2022; UN-Habitat 2021; World Bank 2022) that are not explicitly discussed in this report include: Feasible approaches to achieve integration specific to the country’s urbanization context and readiness. Processes of communication and engagement Examples of integration processes between local and (including stakeholder and citizen engagement): national strategies indicate that such integration is Existing literature often focuses on engagement highly context-driven, as it depends on a combination processes and tools, but communication is also a key of policies, administrative structures, and decision- cross-cutting theme. making practices that are country-specific. In addition, each country and local context is characterized by a Capacity-building processes: In addition to being a level of readiness based on the current policy critical cross-cutting need across both climate and alignment, institutional capacities, and efforts needed urban development planning, capacity building, to change the status quo, which will determine particularly at the city level, is also relevant. For a achievable near-to-longer-term milestones for the discussion about climate-related capacity building of integration process. cities, see UN-Habitat (2021b), which includes examples of policy and capacity-building support provided to several countries as part of the Urban LEDs project. For each pillar, the report discusses ways to advance the integration process, building on a detailed analysis of gaps, Legal frameworks and legal tools: These can support opportunities, and relevant integrative solutions. The report integrated planning albeit at the level of broader also proposes a Readiness Diagnostic Framework to climate planning. assess how prepared national- and city-level entities are to progressively integrate the low-carbon urbanization agenda Implementation processes: This report briefly touches into national climate and development policies and support upon implementation in relation to countries’ ability to its implementation. In addition, to enhance evidence-based undertake integration of urban climate action into policy processes (Pillar 3), a dedicated Guide for selecting national climate change strategies and implement such urban diagnostic tools and models was developed for this integrated action but does not discuss implementation report. processes in detail. Figure 2.1: The three key pillars for integration of urban climate action into national climate change strategies 1 2 3 Integrated policy Strengthened Evidence-based policy frameworks and finance processes and integrated institutional structures mobilization MRV systems 32 Chapter 3. Enhancing policy frameworks and institutional structures to support integration As core entities in the functioning of urban areas, Such coordinated processes are crucial for shaping local subnational governments and institutions facilitate and priorities and actions on climate that conform with countries’ manage linkages between the urban development and long-term low-carbon, climate-resilient development pathways. climate agendas across different sectors, geographies, and Further, as discussed in Chapter 2, these processes are stakeholders, making them key enablers of climate change important to ensure that longer-term climate transitions required mitigation (Lwasa et al. 2022). Integration of urban climate in urban areas are reflected in countries’ LTSs, which are key to action into national climate change strategies and its identify the enabling conditions for technological or other effective implementation calls for coordinated planning and systemic shifts required to achieve long-term climate goals. policy development processes at both national and city They also facilitate the alignment of city-level climate action levels. Institutional structures that support these plans with the country’s climate goals while recognizing frameworks and processes are equally important as they opportunities specific to urban areas. can facilitate collaboration between national and subnational governments, strengthen local capacity, and The overall scope of integration across climate and urban enable participation of national, subnational, and non- development planning is illustrated in Figure 3.1. National government stakeholders. development plans serve as the policy planning backbone for most developing countries by consolidating national Role of coordinated policies and institutions in medium- and long-term development goals. These plans include priorities across key socio-economic sectors facilitating integration of urban climate action including urban development and cross-cutting areas such as climate change. When countries’ economy-wide, sectoral, Robust policy processes and institutions support the and cross-cutting plans and strategies are aligned and development, implementation, and updating of policies and coordinated, they strengthen each other and support plans in an inclusive, participatory, coordinated manner and effective implementation. City and regional governments consider the differing needs and opportunities at each level have in-depth knowledge of their jurisdictions and their of government, including for accessing finance. Successful climate-related challenges, which is essential information for execution of climate policy planning through well- developing national policies that respond to local needs. functioning institutions ensures that cities and other Similarly, country-wide sectoral policies that are not city- subnational stakeholders participate in the NDC and LTS specific (e.g., energy standards, transportation regulations, process, ‘buy in’ to their commitments and implementation taxation) also influence city-level climate action and need to strategies, and support their adoption locally. be designed considering the urbanization context. Figure 3.1: The scope of integration of climate and development strategies considering urban systems CLIMATE CHANGE PLANNING NATIONAL DEVELOPMENT PLANNING URBAN DEVELOPMENT PLANNING NATIONAL LEVEL Economy-wide Plans and Strategies Sectoral Plans and Strategies LTS Long-term development plan National Urban Strategy 2050 and beyond: Strategic economy- Strategic vision for national wide vision for decarbonized and development in the long-term Strategic vision for urbanization climate-resilient development + Focused on implementing NDC Medium-term development plans measures to achieve countries' urban development goals Medium term and focused on Focused on implementing (Includes spatial frameworks) implementing countries' commitments measures to achieve countries' under the Paris Agreement development goals URBAN LEVEL Urban Climate Action Plans Long-term development plan Strategic vision for decarbonized Strategic vision for development of the urban area in the long-term Vertical integration and climate-resilient development at the city-level Medium-term development plans Capital Investment Plans Implementation of medium-term Focused on implementing measures to priorities on climate change achieve urban development priorities Spatial plans Horizontal integration 34 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Depending on a country’s climate governance structures and the level of advancement of city-level climate strategies, 3.1.1 Barriers to policy framework integration integration can be locally led, (‘bottom-up’), in which city initiatives actively contribute to and influence national climate action. Alternatively, it can be nationally led, (‘top-down’), in The key barriers to achieving integrated policy frameworks which national-level policy frameworks and institutions cascade include: down national climate objectives to the city level and empower local actors. The extent to which a national government can Weak overall structure and functioning of urban policy facilitate integration across different government levels and processes, such as: (i) poor vertical integration of urban actors, either simply through information sharing or also through development planning, (ii) constraints of national decentralizing mandates and responsibilities, may differ given strategies and policies that may hinder the advancement varying governance contexts. The integration process often has of the urban climate agenda, and (iii) lack of requisite elements of both top-down and bottom-up approaches. authority and mandates at the city level. Countries facing However, today, the alignment between national climate and these barriers would typically have a weaker foundation urban development planning is limited, with countries lacking for integration of urban and national climate agendas. institutional mechanisms for coordination between key ministries (OECD/UN-Habitat/UNOPS 2021). Lack of strong climate policy processes relevant for urban climate action, such as: (i) absent or weak climate change Effective cooperation between different government levels in mainstreaming across policymaking, (ii) absence of vertical setting up policy processes and institutional structures is crucial coordination of climate policy processes (misalignment for strengthening the link between national and urban climate between climate action at different government levels), and planning. This cooperation can take whichever form is (iii) lack of awareness of national low-carbon development appropriate, depending on country and city circumstances goals at city level. arising from a broad range of legislative, political, social, and economic conditions as seen from emerging practices in cities The implications of these barriers for integration between the around the world. In some cases, coordination could consist of urban development and climate policy agendas are discussed formal legislative integration, devolution, and/or decentralization. below. For instance, Kenya has devolved climate change functions, with its 2016 Climate Change Act (The Republic of Kenya 2016) Poor vertical integration of urban development directing county governments to implement the National Climate planning Change Action Plan (NCCAP) by mainstreaming climate actions into their county-level development plans, such as Nairobi City Well-functioning urban policies and institutional structures at County Climate Action Plan 2020-2050 (Nairobi City County, national and subnational levels provide a solid foundation for 2022). Ghana also takes a similar approach (see Chapter 6). implementing climate action in cities, especially for aligning Alternatively, in contexts without formal structures, cooperation priorities, timeframes, and resources and budgets between might simply take the form of enhanced communication different government levels. Poor vertical integration of urban between the relevant entities within and across different levels development planning presents significant challenges to city of government. governments, particularly in leveraging sufficient resources, financial and otherwise, to implement their policy priorities. The subsequent sections describe how integrated policy This in turn can affect related priorities such as climate action. frameworks and institutions can support integration of urban Typically, subnational governments in developing countries climate action into national climate plans and strategies and its are dependent on the national government for funding²¹ and implementation, the key barriers for achieving such integration, other kinds of support (e.g., preparation of investment-ready and solutions to overcome these barriers. action plans). As a result, it is important for subnational governments (especially in small and medium cities) to align their priorities with national priorities including on climate 3.1 Integrated policy frameworks mitigation efforts to acquire the requisite resources. An integrated policy framework facilitates alignment of objectives between two or more interlinked policy agendas Constraints of national strategies and policies and coordinated planning and implementation of actions across (i) national and subnational levels²⁰ (vertical integration) Potential for mitigation action at the city level can be largely and (ii) relevant entities functioning within each level dependent on national (and state/provincial) policies and (horizontal integration). Such a framework should be pursued regulations in areas that are outside the scope or mandate of across two dimensions: (i) creating policy agendas and (ii) national urban development entities or city governments (e.g., scales at which these agendas are developed, implemented, energy performance standards, transportation policies, and monitored and evaluated. taxation). Many such strategies and policies consider the need for implementation of climate actions at the urban level. An integrated policy framework in support of urban climate action However, they are often not co-created with cities and/or don’t enables actors at different levels of the government to identify and translate into specific local targets and action plans that cities implement climate-informed interventions that contribute to both can implement (see Section 1.2.1 on climate-informed urban climate change and urban development goals at national and transformations). The absence of mandates at the city level subnational levels. This can be achieved throughout the policy and/or mechanisms to develop such policies and regulations process, from developing GHG emissions inventories and setting in consultation with relevant subnational entities can be a climate targets to preparing action plans and conducting barrier to integration. For example, a country's national monitoring, evaluation, and reporting. An integrated policy transportation strategy that was not co-created with urban framework can also facilitate coordinated allocation of resources, representatives might prioritize scaling up bus rapid transit ideally resulting in outcomes that maximize synergies and minimize (BRT) systems in urban areas as one of the key actions to trade-offs between the two policy agendas. expand access to public transit. ²⁰ Note that there may be additional scales, such as ‘regional’ that are applicable in different contexts. These might represent a separate scale in its own right in certain contexts or be considered part of ‘subnational’ in others. For simplicity only national and subnational are identified here. ²¹ The portion of national revenues allocated to subnational governments comprises an average of 74.3 percent of total public revenues globally in the form of grants and subsidies and is the primary source of subnational revenue in most countries (Coalition for Urban Transitions 2019). 35 Chapter 3. Enhancing policy frameworks and institutional structures to support integration However, cities might lack the necessary infrastructure to Overlapping or misaligned low-carbon development support BRT systems (e.g., well-developed urban road scenarios and priority actions at different levels, which networks) at the scale targeted in the strategy and need could result in local plans not aligning with national climate substantial funding and technical support to bridge this gap. goals and decarbonization scenarios but instead focusing Instead, a strategy developed in coordination with urban on maximizing shorter-term opportunities at the local level. stakeholders could prioritize achieving similar goals with actions that are more technically and economically feasible such as Disconnect between national- and city-level impact augmenting existing public bus services while progressively indicators to track progress on climate action, which poses creating the infrastructure required for BRT deployment. significant challenges for comparing and aggregating outcomes and limits integration. Lack of requisite authority and mandates at the city level Lack of awareness of national low-carbon development goals at city level Countries have diverse governance structures with subnational entities having differing degrees of authority within their jurisdictions. The level of involvement of the national government In less hierarchical governance systems or in the absence of in subnational governance corresponds to the level of adequate communication across government levels or climate decentralization (e.g., deconcentration, delegation, devolution of legislation that outlines the responsibilities of government power through administrative, fiscal, and political dimensions) in entities for achieving national climate goals,²³ city officials may the country.²² While national governments usually have the most lack awareness of national climate goals and policies, limiting resources and access to technical and financial support (e.g., their ability to support their achievement. For instance, a ability to leverage the national budget, access additional sources country’s national climate change strategy might have GHG of finance, and procure technical assistance), their lack of emissions reduction targets for the waste sector that are proximity to the local context means that subnational achieved through specific actions in urban areas. If these are not governments are often better suited to tackle local challenges clearly communicated and cascaded down to subnational and but may not be able to implement policies and actions if relevant city governments, city-level climate action plans may include mandates, functions, and resources are not decentralized. Similarly, they may also be constrained in implementing actions in actions in the waste sector that are not aligned with national urban sectors that are outside their mandates (e.g., power goals, hindering integrated implementation and reporting. In this distribution, public transportation), as discussed above. Lack of scenario, a country’s NDC might identify increased composting authority and mandate could deter cities from participating in the of waste to reduce methane emissions in urban areas, while a development of strategies and policies in areas that are not part city might instead prioritize waste-to-energy systems to capture of their official functions but will be implemented in their and utilize methane generated in landfills. In such instances, the geographic jurisdiction and could therefore benefit from their national government should actively engage with local inputs, hindering integration. governments regarding relevant information (e.g., climate- informed targets, policies, strategies). Lack of climate change mainstreaming across policymaking 3.1.2 Integrative solutions Mainstreaming of climate change considerations in policymaking ensures that climate-related impacts are systematically assessed across the economy (e.g., in all relevant sectors), and opportunities Possible integrative solutions for policy frameworks (Figure 3.2) to avoid or reduce GHG emissions are maximized through and examples of their implementation in several countries and coordinated efforts that leverage cross-sectoral synergies. Climate cities are described below (Boxes 3.1–3.5). While there is no mainstreaming includes (i) incorporating climate considerations prescribed method for achieving an integrated policy into national economy-wide development planning that flows framework, one or more of these solutions can be adapted to down and translates into climate-informed implementation plans at specific country and local contexts. Some of the solutions local levels; (ii) incorporating climate-related responsibilities into the discussed in this section are cross-cutting and can address roles and functions of relevant government departments; (iii) barriers across both urban and climate policy agendas while including climate-related performance indicators within all others are specific to one of the two agendas: departments, especially those responsible for the most GHG- intensive sectors (e.g., energy, buildings, transportation and mobility, land use, waste management); and (iv) climate-informed budgetary allocations (discussed in Chapter 4). Climate change mainstreaming is key for the effective implementation of NDCs and LTSs, which require economy-wide efforts. In recent years, numerous countries have made efforts to mainstream their climate priorities (e.g., NDC targets and measures) in their development planning efforts. However, countries with lower institutional and technical capacities face several implementation challenges (see example of Ghana in Chapter 6). Lack of vertical coordination in climate policy processes National and subnational governments often undertake climate action planning independently, a disconnected approach that may lead to several shortcomings in the planning, implementation, and monitoring of actions: Misaligned baseline assessments in which national climate planning efforts may not be sufficiently informed by (i) the carbon footprint of urban areas arising from current and projected urbanization trends and (ii) the opportunities and challenges associated with low-carbon urbanization that can impact the achievement of overall national and sector- specific climate and development goals. Kolkata, India © suprabhat / Shutterstock ²² See Smoke and Cook (2022) for a high-level summary on decentralization and intergovernmental institutional landscape. ²³ Formally legislated effort-sharing in achieving national climate goals remains rare (Smoke and Cook 2022). 36 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Figure 3.2: Integrative solutions for policy frameworks BARRIERS INTEGRATIVE SOLUTIONS Poor vertical integration integration of urban Mainstream climate Urban policy process development planning change in national development planning Constraints of national strategies and policies Integrate low-carbon growth Lack of requisite authority and considerations in the national mandates at the city level urban agenda Lack of climate change mainstreaming across policymaking Explicitly consider urban climate action in national climate change strategies Climate policy Lack of vertical coordination Empower city governments and in climate policy processes strengthen intergovernmental coordination in policy areas with overlapping mandates Lack of awareness of national low-carbon development goals Enhance communication between at city level national- and city- level on climate action Decision making around mainstreaming of low-carbon growth Mainstream climate change in national development considerations in development planning requires tools and planning diagnostic approaches that can help policymakers assess associated risks and opportunities (e.g., GHG emissions increase resulting from economic growth, distributional impacts of NDCs and LTSs should fully reflect countries’ medium- and measures to reduce GHG emissions). Barriers and solutions long-term development goals to facilitate their successful related to low-carbon urbanization data and diagnostics are at implementation. In turn, systematically incorporating climate the core of Pillar 3 and discussed in Chapter 5. change targets and actions identified in NDCs and LTSs in national medium- and long-term development plans (climate change mainstreaming) is crucial for achieving countries’ climate change commitments while also advancing their development priorities. Mainstreaming Box 3.1: Climate change mainstreaming in national climate change into economy-wide development planning development planning—Bangladesh can help overcome sectoral and institutional silos, avoid The Bangladesh Planning Commission undertakes policy conflicts, and reduce potential trade-offs between development planning through five-year national development goals and low-carbon growth efforts that development plans (NDPs). These economy-wide might arise from implementing the two agendas separately. plans are complemented by sectoral development As development plans inform sectoral plans and often have plans issued by ministries. The country first well-developed implementation mechanisms at subnational articulated its vision on climate change under this levels (e.g., subnational entities may be required to create framework in 2009 through the Bangladesh Climate development plans for their own jurisdictions that reflect Change Strategy and Action Plan BCCSAP, which national development priorities), they are an effective identified climate change as a key development issue vehicle for delivering vertically and horizontally integrated and focused on pro-poor climate risk management. climate action (adapted from Mogelgaard et al. 2018). Additionally, climate change mainstreaming ensures that Starting with the fifth five-year plan, each successive NDP has progressively mainstreamed climate change subsequent NDC and LTS updates factor in countries’ into its vision and priorities. Bangladesh’s eighth five- progress on development goals along with new year plan (July 2020-June 2025) is aligned with the opportunities and trade-offs that are relevant for revising country’s NDC commitments and supports a climate targets and implementing them. governance structure outlined in the “Roadmap and Action Plan for Implementing Bangladesh NDC.” The Given the numerous cross-sectoral interdependencies of plan identifies “improving understanding of climate the low-carbon urbanization agenda, mainstreaming climate change of local governments” as one of the activities to change in national development planning can be a key be undertaken to address climate change and enabler of effective coordination between different levels of emphasizes the need for identifying localized solutions. government (vertical) and across different sectoral entities Source: Government of the People’s Republic of Bangladesh (horizontal) required for undertaking integrated urban 2020; World Bank Group 2022a; Fatemi et al. 2020. climate action. 37 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Integrate low-carbon growth considerations in the national urban agenda Box 3.2: Advancing urban development Systematic consideration of low-carbon urbanization consistent with national development and opportunities in the national urban agenda can harness the climate priorities—South Africa potential of urban areas to reduce GHG emissions through both sector-specific pathways and spatial planning processes South Africa’s National Development Plan 2030 is and strengthen horizontal coordination between climate and the country’s long-term development plan that urban development policy agendas. It can also augment guides all policy and planning in the country until vertical coordination to cascade down implementation efforts 2030 (Republic of South Africa 2014). Chapter 5 of to city level, providing cities with a foundation to build on its NDP focuses on transitioning to an through their local climate action plans. environmentally sustainable, climate-resilient, low- carbon economy and a just society. Under this Enhance vertical integration and integrate urban objective, the plan emphasizes the need to build development and climate policy agendas through a sustainable communities by progressively National Urban Policy devolving responsibilities to local governments.²⁵ In this context, it mentions that effective planning can promote urban densification and reduce the With urbanization emerging as a critical driver of economic environmental footprint associated with delivering growth in developing countries, national governments are services such as waste management, electricity, increasingly recognizing the role of urban areas in attaining water and sanitation, and public transportation. It long-term low-carbon development goals. In recent years, urban also indicates the need to reduce the carbon development has become an important focus area for national footprint and economic costs of transportation for governments, both to seize opportunities offered by urban the urban poor by expanding access to public growth but also to address challenges arising from an transit and optimizing travel distances through expanding urban population (UN-Habitat 2014). As discussed in spatial planning approaches. The NDP is Chapter 1, fragmented and unplanned urbanization in incorporated into the Integrated Urban developing countries underscores the need for coherent urban Development Framework (IUDF), which was policies that reconcile national development and climate goals published by South Africa’s National Department with service delivery gaps and infrastructure needs in urban of Co-operative Governance and Traditional areas in an inclusive manner. For the past decade, UN Habitat Affairs in 2016 (Republic of South Africa 2016) and and other international initiatives have supported countries in is the government’s policy to guide growth and articulating their urban development vision in a national urban management of urban areas. The IUDF aims for policy (NUP)²⁴ through a collaborative process between the spatial transformation in South African cities and national government and cities (UN Habitat 2014). A NUP can towns by steering urban growth toward a provide an overarching framework for addressing urban compact, connected, and coordinated form, as challenges while meeting development priorities and envisioned by the NDP. Cape Town’s Five-Year considering spatial and institutional dimensions. It can also Integrated Development Plan (2022-2027) (City of facilitate sharing of responsibilities and urbanization dividends Cape Town 2022) sets out a vision for a more between national and subnational governments (UN Habitat spatially integrated and inclusive city and is well 2014). As such, a NUP can be an effective instrument for aligned with both the NDP and the IUDF. achieving a vertically integrated urban development policy agenda (Coalition for Urban Transitions, 2019). Further, since development planning is a well-established area in most countries, embedding urban development priorities in national Explicitly consider urban climate action in national development planning processes through NUPs helps leverage climate change strategies their institutional frameworks and funding mechanisms to facilitate their implementation. Explicit inclusion of climate priorities and targets for urban NUPs can be an effective platform for integrating urban areas in NDCs and LTSs is crucial to create the enabling development and climate policy agendas at national level environment for realizing their mitigation potential. Similarly, and support their coordinated implementation at city level. NDC implementation plans and LTS roadmaps should Updating NUPs to include climate mitigation action from include specific measures to be undertaken in urban areas countries’ NDCs or LTSs that is relevant for urban areas can and be reflected in financing strategies. This can take the provide a strong foundation for aligning urban mitigation form of a published climate change implementation plan action with national climate goals. The case of South Africa supported by a framework for measuring, planning, and provides insights on how climate change-related priorities in achieving GHG emissions reduction. Further, where long-term national development plans are reflected in possible, anchoring these goals and targets in laws and national urban development policies and translated into city- regulations makes them legally binding and can help level priorities (Box 3.2.). NUPs can also provide valuable enforce their implementation at city level. In the absence of inputs for integrating urbanization priorities into the LTS systematic integration of urban climate action in national development process, by helping capture significant causes climate plans and strategies, cities’ climate action plans of GHG emissions associated with rapid urbanization (as should at least be communicated to the national level to discussed in Chapter 1). facilitate their reflection in NDC goals and targets. ²⁴ UN Habitat (2014) defines NUP as “a coherent set of decisions through a deliberate government-led process of coordinating and rallying various actors towards a common vision and goal that will promote more transformative, productive, inclusive, and resilient urban development for the long term.” ²⁵ In 2019, South Africa’s National Planning Commission organized consultations with civil society, business, government, labor, communities, and experts to identify pathways to achieve this vision. One of the key recommendations included an increased role for local actors in the governance of the just energy transition in South Africa (Urban LEDS 2020). The role of subnational governments is also clearly recognized in South Africa’s LTS (Republic of South Africa 2020), which recognizes that in addition to the training and capacity building that will be required to support the transition at national level, infrastructure and skills will need to be developed at subnational level. It also acknowledges that many of the subnational government structures are currently dysfunctional and lack capacity to support implementation of, and manage funding for, the actions required to support the low- carbon transition. 38 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Undertake coordinated planning and implementation of Box 3.3: Alignment between mitigation goals measures in sectors and areas that have overlapping in Ghana’s NDC with actions in Accra’s Climate mandates across different levels of government (e.g., urban transportation, building energy performance). Action Plan Assess climate mitigation-related risks and potential in their The Accra Climate Action Plan (CAP) 2020-2025 jurisdictions, given their proximity to GHG emissions drivers prepared by the Accra Metropolitan Assembly (AMA) and urban stakeholders. is Ghana’s first subnational climate plan that devolves national climate change targets and ambitions to the To empower city governments, national governments can (i) metropolitan assembly level. The implementation of delegate climate-related functions to them to advance climate CAP will directly contribute to the achievement of action in areas over which they have authority, (ii) realign Ghana’s NDC targets. Ghana’s NDC identifies responsibilities between national and subnational entities by measures such as adopting alternative urban solid decentralizing certain functions, and (iii) clarify roles and waste management and promotion of energy responsibilities of different actors in implementing shared efficiency in homes and industry to achieve its GHG functions. For areas with overlapping mandates, it is imperative emissions reduction targets. In line with the NDC goal to take stock of existing mechanisms for intergovernmental and the country’s plan to tackle short-lived climate coordination and identify any needs for new arrangements, pollutants, Ghana has set numerous national targets especially for long-term climate planning and implementation for the solid waste sector by 2030 including doubling (adapted from Smoke and Cook 2022). composting capacity to 190,000 tons/year and capturing 65 percent of landfill gas. Accra’s CAP prioritizes the solid waste and wastewater sector as one of five key areas for climate action. Within this Box 3.4: Assigning key responsibilities for climate area, (i) diverting organic waste from landfills and action to lower levels of government in Kenya doubling composting capacity and (ii) developing a new engineered sanitary landfill with gas capture have The Nairobi City Climate Action Plan 2020–2050 been identified as actions that will directly contribute to says: “The Constitution of Kenya assigns 14 separate national solid waste targets and NDC goals. Similarly, responsibilities to Counties, which include but are Ghana is seeking to achieve energy efficiency not limited to health, transport, control of air and improvements of 20 percent in industrial facilities by noise pollution, trade development and regulation, 2030. In line with this goal, CAP seeks to introduce education, planning (including housing, electricity, voluntary targets and incentives for energy efficiency and gas), water and sanitation services, and refuse in industrial facilities operating in Accra. Future collection. Within this context, Counties are updates to CAP will be synchronized with the five-year mandated to plan and implement their climate cycle of Ghana’s NDC updates. mitigation and adaptation actions and set up the necessary infrastructure to drive their agendas on Source: Accra Metropolitan Assembly, 2020; Government of Ghana, 2021c. climate change matters through policies, laws, and strategies which are all developed in the city and are ratified by its law-making arm. In addition to these locally devolved powers, County Governments are responsible for implementing policies that are set Empower city governments and strengthen primarily at national level, including strategic intergovernmental coordination in policy areas education, health, and infrastructure initiatives.’’ with overlapping mandates Source: Nairobi City County 2022. The functions and mandates for planning and implementing climate action in urban areas are shared between the national government and subnational governments and entities (e.g., state or provincial government, city Enhance communication on climate action between government, regional transportation authority). City national and city levels governments often have primary authority over such functions as land use planning, waste management, and If there are strong policy or institutional barriers to integrating urban design regulations. These areas are expected to urban climate action into national climate change planning, deliver about one-third of the urban mitigation potential by gradual improvement in information sharing between city and 2050 after excluding electricity decarbonization (Coalition national levels can be an initial step. Establishing for Urban Transitions 2019). The remaining major portion of communication mechanisms between the two levels can urban mitigation is largely under the regulatory authority of facilitate exchange of information, constituting an initial phase in higher-level entities such as national and state the longer-term coordination/harmonization effort on key governments (e.g., energy efficiency standards for aspects of the climate policy process (e.g., target setting, policy appliances, GHG emissions standards for vehicles, energy development, approaches to access financing, using consistent performance requirements in building codes). Empowering reporting indicators and timelines). This would enable cities’ city governments and improving intergovernmental climate action efforts and targets to be informed by climate coordination can enable city governments to: goals reflected in national climate plans and/or sectoral strategies. Additionally, if a country has climate-relevant M&E or Integrate climate considerations in functions within their MRV systems, cities could report progress on their mitigation administrative mandate (e.g., land-use planning, solid efforts against these indicators, facilitating data aggregation and waste management). comparison of outcomes (discussed in detail in Chapter 5). Finally, such mechanisms could foster the creation of an Fulfill their responsibilities for implementing and enforcing enabling environment at national level over time in the form of several economy-wide measures (e.g., enforcement of relevant legislative and regulatory frameworks that form a emissions standards for vehicles, emissions trading schemes). foundation for progressively pursuing the integration process. 39 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Box 3.5: Aligning urban climate plans to national strategies—Addis Ababa, Ethiopia The Addis Ababa Climate Action Plan 2021–2025 outlines a long-term vision to make the city carbon- neutral and climate-resilient. The plan has identified specific mitigation actions along with targets for the years 2030, 2040, and 2050 to deliver its carbon- neutrality goal. These were informed by a BAU scenario and three emissions reduction scenarios developed for Addis Ababa. The first of these was the Existing & Planned Action Scenario based on current policies and plans at national and city levels such as Ethiopia’s NDC and Climate Resilient Green Economy (CRGE) Strategy (Federal Democratic Republic of Ethiopia 2012)*. While this scenario was Bangkok, Thailand © Alpha_7D / Shutterstock found to reduce future emissions compared to BAU, it fell short of Addis Ababa’s carbon-neutrality goals, There are no optimal organizational structures that are conducive requiring the city to develop more ambitious to integrated urban climate action and establishing entirely new scenarios and identify actions that go further than the (formal) structures is often challenging or unrealistic. Therefore, the national strategies. Further, the plan recognizes the most feasible approach could be to embed climate change-specific lack of coordination between national- and city-level functions within existing institutional structures, while promoting a entities on climate action and stipulates that the shared understanding of objectives and available resources Addis Ababa City Administration takes a leading role through mechanisms such as a climate change coordinating in creating linkages for other Ethiopian cities to committee to oversee climate efforts across government entities. contribute to national efforts in implementing the NDC and CRGE Strategy. The plan's MRV framework is intended to be aligned with the national climate action planning process, enabling vertical integration 3.2.1 Barriers to integrated institutional structures between the city and national government. In contexts with limited climate change mainstreaming across *The CRGE Strategy (2012) is the national guiding framework for Ethiopia to achieve its vision of becoming a policy agendas, it can be difficult to ensure that climate change low-carbon, middle-income economy by 2025 through is given equal significance to other development imperatives green economic growth. This strategy aims to enable the within institutional structures. This often results in a lack of clarity country to strengthen its capacity to adapt to the effects of on climate change-related functions, with roles and climate change through a sustainable development approach. The CRGE Strategy has been mainstreamed into responsibilities on climate being informally distributed across the Growth and Transformation Plan (GTP II) (Federal government entities. Democratic Republic of Ethiopia 2016), which is a five-year development plan that aims to drive the country’s ambition Lack of clear institutional structures, roles, and to achieve middle-income status by 2025 in a climate- resilient economy. responsibilities Source: Addis Ababa City Plan and Development Absence of formal, permanent, and predictable institutional Commission 2017. structures and functions on climate makes coordination of climate action across different government entities challenging and disincentivizes collaboration. Additionally, lack of clearly defined roles and responsibilities on climate hinders 3.2 Integrated institutional structures governments’ ability to secure sustained funding and other resources to recruit and retain personnel with technical expertise to gradually build up in-house capacity on climate change. The process of integration should encompass a clear allocation of roles for executing and implementing climate action to Lack of knowledge, expertise, resources, and specific administrative functions within government institutions. technical capacity To ensure that these functions are executed most efficiently and the personnel undertaking them are empowered to carry Since climate change is a relatively new priority for developing out climate-related responsibilities, dedicated institutional countries, government entities often have limited experience in structures need to be established. It is equally important to planning and implementing climate action. As discussed in create mechanisms that facilitate collaboration between Chapter 1, cities in LICs and LMICs typically lack expertise on personnel carrying out inter-linked functions or work in areas climate-related functions. Without adequate technical with overlapping mandates across different government levels. capacities, it can be challenging to develop and share knowledge, expertise, and resources to pursue the climate Strengthening coordination and promoting collaboration change agenda. To fill these gaps, governments often procure between entities can also help overcome resource and external support for fulfilling climate-related tasks (e.g., capacity gaps, especially at city level. For example, poor developing GHG inventories, modelling GHG emissions growth, integration between different levels of government, with developing action plans and investment-ready projects) rather climate-related processes being carried out in isolation, than augmenting internal resources and capacity. prevents sharing of knowledge and technical expertise. Often, a higher level of government or larger cities might have the technical expertise to support city governments with 3.2.2 Integrative solutions lower capacities on such matters as developing GHG emissions inventories and identifying priority interventions and performance indicators and can collaborate to overcome The integrative solutions for institutional structures are illustrated these capacity gaps. in Figure 3.3 and discussed below. 40 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Establish organizational structures and functions on climate change within each government level It also enabled new partnerships with external actors such as state enterprises and private Adequate human resources, their organization, and entities, which the city would need to effectively systematic engagement are key for strengthening vertical implement the plan (City of Cape Town 2021). and horizontal coordination across policy processes to plan and implement integrated urban climate action. To ensure The City of Cape Town is also part of the that different levels of government can perform climate- provincial-level climate change response forum related functions and meet targets, organizational and work group led by the Western Cape structures with formally defined roles and responsibilities Government, which facilitates collaboration and should be established at each level. Creating a sufficiently learning between local governments in the staffed and funded body with a clear role and mandate on province. The forum also generates information climate at subnational level can send an important political that the Western Cape Government uses to feed signal to the national government about the importance of into national processes. this policy agenda. The creation of such a body also requires establishing processes and systems, which can be aligned with processes and systems at other government levels, facilitating integration. Depending on the Promote collaboration and sharing of knowledge, organizational structures of institutions, existing roles and tools, and resources responsibilities could be modified to carry out climate- related functions instead of creating new climate-focused structures. This could mean formalizing climate-related Tools and resources to mainstream climate change in policy tasks, establishing dedicated reporting chains of command, processes or disseminate knowledge and build capacity are a and introducing accountability. key component that can be coordinated and shared across government levels. This can include tools that support technical processes such as modelling and scenario-building Promote stakeholder engagement approaches to develop low-carbon development pathways, identification and assessment of mitigation interventions, and Integrated urban climate action requires involving procedures such as stakeholder engagement or information stakeholders at all levels in the planning and decision- dissemination (e.g., knowledge-sharing platforms). Sharing making process so that measures and interventions are tools and resources can support integration of policies and both consistent with national priorities and locally plans through consistent structures, approaches, or appropriate, with buy-in from the communities where they information; promote efficient knowledge exchange; and will occur (Box 3.6). A participatory and collaborative streamline reporting efforts (see Chapter 5). Personnel and approach is also essential for addressing cross-cutting technical expertise can also be shared across administrative issues that don’t fit within individual sector or agency functions and structures. For example, the responsibility for mandates or that leverage cross-sectoral synergies, such compiling GHG inventories and reporting the impact of climate as integrated land-use and transportation planning. Multi- interventions can rest with a specific administrative function, level stakeholder engagement is therefore crucial for but the same personnel can provide support to other levels of attaining strategic alignment between city-level planning government or cities to perform the same function, either and national climate change targets and for achieving directly or through quality assurance and guidance (Box 3.7). coordinated policy processes across interlinked sectors. Establishing mechanisms that facilitate stakeholder engagement is a necessary step to integrate institutional Box 3.7: Leveraging knowledge on climate structures in countries. To this end, national governments can facilitate participation of city governments in the action reporting through collaboration development of NDCs or LTSs by setting up engagement platforms, organizing technical workshops, or establishing Various levels of government have different working committees dedicated to urban climate risks and obligations for reporting climate action that can be investment needs. leveraged to advance climate change mitigation and adaptation. National governments that are party to UNFCCC have explicit reporting obligations. In contrast, cities might choose to be part of an organization such as C40, a global network of mayors that works to solve the climate crisis, or Box 3.6: Collaboration and stakeholder GCoM (Global Covenant of Mayors for Climate & engagement on climate at the local level— Energy), the largest global alliance for city climate Cape Town, South Africa leadership, which includes over 12,500 cities and local governments committed to combatting climate change. Or they might choose to report information The City of Cape Town recognized the need for on climate action to the global Carbon Disclosure undertaking broad stakeholder engagement and Project (CDP). For example, the City of Cape Town consultation as part of its planning process to has a well-established, sector-based GHG inventory, develop both its new Climate Change Strategy and which is updated annually and reported to CDP. Climate Change Action Plan (City of Cape Town There is thus a vast pool of knowledge, expertise, 2021). Between 2018 and 2020, the city involved resources, and technical capacity available to city stakeholders through public consultations and civil governments. Cities with stronger capacities can society engagements, focus groups, expert more readily leverage available tools and resources while facilitating access and sharing experiences to interviews, and technical workshops. This process help cities with weaker capacities. This can take the was seen as crucial for securing widespread form of a collaboration and knowledge-sharing stakeholder support and buy-in and gathering data platform, where entities gather to share experiences and information to inform climate actions. and lessons learned. 41 Chapter 3. Enhancing policy frameworks and institutional structures to support integration Figure 3.3: Integrative solutions for institutional structures BARRIERS INTEGRATIVE SOLUTIONS Lack of clear institutional Establish organizational structures, roles, and structures and functions on climate change within each responsibilities government level Promote stakeholder engagement Lack of knowledge, expertise, resources, and technical capacity Promote collaboration and sharing of knowledge, tools, and resources Cape Town, South Africa © World Bank 42 Chapter 4. Strengthening finance mobilization at the local level for climate action With cities assuming a prominent role in countries’ transition to low-carbon development pathways, enhancing access to Private sector: In recent years, cities have made sufficient financial resources both at national and city levels is concerted efforts to secure private sector investment crucial for realizing climate goals in urban areas. There is also an in climate projects by using mechanisms such as PPPs urgent need to channel more targeted financing from national and special-purpose vehicles. and international sources to support low-carbon urban development, especially in rapidly urbanizing countries (World Source: CCFLA 2021 Bank and CCFLA 2021). Evidence suggests that climate finance delivered at the local level produces effective, efficient, and long- term results, maximizing the impact of each dollar spent, including delivering mitigation, resilience, and development 4.1.1 Financial capacity benefits (Soanes et al. 2017, CCFLA 2021). However, local governments face significant challenges in accessing domestic and international financing and unlocking private capital because of factors such as budget constraints, high levels of debt, and Financial capacity refers to cities’ ability to mobilize low creditworthiness. These challenges are often amplified by financing for climate-related investments from their OSR or institutional and political barriers that hinder the ability of cities to by raising capital on financial markets. Cities’ degree of mobilize financing to close the investment gap and advance the financial autonomy (e.g., level of mandate or authority to climate transition (CCFLA 2021; World Bank and CCFLA 2021). generate OSR, spend their own funds, or issue debt-based financing instruments such as municipal bonds) is a key Challenges and opportunities related to financing urban determinant of their financial capacity. Their ability to climate action have been addressed in detail in several borrow capital and use debt-based instruments depends on recent publications such as CCFLA (2021) and CPI (2021), their creditworthiness, borrowing track record, financial which include a comprehensive discussion of policy, expertise, and technical skills to identify, develop, and financial, and technical barriers and solutions for effectively implement robust investment-ready projects. subnational actors to access climate finance at scale. This Cities with a greater degree of financial autonomy coupled report, therefore, provides a brief overview of the key with adequate borrowing abilities can attract private capital prerequisites and barriers for cities to access climate and mobilize financing from domestic and international finance (Section 4.1) and focuses on how integration of sources. Limited financial capacity is therefore an important low-carbon urbanization into NDC and LTS policy barrier to access financing for urban climate action. processes can help mobilize financial flows for urban mitigation action (Section 4.2). 4.1.2 Technical capacity Limited capacity at city level is a 4.1 barrier for mobilizing climate finance Cities need to be able to design, manage, and implement climate-related investments. Their degree of dependence Cities can receive climate finance from a variety of sources on the national government’s institutional and technical (Box 4.1). Accessing these funding sources requires city resources for undertaking core functions such as spatial governments to have certain financial and technical planning and service provision can be an indicator of their capabilities and a conducive policy environment, especially technical capacity for climate-related functions. Skillsets when funds are channeled through national governments. associated with developing a robust pipeline of investments and preparing, managing, and implementing investment programs and specific projects (e.g., identifying investment needs, appraising proposals, preparing contracts, managing services, undertaking stakeholder engagement, monitoring Box 4.1: Main sources of climate finance and reporting performance) are common to both urban and available to cities climate policy areas. In addition, climate-specific technical expertise includes: International sources: Grants and credit from international climate funds and development finance Capacity to design and implement GHG emissions- institutions (e.g., Green Climate Fund, Climate reduction policies and investments that are appropriate Investment Funds, Multilateral Development Banks for local conditions and capabilities (e.g., developing [MDBs]). International funds are usually channeled GHG inventories, evaluating and monitoring emissions through the national government. In the past few impact of interventions, developing business models for years, numerous MDBs have launched initiatives to low-carbon projects). provide funding for urban climate action (e.g., the European Bank for Reconstruction and Development’s Understanding requirements and eligibility criteria of EBRD Green Cities). international climate funds and development partners to prepare compelling funding proposals and setting up Intergovernmental transfers from the national budget robust implementation entities. or state/provincial budgets. MRV skillsets such as data collection, aggregation, Own-source revenue: Revenue collected by cities analysis, and selecting and reporting on appropriate from property and business taxes, charges (e.g., performance indicators. congestion pricing, parking), user fees for services, fuel levies and road tolls, fines, and land value capture. Cities in LICs and LMICs often face significant challenges in meeting these prerequisites because of limited financial Borrowing instruments such as debt, balance sheet and technical capacities. In small and medium cities, this financing, municipal bonds, and credit enhancement gap is often compounded by numerous constraints in mechanisms. fulfilling core urban development-related functions such as urban service delivery and financial management. 44 Chapter 4. Strengthening finance mobilization at the local level for climate action Some of the integrative solutions discussed under Pillar 1 (Chapter Finally, limited policy integration can also impede the 3) can also be deployed to address capacity-related barriers to transfer of resources, financial or otherwise, from higher mobilizing finance at city level. For instance, the national levels of government required by city governments to meet government can empower city governments with mandates to capacity-related prerequisites. bolster their financial autonomy, while city governments can collaborate with entities with greater capacities to overcome their technical capacity constraints. Integration of urban climate action 4.2 into NDCs and LTSs can boost finance mobilization 4.1.3 Policy integration and coordination Since national governments in developing countries are the A recent assessment of urban climate finance flows by CCFLA largest finance providers for urban climate action, (2021) highlights the vastly insufficient amounts of urban climate developing robust and ambitious national climate policies finance invested in developing countries, including South Asia and strategies (e.g., NDCs, LTSs) that integrate low-carbon and SSA. Of the total estimated urban climate finance in 2017- urban development priorities are crucial, as they are a key 2018, the largest portion was invested in developed economies signal of the government’s sustained commitment to these and China. Moreover, while the origins of finance providers priorities. Systematic inclusion of city-specific targets in remain opaque, urban climate finance from emerging markets these strategies can enable cities to gain sustained support was committed mainly domestically (97 percent). This assessment from the national government for undertaking climate also found that national governments financing domestic projects action. Such integration can ensure policy predictability and were the largest finance providers overall (CCFLA 2021). This reliable financial support by making funding flows less analysis highlights that cities in developing countries primarily sensitive to changes in the country’s political landscape. depend on the national government for financing climate action. Clearly reflecting urban climate action in NDC funding needs Given their heavy reliance on intergovernmental transfers from assessments, investment plans, and subsequent finance the national budget for both urban development and climate mobilization strategies can facilitate the allocation of financial projects, the volume and flow of such transfers can affect the resources at city level to support actions that will deliver the greatest benefits. Considering urbanization-related challenges scope of climate-related interventions in cities in LICs and and opportunities in LTS processes can help embed both LMICs. As a result, regular and consistent funding from the near- and long-term climate investment needs at city level into national budget, underpinned by vertically integrated planning overall green transition priorities and translate them into and policy processes, is a key enabler for these cities to specific implementation plans and financing models. In implement climate-related projects (and attract international and countries where climate change is mainstreamed into national private finance). Lack of climate change mainstreaming or development planning (discussed in Section 3.1.2), such limited policy integration and coordination between national and integration would result in funding allocations to cities from the subnational governments on urban climate action can constrain national budget for climate action, bringing dependability to funding flows for climate-related projects in urban areas (e.g., intergovernmental transfers. intergovernmental fiscal transfers targeted at urban spending categories lack dedicated funding allocations for climate-related interventions). In such instances, the volume of funds flowing to 4.2.1 Integrative solutions cities may depend on the national government’s priorities and other competing urban service provision needs, deprioritizing funding for climate action. This could also undermine investor Integrative solutions for finance mobilization illustrated in confidence and be compounded by limited mandates and Figure 4.1 build on solutions related to policy frameworks abilities of city governments to raise revenues both from their under Pillar 1 (e.g., mainstreaming climate change in national own sources (e.g., taxes, fees) or debt-based instruments. development planning, empowering city governments, strengthening intergovernmental coordination). In addition, Moreover, lack of alignment between city- and national-level countries that are in the early stages of mainstreaming climate priorities can be an additional barrier for multi-year low- climate change in their national development planning (e.g., carbon infrastructure projects that need to overcome the conflict have limited integrated policy frameworks) or are in the between their long lead times and shorter government process of aligning the climate and urban development budgeting cycles, which can be affected by changes in policy agendas can use the approaches outlined below to administrations or shifting political priorities. overcome barriers to mobilizing climate finance. Figure 4.1: Integrative solutions for finance mobilization 45 Chapter 4. Strengthening finance mobilization at the local level for climate action Enhance communication on financing needs for Mainstreaming climate change in national development urban climate action planning and budgeting is an integrative solution that could enable regular and consistent funding flows for urban Establishing a framework under which cities and the national climate action in the long-term. However, LICs and LMICs government can coordinate on climate change policies can need to lay the initial groundwork to allow systematic help align city-level climate efforts with national climate inclusion of climate considerations in their budgeting planning initiatives. This could involve collaboration on the process. Instituting climate budget tagging (CBT) can serve development, update, and implementation of NDCs/LTSs. as a useful tracking mechanism and be the first step in this Within this collaborative framework, cities can provide direction. CBT is a tool for identifying, classifying, weighting, information on existing and planned urban climate projects and marking climate-relevant expenditures in a and associated financing needs to the national departments government’s budget system, enabling the estimation, responsible for the preparation and implementation of monitoring, and tracking of those expenditures. Such NDCs/LTSs so they can be considered for inclusion in tagging of climate-related expenditures can enable national investment plans. Cities can strengthen their negotiating and local governments to take stock of spending on climate, position and value proposition to secure funds for climate identify funding gaps in implementing their climate change action by coordinating their actions and approaching the priorities and plans, and determine the need for mobilizing national government jointly. Establishing a climate-focused additional resources (UNDP 2019). Therefore, CBT can network of city representatives can help this process and underscore cities’ roles in delivering climate action. facilitate discussions with the national government. This would allow smaller cities to become part of the dialogue and There are several analytical tools that support governmental benefit from potential funding allocations that would not be budgeting processes, such as the Public Expenditure and possible if they acted on their own. Further, this would enable Financial Accountability (PEFA) Program²⁶ (Box 4.2) and the cities with strong financial capacities to make a case for UNDP (2015) Climate Public Expenditures and Institutional greater authority to mobilize financing for planned climate- Review (CPEIR).² ⁷ While these typically target the national level, focused actions. Lastly, by strengthening coordination with city-level adaptations of these methodologies are currently being the national government, cities could seek to streamline developed to support urban budgeting processes. approval processes for urban projects that require national approval (e.g., large infrastructure projects), addressing concerns about securing all approvals, which may be a barrier to investor support (CCFLA 2021). Box 4.2: Climate responsive public financial management framework Facilitate cities’ access to domestic and international climate finance The PEFA framework for assessing climate responsive public financial management (PEFA Climate) is a set of supplementary indicators to the National governments can empower cities to access climate PEFA framework to collect information on the extent finance sources that are beyond their reach through to which a country’s public financial management targeted support and dedicated initiatives. International (PFM) system is ready to support the climate funds and development finance institutions have implementation of national climate change policies. specific eligibility criteria and processes for accessing The indicators aim to capture current practices in financing that could be too onerous for individual cities mainstreaming climate change in PFM by tracking (especially smaller ones) to meet. The national government aspects such as budget alignment with climate could create a program/initiative dedicated to aggregated change strategies, climate-responsive public city-level climate action that is consistent with the investment management, climate-related liabilities, requirements of international funds and institutions and and climate-responsive procurement. Many of these strategically aligned with national- and city-level priorities on indicators include questions on activities at climate. This aggregated approach can enable cities to subnational level, allowing the assessment of access funding for climate-related interventions from such consistency and integration across government sources at a lower transaction cost. Similarly, the national levels. Along with checking the applicability to, and government can facilitate cities’ access to domestic funding interaction with, subnational governments, the PEFA sources such as national development banks and private assessment includes a module on a climate- investors by deploying innovative financing instruments for responsive fiscal decentralization framework, which de-risking (e.g., guarantee facility). assesses climate-responsive fiscal transfers and PFM arrangements applied by subnational Pursue climate-informed budgeting governments. Analysis undertaken in this module and supported by the wider findings of the PEFA Earmarking governmental transfers (e.g., conditional transfers) Climate Framework can help national governments for climate-related actions allows cities to have reliable funding develop more integrated and climate-aligned public flows to support their climate investments. Alternatively, funding systems at national and subnational levels. national governments can include climate-related performance Source: PEFA 2020 and UNDP 2015. criteria for cities in their budgetary allocations to incentivize urban climate action. ²⁶ PEFA assessments can be carried out both on national and subnational (e.g., city or municipality) levels. As of 2022, 267 national and 166 subnational PEFA assessments have been completed, including 10 countries in South Asia and 47 countries in SSA. ²⁷ CPEIR is a diagnostic tool used by national governments to understand how well climate change priorities and concerns are integrated within a country’s national and subnational budget allocations and expenditure processes. CPEIR methodology (UNDP 2015) allows analysis of both national- and city-level policy objectives and how well their expenditures are aligned with those objectives. It can highlight inconsistencies in climate-focused expenditures allocated to specific sectors, regions, or cities. At city level, CPEIR results can demonstrate how much climate change-aligned funding they receive, which sectors this funding goes to, and how well these patterns are aligned with national and subnational climate change targets, highlighting sectoral and geographical alignment. 46 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Assessing the impact of urbanization trends and urban Interventions in urban areas that have a direct GHG emissions policies on current and future GHG emissions and impact include (i) investments in transportation infrastructure and evaluating the expected outcomes of urban climate housing development, sanitation, waste management, and green mitigation interventions require robust data (both national infrastructure and (ii) policies and regulations affecting land-use, and city level) and sound diagnostic approaches. Country- housing, and transportation sectors, consumer choices, and specific analytics can enhance policymakers’ understanding energy demand. Socio-economic implications of low-carbon of risks and opportunities associated with urban climate urban growth efforts on aspects such as employment, public mitigation and help integrate low-carbon urban growth health, or urban equality are also important considerations for considerations into national climate and development decision making since climate mitigation actions do not happen in planning processes. High-quality, transparent, and a vacuum and have social and economic impacts on households consistent data enables city governments to evaluate the and firms. It is therefore important to recognize and quantify the impacts of their climate interventions and effectively potential trade-offs and synergies with other priorities (e.g., communicate their costs and benefits to national poverty reduction, public health, disaster risk management) that governments, paving the way for their inclusion in national might be triggered by climate mitigation action in urban areas. climate change strategies such as NDCs and LTSs. In addition to supporting decision making on urban climate Given the complex interactions between urban sectors and action, data and diagnostics are also critical elements for actors along with diverging policy and investment priorities, systematically tracking and reporting impacts of low-carbon national and urban decision makers and regulators need to urban development efforts and associated climate finance strengthen their analytical abilities and understanding of low- flows at different government levels. With cities in LICs and carbon urban development pathways and the levers to achieve LMICs taking a prominent role in their low-carbon transition, them. This is particularly important since urban climate mitigation there is an urgent need to improve their data and diagnostic action is highly synergistic with other urban development capabilities. priorities and generates benefits beyond GHG emissions avoidance/reduction, such as improving resilience of households, This chapter discusses the role of data-driven decision making reducing traffic congestion and pollution, and enhancing the and impact tracking in enabling integration of urban climate action quality of life of urban dwellers (also discussed in Chapter 1). into policy processes and its implementation. It proposes ways to improve use of diagnostic tools and enhance integration of MRV Numerous models and tools exist for achieving a better systems for urban climate action in developing countries by quantitative understanding of GHG emissions impacts of urban addressing gaps and barriers. growth and outcomes of urban climate mitigation interventions. Robust datasets and analytical tools can facilitate (i) the Role of diagnostic tools in facilitating identification of current and future carbon footprints of urban 5.1 integration of urban climate action areas (and urban climate risks); (ii) a granular assessment of into NDCs and LTSs urban mitigation challenges and responses in key sectors including energy, transportation and mobility, waste, the built environment, and cross-sectoral aspects of urban systems; and Robust data and diagnostic approaches are crucial elements (iii) improved understanding of carbon lock-in risks, particularly in for integrating the low-carbon urbanization agenda in climate rapidly urbanizing areas, along with positive spill-over effects of and urban development policy processes. Augmenting such low-carbon transitions. Such diagnostics can support the approaches in developing countries can improve the evidence consideration of current and future GHG emissions growth in base for urban policy decisions and inform the ambition of countries’ urban areas and their GHG avoidance and abatement national- and city-level climate interventions. For example, potential in both climate planning (e.g., NDC) and urban urban mitigation diagnostics can provide critical insights to development planning (e.g., NUP) efforts at national level. They policy makers on the medium- and long-term impacts of can also enable development of country-specific urbanization technological, behavioral, and land-use trends in urban areas scenarios (e.g., by factoring in urban population and economic to develop pathways for longer-term economy-wide transitions growth trends and policy, regulatory, and technological in LTSs (including through modelling). Such analyses can also changes) that can be reflected in the country’s LTS and the highlight new mitigation opportunities in urban areas, which identification of concrete short- and medium-term policy and may contribute to enhancing national ambition on climate investment milestones. action (e.g., through more actions) and help identify more granular city-level actions in national climate change strategies. Improving evidence-based design of Similarly, strengthening data collection and reporting 5.1.2 climate-related policies and interventions processes is important for streamlining tracking of progress on in urban areas achieving medium- and long-term climate goals across different levels of government and entities to feed into the Data and diagnostics are crucial for creating a strong evidence national MRV system. base of urban mitigation challenges and opportunities to advance the design of impactful policies and investments. For instance, Enhancing understanding of low-carbon GHG inventories help understand the emissions baselines and 5.1.1 urban development pathways contribution of key sectors and activities at different levels of aggregation and spatial scales. Projections of emissions using tools or modelling can show how emissions will change in the Urban areas have complex spatial and temporal interactions absence of (or with existing) measures in both national and local between economic activity, demographic factors, land-use contexts under certain assumptions (e.g., population growth and transportation systems, employment sectors, and trends, income levels, global and national climate ambition). This environmental stressors. Influencing these complex facilitates setting and allocating targets at different jurisdictions — interactions and identifying measures to reduce cities’ carbon city, regional, and national—and for different sectors over the footprint require understanding how they work and impact medium- and long-term and identification of relevant actions to GHG emissions. This is even more important in LICs and achieve these targets. Diagnostics can also help quantify the LMICs since, as discussed in Chapter 1, near-term decisions impact of climate mitigation actions, both in terms of expected about infrastructure investments in these countries will GHG reductions and wider costs and benefits. This can support influence both their urban environment and the quality of life decision makers in developing policy and investment choices that of urban dwellers in the long-term and the efforts needed to minimize trade-offs and achieve the most impact and in tracking transition toward low-carbon urban development. overall progress in reducing emissions. 48 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Barriers to evidence-based urban climate However, many tools can be adapted to these regions, and 5.1.3 policy processes several have been developed to address their needs. For example, the Low Emissions Analysis Platform–Integrated Benefits Calculator is an accounting tool for air pollution and There is currently a large knowledge base of operational GHG emissions, which accounts for practices unique to reviews and online resources on the use of tools and models developing regions, such as wood-fired cooking stoves. The for assessing urban climate mitigation interventions—NDC GHG Abatement Cost Model (GACMO) is a rapid diagnostic tool Climate Toolbox,²⁸ World Bank Group (2020),²⁹ City Climate developed for developing regions with the aim of assessing Finance Gap Fund (2021),³⁰ GCoM for Climate and Energy GHG abatement costs. The easy-to-use spatial tool Urban Resource Library³ ¹ and the World Bank’s guide on choosing Performance has also been used in many developing countries. macroeconomic models for climate policy analysis (World Bank Quantitative urban models that assess the impact of new Group 2022c). Tools and models differ in their ability to transportation infrastructure (e.g., BRT) on settlement patterns simulate temporal dynamics and cross-sectoral interactions and and spatial income distributions have been piloted in Africa and in terms of their sectoral coverage and geographic scales. They South America (Tsivanidis 2018; Bird and Venables 2019). also vary in their applicability across regions. Some tools and methodologies enable benchmarking of different future An analysis of a non-exhaustive list of urban tools and scenarios and simulate combinations of policy measures. models (see Box 5.1) was undertaken for this report to: (i) Certain models specialize in a single task, such as forecasting identify key gaps that hinder data-driven integration of urban land-use change and urban growth, analyzing transportation climate change action in national climate planning processes patterns, or assessing energy systems. Other urban models in developing countries (discussed below) and (ii) determine capture more general interactions between processes in urban if the range of available urban tools and models sufficiently systems, most notably land use and transportation. covers the key diagnostics questions relevant to low-carbon urbanization, especially in rapidly urbanizing developing Models range from simple tools that can assess smaller or countries (discussed in Table 5.1). This analysis identified marginal changes of one intervention to full-scale models that several general limitations of tools and models:³⁴ can capture non-linear interactions³² and project long-term changes to the urban landscape. Urban models and tools can be characterized into ‘model families’ based on their different Most tools are focused on earlier phases of planning, characteristics (Box 5.1).³ ³ Some models enable users to including problem definition and formulation of policy explore the impacts of infrastructure, policy, or technology proposals, and few are available to support cities in the execution and implementation phases. choices and identify and prioritize investments and policy interventions that will have the greatest impact in terms of Many tools do not provide comprehensive coverage of avoiding or reducing GHG emissions. Others help identify potential impacts on poverty and equity. In addition, there interventions that can achieve development priorities with is uneven capacity across most model families to quantify lower GHG emissions. Such models can also highlight the co-benefits of low-carbon and deep decarbonization potential trade-offs and synergies between these goals and interventions and trade-offs with development priorities. other objectives such as jobs creation or poverty reduction and can be used for scenario testing of the long-term impacts of Not all tools assess GHG emissions, and not all models that different urban development pathways on GHG emissions do (e.g., global models) have detailed representation of trajectories to avoid undesired carbon lock-in. However, it is urban issues (e.g., how the urban form and the extent of important to note that the number of models capable of urbanized areas influence the distribution and densities of providing both sophisticated urban development scenarios and households, jobs, and services and shape energy demand in the resulting carbon footprint of interventions remains limited. cities). Therefore, assessing the contributions of different policy interventions to low-carbon development may require translating the outputs of one model into another. Limitations of diagnostic tools in informing low- carbon urbanization pathways and their impacts in Very few models have the ability or have been used to assess developing countries impacts of synergistic policies and cross-sectoral interventions, which is a significant limitation given the potential enhancing Many models are well-suited for use in developed countries, effects of the simultaneous implementation of various policies which have readily available data at high spatial resolution and through spillover effects and co-benefits. representative cause-effect relationships or elasticities. There is a significant lack of models tailored to cities in Africa, Asia, or The significant data requirements associated with a valid Latin America, limiting practitioners’ ability to sufficiently model setup may limit the number of tools that can be address analytical needs in regions where most urbanization is readily applied in developing countries given the current limitations of local data. expected to occur (e.g., in SSA and South Asia). ²⁸ A curated online resource to search for urban tools related to NDC preparation and planning by NDC Partnership. Available at: https://ndcpartnership.org/about-climate-toolbox. Accessed in November 2023. ²⁹ A World Bank review of Integrated Urban Planning Tools for Greenhouse Gas Mitigation supported by the Global Platform for Sustainable Cities and GEF. ³⁰ The “Urban Greenhouse Gas Modeling Tools” knowledge note is a primer to help cities and organizations working with cities understand and select available tools, based on their needs. ³¹ The library has instruments, applications, and algorithms that better inform decision making for cities and local governments, especially around planning, service provision, and regulatory assessments. This is also supported by an overview of tools prepared by GCoM. Bloomberg Associates and WRI (2021). ³² In the real world, sectors and activities influence each other and strongly interact with the spatial layout of cities. This means that processes or developments may reinforce or slow each other in non-obvious ways. Such “non-linear” dynamics cannot be represented when sectors and economic activities are modelled independently from each other. ³³ These model families include urban GHG inventory tools, rapid diagnostic tools, non-micro-founded spatial models, and micro-founded urban spatial models. ³⁴ Several of these findings are in line with outcomes of other reviews on the suitability of modelling tools for developing country contexts, such as GCoM (2021). 49 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Limited resources and technical capacities to use Approaches for strengthening evidence- 5.1.4 based decision making in support of urban diagnostic tools climate policy processes Entities at different government levels engaged in urban climate policy processes may not have the expertise to identify This section outlines key solutions that can be adopted in and apply diagnostic tools to address their specific policy developing countries to augment their ability to use needs. It may be difficult for non-specialists with limited climate- diagnostic tools to support climate-informed urban policy related expertise to formulate diagnostic questions that can processes (Figure 5.1). These solutions are focused on (i) support integration of low-carbon urban development improving cities’ capacities to use urban tools and models; (ii) considerations in national climate planning processes. While enhancing alignment between tools used for country- and rapid diagnostic tools or GHG inventories (which usually feature city-level diagnostics, and (iii) continual tailoring of urban accessible interfaces and user support) may be sufficient to models and tools to respond to policy needs in cities in provide quick assessments of impacts for smaller policy rapidly urbanizing countries. Broader integrative solutions interventions, larger, system-wide interventions and complex pertaining to strengthening intergovernmental coordination projects may require the use of specialized models that are and promoting collaboration and sharing of knowledge, tools, modified/tailored to address targeted and sometimes and resources (discussed under Pillar 1) can equally complicated questions. Setting up and running such models contribute to strengthening evidence-based decision making. requires modelling expertise, time, and resources, including for This section also discusses the main diagnostic questions obtaining external support (e.g., experts in modelling). that can be explored at different government levels to inform However, given the expected long-lasting impacts of urban better integration of low-carbon urbanization priorities into interventions, mobilizing resources for a robust and national climate planning processes. It also proposes a comprehensive assessment of their direct and unintended simple guide for selecting the most appropriate tools and impacts may justify such investment. models to provide urban climate policy-relevant insights. Figure 5.1: Solutions for strengthening evidence-based urban climate policy processes BARRIERS INTEGRATIVE SOLUTIONS Promote collaboration and sharing of Limitations of urban tools knowledge, tools, and resources and models to support Evidence-based policy processes diagnostic of low-carbon urban pathways Improve cities' capacities to use urban tools and models Enhance alignment between tools used for country-level and city-level diagnostics Limited technical capacities to use diagnostics tools Tailor urban models and tools to respond to the policy needs in rapidly urbanizing countries Improve cities’ capacities to use urban tools and models Entities engaged in climate policy processes relevant to As discussed in previous sections, the low-carbon urban urban areas at different government levels need support development agenda in rapidly urbanizing countries has several to select appropriate tools and models depending on the key characteristics that need to be considered when pursuing intended policy objectives, priorities of the diagnostics its integration into national climate and development planning being undertaken, and available resources. Choosing the processes (e.g., NDCs, LTSs). Table 5.1 summarizes the main ‘right’ tool or model is not a trivial task. The Guide for urban diagnostic parameters that help evaluate the outcomes selecting diagnostic tools and models proposed on pages and impacts of low-carbon growth and climate mitigation 52 to 57 can inform the choice of appropriate tools and interventions in urban areas and their relevance to low-carbon models to generate insights on the main urban diagnostic urbanization policy processes. parameters discussed in Table 5.1. Table 5.1: Main urban diagnostic parameters to assess implications of low-carbon growth interventions in urban areas Urban diagnostic parameters Relevance to low-carbon urbanization policy processes Urban form shapes energy demand in cities by influencing the distribution Impact of land-use patterns and spatial of infrastructure, services, and economic activity. Urban infrastructure and planning on the level of demand/supply the built environment are long-lived assets that embody triple carbon lock- of urban services, travel demand, in in terms of their construction, operations, and demolition (Creutzig et al. infrastructure, and the built environment 2016b; Seto et al. 2016; Ürge-Vorsatz et al. 2018) and influence the mitigation potential of urban areas (based on Lwasa et al. 2022). ³⁵ These are GHG emissions embodied into materials used to construct urban infrastructure, such as concrete, steel, and insulation. 50 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Impact of sectoral technology choice on The choice of technologies, materials, and infrastructure that have the level of demand/supply of urban different carbon intensities will drive urban GHG emissions trajectories services, travel demand, infrastructure, through demand for energy, mobility, and urban services and and the built environment embedded or material-related³⁵ GHG emissions. Cross-sectoral interventions treat urban areas as the nexus of energy and urban form that can contribute to reductions in both material-related and Impact of cross-sectoral interventions on energy-related GHG emissions while enabling housing and mobility the demand for urban services and services to benefit the population. An example of such a strategy is infrastructure electrifying mobility, while decarbonizing electricity and energy carriers and switching to net-zero materials and supply chains (based on Lwasa et al. 2022). Impact of climate mitigation The impact of urban climate mitigation interventions (e.g., changing interventions on energy demand and/or street lighting) on energy demand and/or GHG emissions (e.g., reduction on GHG emissions generated by extending car-free zones). Economy-wide climate mitigation policies such as emissions trading schemes, eco-labelling regulations, and adoption of low-carbon vehicles may contribute to achieving broader urban sustainability goals. System- Impact of economy-wide or sectoral wide interventions such as spatial planning for compact urban growth climate mitigation policies on urban supported by climate policies can help meet both climate mitigation and development indicators development goals in urban areas, for example, by improving access to low-carbon transportation modes and reducing travel demand and air pollution. Evaluating economic impacts of climate interventions such as transit- Economic impacts of climate mitigation oriented development on changes in housing rents, incomes, and access interventions to jobs can inform whether and how such interventions positively impact employment and the livability and competitiveness of urban areas. Climate policy interventions in urban areas lead to social and Social and environmental co-benefits environmental co-benefits or unintended positive impacts such as and unintended positive impacts of reduced congestion, improved air quality, and improved access to climate policy interventions services. Climate policy interventions may result in negative impacts or trade-offs with other urban development objectives, therefore, designing policies and infrastructure solutions in a way that fosters accessibility, equity, and Impact of climate mitigation inclusivity for disadvantaged groups is essential (Viguié and Hallegatte interventions on poverty, income 2012; Sharifi 2020; Pörtner et al. 2021). For example, climate mitigation distribution, equity, and informality measures can reduce health risks arising from energy poverty (e.g., burning biomass) especially among vulnerable groups such as the elderly and those living in informal settlements (Monforti-Ferrario et al. 2018; Lwasa et al. 2022). 51 Guide for selecting diagnostic tools and models An easy-to-use guide developed for this report can support (ii) Rapid diagnostic tools explore the mitigation users in selecting appropriate diagnostic tools and models potential and costs of various policies and depending on the intended purpose, priorities, and available interventions (e.g., fuel switch), without fully resources. This guide is underpinned by the analysis of modelling underlying mechanisms and interactions select urban tools and models undertaken for this report between sectors or spatial representations. These (see Box 5.1). tools offer quick insights, and many have user- friendly interfaces. Examples include Advanced The guide is structured as follows: Practices for Environmental Excellence in Cities (APEX) and its predecessor Climate Action for Urban 1. It categorizes the various urban diagnostic tools and Sustainability (CURB), which are widely used across models into “model families” to direct users and decision regions and include user support. Adaptation and makers toward a group of tools relevant for addressing Mitigation Interaction Assessment (AMIA) is a tool for their policy objectives. identifying shared benefits of adaptation and mitigation actions, and the Greenhouse Gas 2. To arrive at a specific model choice, it then outlines a set Abatement Cost Model (GACMO) is appropriate for of criteria, such as common technical abilities, sector creating country-level GHG abatement cost coverage, and usability and robustness of models, to assessments in developing countries. Other address specific policy-relevant questions. These criteria examples include the Action Selection and can assist the user in translating the key diagnostic Prioritization (ASAP), City Infrastructure Footprint and parameters relevant to low-carbon urbanization (Table Action Analysis (CIFAA), ClearPath, Coefficient 5.1) into relevant model abilities. Correction, City Performance Tool (CyPT), and Strategy-based Model for Low Carbon Cities (SMLC). 3. Finally, a high-level decision tree (Figure 5.2) enables the user to identify specific model families based on the (iii) Non-micro-founded spatial models represent intended purpose and priorities of the diagnostic. the behaviors of economic agents,³⁶ relying on assumed and mostly stable empirical relationships to simulate urban spatial extent, population distribution, 1 Model families economic activity, travel behaviors, and climate vulnerabilities. Examples include Urban Performance and UrbanFootprint, which are very accessible tools Urban tools and models can be categorized into “model with a track record of application for decision families,” which loosely correspond to distinct modelling making. Urban Performance, which can be used in traditions that usually share several key features. This all parts of the world, tests development scenarios categorization can guide decision makers and users toward with indicators for environmental, economic, and the group of tools best suited for addressing their policy societal welfare considerations, while UrbanFootprint needs (see Box 5.1). focuses on climate adaptation and urban resilience in the United States and Mexico. (iv) Micro-founded urban spatial models represent Box 5.1: Urban tools and models: Understanding underlying mechanisms explaining the behavior of common features to support tool selection individual economic agents (e.g., construction or locational decisions) and the resulting outcomes This Guide comprises four main families of urban from their interaction—the land-use patterns and tools and models, applied at the city level. These spatial distribution of populations, economic tools and models are not suitable for expanding activities, and real estate prices. Agents’ behaviors the assessment beyond city level: are fully described and micro-economically founded and have explicitly represented market mechanisms. (i) Urban GHG inventory tools support the RELU-TRAN (Regional Economy, Land Use and development of GHG emissions inventories that Transportation Model) and NEDUM-2D (Non- can be deployed to understand cities’ current Equilibrium Dynamic Urban Model) are models emissions sources and monitor trends. Most grounded in urban economics. SLEUTH (Slope, land inventories are based on the Global Protocol for cover, excluded regions, urban land cover, Community Scale Greenhouse Gas Inventories transportation, and hill shades) and SIMPLAN (GPC) accounting method, which is an adaptation (SIMplified PLANning Model) both simulate future to the city level of IPCC accounting standards. urban growth, and TRANUS and UrbanSim model The City Inventory Reporting and Information land-use interactions. Other models in this family System (CIRIS) developed by the C40 Cities include Agent iCity, Agent-based market diffusion, Climate Leadership Group is also a widely used SimMobility, and UEFM (Urban Energy Footprint tool for creating emissions inventories, relying on Model). Quantitative urban models (economic the GPC standard. Other examples include the geography models) can explain agglomeration Google Environmental Explorer, which is based economies and welfare effects and simulate the on Google proprietary data, Emission Sources effects of significant interventions, such as the Account (ESA) model, Global Emissions Model for development of a new city district, but need further Integrated Systems (GEMIS), GHG Contribution development for their use in GHG emissions Analysis, and the Long-range Energy Alternatives assessments. Examples include the Ahlfeldt model Planning— Integrated Benefits Calculator (LEAP- (2015), Bird and Venables Model (2019, 2020), IBC), which is particularly relevant for developing Heblich reduced form model (Heblich et al. 2020), countries. as it can account for practices that are Tsivanidis model (2018), Sturm model (Sturm et al. unique to these countries. 2021), and Zárate model (Zárate 2022). 53 ³⁶ Depending on the models, economic agents can be citizens, families, dwellings, firms, and governments. Guide for selecting diagnostic tools and models specific, policy-relevant questions, including their user 2 Selecting diagnostic tools friendliness and accessibility (e.g., data requirements, methodological transparency, knowledge prerequisites, and available support), the thoroughness of their scientific review, This Guide identifies common technical abilities and sector and the extent to which they have been applied in coverage of urban models and tools as criteria for model developing countries. Each of the criteria is discussed in choice (see Figure 5.2). It also provides a set of criteria to detail below and can inform the use of the high-level determine the usability and robustness of models in addressing decision tree for model selection. Figure 5.2: Criteria for selecting models: (a) Model abilities and (b) Usability and robustness (A) MODEL ABILITIES Spatial Context Geographic scale Suitability for different geographic regions Sectoral Representation Coverage of multiple sectors of the urban economy. Description of the energy demand structure and characteristics of the study area. Simulation of processes, interactions and interventions Impact of land-use patterns and spatial planning on the level of demand/supply of urban services, travel demand, infrastructure and the built environment Impact of sectoral technology choice on the demand/supply of urban services, travel demand, infrastructure and the built environment Impact of cross-sectoral interventions on the demand for urban services and infrastructure Impact of interventions on energy demand Impact of interventions on GHG emissions (from stationary and mobile emitters) Impact of economy-wide or sectoral climate mitigation policies on urban development indicators Economic impacts of interventions Social and environmental co-benefits and unintended impacts of climate policy interventions Impact of interventions on the level of poverty, income distribution, equity, and informality (B) USABILITY AND ROBUSTNESS Robustness and Usability Validity Data requirements Sensitivity Methodology transparency Validation of model performance through the Level of knowledge prerequisites recreation of historical features. Support available Scientific validation Time requirements 54 Guide for selecting diagnostic tools and models tree illustrated below is intentionally inexhaustive as it aims High-level decision tree for to provide stylized, easy-to-follow diagnostic parameters 3 model selection that a modelling tool should be able to address. The decision tree summarizes the outcomes of the review of tools and models undertaken for this report and suggests The key diagnostic parameters relevant to low-carbon the model families that could be suitable for addressing urbanization (Table 5.1) can be translated into relevant model diagnostic questions based on their common technical abilities. The set of guiding questions in the high-level decision model abilities and sector coverage (see Figure 5.3) Figure 5.3: High-level decision tree for model selection based on intended purpose and priorities of the diagnostic Yes Assess current urban GHG emissions GHG Inventory Tools Assess impacts from a new policy, technology or urban project on GHG emissions City-level and specific interventions Yes Yes Perform a rapid assessment without spatial Rapid Diagnostic dimensions Tools No Perform an assessment including spatial dimensions Yes Detailed modeling of underlying urban No Non-micro-founded dynamics, feedbacks and temporal evolutions urban spatial models Yes Micro-founded urban spatial models Inform about macro-economic variables (e.g., growth, employment) and assess implications Country-level and global trends of mitigation policies for systems of cities Economy-wide models Inform about long-term socio-economic scenarios Global integrated and climate change, assess possible outcomes of assessment models large-scale mitigation policies 55 Guide for selecting diagnostic tools and models The impact of sectoral technology choice on the level of 4 Model selection criteria demand/supply of urban services, travel demand, infrastructure and the built environment: This sub-criterion describes whether the model can reflect the impact of technologies, materials, and infrastructure with different carbon (a) Model abilities intensities on the evolution of urban development indicators Spatial context that will, in turn, drive urban GHG emissions trajectories. The impact of cross-sectoral interventions on the demand Mitigation interventions can occur at multiple urban scales, from for urban services and infrastructure: This sub-criterion households and blocks to districts and city regions, and can be focuses on whether the tool or model can assess the impacts implemented as stand-alone sectoral strategies (e.g., increasing of cross-sectoral interventions such as circular economy energy efficiency for appliances) or as system-wide actions (e.g., approaches or integrated urban and transportation planning. transportation infrastructure investments, housing regulations) (Lwasa et al. 2022). In addition, demographic, social, economic, The impact of interventions on energy demand: This sub- and political factors vary between cities and may affect the criterion helps identify whether the model or tool can evaluate uptake of interventions. These criteria describe the scales at the impacts that various interventions may have on energy which a model or tool can be applied and its suitability for demand. These may include, for example, the change in energy different geographic regions: use from switching city streetlights to LED. Geographic scale: This sub-criterion pertains to the scale at The impact of interventions on GHG emissions (from stationary which the model can be applied (e.g., city, national, regional, and mobile emitters): This sub-criterion helps determine whether or multiple scales). This is useful for determining the type of the model or tool can evaluate the impacts that various interventions may have on GHG emissions (e.g., the GHG assessment that the model or tool can be applied to and emissions reduction generated by improving waste disposal whether it can be used to support country-level comparisons. practices or installing rooftop solar panels in an urban area). Suitability for different geographic regions: This criterion The impact of economy-wide or sectoral climate reflects the context in which models have been applied or mitigation policies on urban development indicators: This to which they can be applied. Most importantly, it helps sub-criterion helps assess whether the tool or methodology determine whether the model may be applied to different can simulate the impacts of various economy-wide or development statuses and levels of informality in the sectoral climate mitigation policies such as vehicle fuel economy. standards or fiscal incentives for low-carbon vehicles. Sectoral representation The economic impacts of interventions: This sub-criterion focuses on whether the model or tool can indicate the Urban mitigation actions can focus on a single sector or include economic impacts of interventions such as investment costs, multiple sectors. Some of these actions can have long-lasting and changes in real estate prices, incomes, and job creation. far-reaching impacts beyond direct sectoral effects. Urban energy The social and environmental co-benefits and unintended infrastructure often operates as part of larger energy systems, impacts of climate policy interventions: This sub-criterion focuses offering various options for electrification, decarbonization, and on whether a model can show the social and environmental co- energy-efficiency improvement in urban systems (Lwasa et al. benefits or unintended impacts of climate policy interventions. 2022). The IPCC Sixth Assessment Report distinguishes between two broad categories of urban mitigation strategies: (i) strategies in The ability of the model to simulate the impact of key sectors, including clean energy, sustainable transportation, interventions on the level of poverty, income distribution, and construction, for which the coupling of sectors³⁷ can be equity, and informality: This sub-criterion focuses on whether enabled through electrification and (ii) strategies that focus on the model or tool can predict the varying impacts of climate emissions reduction through a more systematic or fundamental interventions on different social groups or their implications on understanding of urban design, urban form, and urban spatial poverty and income distribution within an urban area. planning and that propose synergistic scenarios for achieving carbon neutrality (Lwasa et al. 2022). (b) Usability and robustness of models The following criteria characterize sectoral representation in modelling tools: In addition to model abilities, other parameters that should be considered to ensure that the diagnostic tool is fit-for- Coverage of multiple sectors of the urban economy: This purpose in a specific context include: (i) user friendliness and criterion focuses on whether a model provides granularity accessibility of the models and tools, (ii) how thoroughly they at the sectoral level and the sectors it covers. have been reviewed, and (iii) the extent to which they have been applied in case studies. Description of the energy demand structure and characteristics of the study area: This criterion helps show Usability whether the model describes the energy demand and energy production system(s) within the study area. Usability is assessed based on four sub-criteria that describe how adaptable the tools and models are to different Simulation of processes, interactions, and interventions requirements and how much expertise their use may require. Several criteria can be used to identify whether and how the Data requirements comprise the data inputs required from tools and models can reflect specific urban diagnostic the user to produce an output. Understanding the data parameters that need to be assessed to evaluate implications of requirements for various tools and models is important to low-carbon interventions, including in terms of GHG emissions, determine where they can be applied and whether they can urban socio-economic indicators, and potential synergies and be supported by online databases/proxy data. This may also inform future needs and scope of data collection exercises. trade-offs with other urban development priorities: Methodological transparency is the extent to which the The impact of land-use patterns and spatial planning on the algorithms or underlying assumptions employed within the level of demand/supply of urban services, travel demand, tool or model are documented and accessible to the user. infrastructure and the built environment: This criterion can This sub-criterion helps in understanding how easily the user help determine whether the tool or model reflects the spatial can follow the algorithms within the tool or model, as this can configuration of urban infrastructure and the relationship potentially affect the adaptability of the approach used by the between the intervention and demand for/supply of urban model to the users’ diagnostic needs/context and the ability services, built infrastructure, and travel demand. to meaningfully interpret the outcomes produced. ³⁷ There is no universally agreed definition of the concept of ‘sector coupling’. It pertains to, for instance, interconnecting or integrating energy- consuming sectors. In its report, “Sector Coupling in Facilitating Integration of Variable Renewable Energy in Cities,” IRENA defines sector coupling as the process of interconnecting the power sector, especially to support integration of high shares of variable renewable energy, with the broader energy sector (e.g., heat, gas, mobility) (IRENA 2021). 56 Guide for selecting diagnostic tools and models Level of knowledge prerequisites: This sub-criterion involves the information, skills, and knowledge required to set up and run the model or effectively employ the As a result, the BRT system failed to attract sufficient approach to produce useful and meaningful outputs. This demand from private vehicle users. In 2016, the consideration is important to determine how easily an World Bank’s City Planning Labs, the Indonesian approach can be adopted by non-experts, especially if the government, authorities from Semarang, including available level of support is low. the city’s development planning agency, and other Level of support available: ‘Support’ may include the help stakeholders developed a concept for the desks, tutorials, and online communities from which support development of Semarang. They developed more can be obtained, availability and usefulness of regularly than 100 possible development scenarios with a time updated documentation, and training. This sub-criterion, in horizon of 2030, considering a range of interventions combination with the level of expertise needed to effectively such as alternative public transportation modes and implement a model, helps determine the overall level of spatial planning options. The socio-economic and external support that may be required for an assessment. environmental indicators used to analyze the scenarios included proximity to jobs, schools, public Time requirements: This shows how much time and spaces, sports facilities, and places of worship. The expert effort are required to run the model. The time two reference scenarios were a BAU situation and requirements depend on (i) the readiness and the city’s Detailed Spatial Plan (RDTR) for 2011-2031. availability of the required input data, which may take weeks or months to collect, and (ii) the readiness of the tool or model to address the specific question. More The Urban Performance tool was used to evaluate complex models tend to require adaptation and fine- the selected scenarios and determine how they tuning, often with involvement of experts. performed against the selected indicators. The choice of this model was driven by the following diagnostic Robustness and validity requirements and model abilities: (i) the modelling effort first focused on parameters related to the spatial configuration of the city, e.g., the spatial These criteria enable the user to assess the overall ‘certainty’ of distribution of population densities and the layout of the models or tools and whether the outcomes are robust for a specific set of assumptions and to integrate relevant uncertainties. the transportation network, and this was followed by (ii) an analysis of diagnostic indicators comprising Sensitivity. This sub-criterion focuses on whether a access to transportation infrastructure and urban sensitivity analysis has been undertaken to determine the amenities, the capacity of the transportation system, impact of different parameters on model or tool outputs and and reduction of existing congestion. ultimately the robustness of the results. Such sensitivity analyses try to demonstrate whether small changes in As outlined in Figure 5.3, the spatial dimensions calibrated model parameters lead to large changes in model of a diagnostic can be addressed by models results. Typically, a robust model is one that can afford within the spatial model families. Further, as this uncertainties in parameters without large implications for project did not include a detailed assessment of model results. underlying urban dynamics, feedback, and temporal evolutions, its diagnostic needs were Validation of model performance through the re- appropriately addressed by the Urban creation of historical features. In addition to sensitivity analysis, more trust can be placed on model outputs Performance tool, which is categorized in Box 5.1 that have been validated. This criterion helps assess as part of the non-micro-founded urban spatial whether the validation of model performance has been model family. The fact that Urban Performance undertaken for a particular tool or model. has been previously used in several developing countries increased its suitability for the project, Scientific validation. This criterion helps determine while the user support and assistance in setting whether the identified tool or model has been peer up Urban Performance provided by its publisher, reviewed. This can give an additional indication of the CAPSUS, enhanced its usability. quality of the approach and the level of trust that can be placed in the outputs. The Semarang scenario assessment led to the selection of the Transit Oriented Development Box 5.2. illustrates how the guide for selecting tools and models (TOD) program, which focused on improving can be applied in practice through the example of the city of mobility by developing areas and densifying the Semarang (Indonesia), where Urban Performance was used to develop sustainable growth scenarios. population near existing public transportation infrastructure. The TOD minimized investment costs and brought significant benefits in terms of access to transportation. In contrast to Semarang’s Box 5.2: Forecasting sustainable growth initial RDTR scenario, no additional infrastructure scenarios for Semarang, Indonesia using investments were required. The TOD scenario was Urban Performance associated with municipal service cost savings of 13 percent (when compared to the baseline Semarang is Indonesia’s ninth largest city, with a scenario). The densification that was modelled population of 1.65 million in 2022. Sharp population within the TOD scenario was found to contribute to growth has added pressure on the city’s a 20 percent increase in access to public transit transportation system, which has not been upgraded. when compared to the current spatial plan in the The number of private vehicles in the city more than city. In addition, this scenario contributed to a doubled from 2005 to 2014, leading to significant reduction in energy consumption for mobility by 16 traffic congestion. The city introduced several BRT percent and associated GHG emissions reduction lines, but they lacked sufficient integration with the in the city’s transportation sector by 9 percent. rest of the public transit system, did not have Adapted from: Urban Performance (2018) segregated lanes, and had old vehicle stock. and https://www.urbanperformance.in/case-studies/semarang 57 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Enhancing alignment between tools used for country- Build a knowledge base on impacts of urban climate action and city-level diagnostics across policy agendas. Given the stakes of getting urbanization right both for development and the climate, Urban tools and models usually do not allow for expanding the governments need to build a knowledge base to consolidate assessment beyond the city level and have limited ability to data about wide-ranging impacts of climate actions on urban directly inform country-level diagnostics on low-carbon development indicators. An improved understanding of urbanization. However, they can be better aligned with national synergies and trade-offs between these two agendas can diagnostic efforts by ensuring that they reflect comparable help governments make informed decisions on a range of economic trends and climate change impacts. These inputs can topics pertinent to cities such as land-use planning and be provided by two model families—economy-wide and global regulation, housing policies, transportation pricing, and integrated assessment models (IAMs),³⁸ which focus on infrastructure investments. It can also enhance acceptability assessing the current state of an economy and worldwide of, and support for, urban climate action by a large set of trends in economic development and climate change. stakeholders. For complex systems such as cities, where Economy-wide models are routinely used for economic and interventions can have wide-ranging impacts across different financial forecasts. This group includes dynamic stochastic policy agendas such as poverty, inequality, labor market general equilibrium models, computable general equilibrium outcomes, and climate, such a knowledge base is typically models, and other types of macroeconomic models. Integrated constituted through models that can capture the main assessment models are large and sophisticated models, mechanisms that define urban areas. While model primarily intended for developing climate scenarios and development and calibration may appear cost-intensive, understanding GHG emissions sources and consequences of difficult, and time-consuming, these costs should be weighed climate change policies. These models form the foundations for against the risks of making policy or investment mistakes that climate scenarios published in academic literature and the could negatively impact urban dwellers over several decades basis for many climate assessments, including those or lead to carbon lock-in. undertaken by IPCC. Some IAMs have been coupled with sectoral urban models. Specific urban effects are often not Enhance understanding of contributions of mitigation resolved in these models. If urban economies are represented, interventions in rapidly urbanizing countries. There is a it is usually through the inclusion of urban and rural household significant gap in the suitability of reviewed models and classifications that have different economic characteristics, tools for urban climate mitigation diagnostics in developing consumption patterns, and responses to policies. countries, particularly rapidly urbanizing LICs (e.g., only a few models have been calibrated for cities in LICs that have Even if these model families are distinctly different from those high levels of informality). This is a concerning limitation from of urban models, ensuring alignment between the models a climate mitigation perspective, as most urbanization will chosen for country- and city-level diagnostics is important. This occur in SSA and South Asia. Urgent efforts should be made can help overcome the limitations of urban models that only to better tailor existing models to these contexts and more focus on one city at a time when decision makers might be analysis should also be undertaken on recommendations interested in the country’s urban system as a whole or intend to for developing new models for such contexts. For instance, apply policy changes to all cities simultaneously. In this context, occupations are predominantly informal in Africa (76 economy-wide models and global IAMs can be useful for urban percent) and the Middle East (64 percent), significantly climate mitigation diagnostics from two main perspectives: higher than at the global level (44 percent) (ILO 2018). Recent research demonstrates that informal labor can be They can provide the necessary inputs for urban models significantlyreduced by the introduction of efficient and to reflect the expected impacts of large-scale economic affordable transportation (Zárate 2022), and new models trends, climate change, and policies for assessing low- can forecast such informality reductions and resulting carbon urbanization pathways and short-term climate welfare gains from public transportation (Tsivanidis 2017; mitigation measures. More specifically, these models Sturm, Takeda, and Venables 2022). generate socio-economic scenarios (e.g., demographic trends, income levels, inequality levels, carbon tax levels, Leverage insights from spatial models by including GHG fuel prices) that can feed into urban models as inputs emissions impacts. The insights from new quantitative (downscaling). They can also provide insights on the spatial models can be leveraged by including assessments impacts of large-scale mitigation policies on urban of GHG emissions impacts. Promising work has been economies and people, for example, by high-level undertaken recently, particularly with quantitative spatial modelling of urban systems. This ensures consistency models adapted to Colombia, Mexico, and Uganda, to between macro dynamics and urban dynamics. understand impacts of new transportation infrastructure and induced behavior change on informality and welfare Urban model outputs can be used to inform and fine- gains. However, these models do not currently reflect tune global models by providing better calibrated associated changes in energy demand and GHG elasticities or parameters. For example, this can take the emissions. They can be expanded with energy and form of an elasticity linking compactness or fuel prices to emissions calculation algorithms along with specific energy use for transportation in urban areas, resulting in applications to inform policy processes dedicated to the a mitigation potential. In turn, economy-wide models development of NDCs and LTSs, especially in rapidly such as the World Bank’s Macro Fiscal Model (MFMOD) urbanizing countries. Targeted technical assistance from may also be used to assess the effects of interventions international climate funds, development partners, or such as carbon pricing on macroeconomic indicators or academia may be required to support these efforts. GHG emissions in multiple urban areas. Explore opportunities of emerging technologies to reduce data gaps. Beyond existing models, use of emerging Tailoring urban models and tools to respond to policy technologies such as artificial intelligence and machine needs in cities in rapidly urbanizing countries learning can be explored for assessing the mitigation risks and potential in urban areas. These approaches may The solutions discussed below could help address the general become increasingly important (Kaatz-Dubberke and Kehl limitations of models and tools in supporting evidence-based 2020) and can possibly improve urban modelling, including decision making and policy processes in rapidly urbanizing by filling data gaps (Milojevic-Dupont and Creutzig 2021). countries. Implementing these solutions requires a concerted This could be particularly relevant in the context of rapid effort at different levels of government and support from a urbanization in LICs and LMICs that is often characterized broader set of stakeholders, such as international urban by low availability of survey or official data. However, such initiatives, development partners, and academia: approaches are still being researched. ³⁸ Examples of Economy-wide models are: CPAT (Carbon Pricing Assessment Tool), MFMOD (The World Bank Macro-Fiscal Model), ENVISAGE-MANAGE, GIDD (Global Income Distribution Dynamics), FSAP (Financial Sector Assessment Program), SHOCKWAVES/UNBREAKABLE, and LTGM (Long-Term Growth Model). Examples of global Integrated Assessment models (IAMs) include: ETP (Energy Technology Perspectives), REMIND (Regional Model of Investment and Development), GCAM (Global Change Analysis Model), IMAGE (Integrated Model to Assess the Global Environment), and MESSAGEix (Model for Energy Supply Strategy Alternatives and their General Environmental Impact). 58 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Consistent and comparable data tracking and reporting Integrating systems for tracking processes support the integration of urban mitigation action into 5.3 climate action NDCs and LTSs by: Enabling transparent and effective data-driven decision making. Consistent and comparable data across the various processes undertaken by different entities to plan, implement, and track the Providing quantified evidence of GHG emissions impacts outcomes of urban mitigation actions are important prerequisites from urban mitigation actions and/or specific gaps in their for their integration into national climate change strategies such performance. as NDCs and LTSs. Such data provide an enhanced understanding of mitigation opportunities in urban areas at the Allowing the assessment of climate finance opportunities. planning stage. At the implementation stage, consistent and comparable data increase the transparency of monitoring and Helping build the climate investment pipeline. reporting (e.g., by avoiding double-counting of emissions reduction toward mitigation pledges under UNFCCC (Schneider Facilitating consistency in assumptions by various entities et al. 2014) and enable a robust assessment of the country’s that are co-creating low-carbon urbanization pathways for progress toward GHG emissions reduction goals. Importantly, developing strategies such as an LTS. effective tracking systems that allow systematic and timely collection, consolidation, and analysis of data on GHG emissions By using high-quality, transparent, and consistent data to impacts of low-carbon interventions in urban areas can improve underpin target setting and design of implementation policy design, help identify barriers to their implementation and strategies, national and city governments can ensure that enhance their uptake. As a result, it is crucial to use consistent climate-related policies and actions address critical GHG methodologies, data, assumptions, and parameters across emissions drivers, verify the extent of progress, and generate different levels of government and entities for measuring and important feedback for ongoing policy processes, particularly reporting on GHG emissions and impacts of mitigation actions. to inform their adjustments (e.g., strengthening targets, increasing ambition). For instance, this allows governments to There are several processes (e.g., data collection, analysis, target evaluate whether the short- and medium-term actions setting, policy development) that underpin the core elements of (typically set out in NDCs) are delivering results consistent MRV systems (see Box 5.3). Such processes need to be aligned with long-term pathways outlined in LTSs and, in case they fall through clear communication and collaboration between different short, strengthen the targets and relevant measures in the entities across government and implementing agencies to enable subsequent NDC update. Such efforts can also help devolve timely and transparent data flows and aid in the aggregation of responsibility for delivering on targets and enable targeted impacts and results at the national level and disaggregation at allocation of funding flows to the implementing entities in local levels. There is a vast body of literature on MRV systems to urban areas. This can also enable governments to access support climate action, including on integrated MRV systems. This various sources of climate finance (especially international section briefly outlines the core challenges faced by LICs and funding) to support specific measures. LMICs in developing integrated MRV systems and offers solutions to overcome them. Most countries use several MRV systems for different stages of climate action or at different levels of government. A fully integrated MRV system consolidates information (e.g., GHG Importance of integrated MRV systems for emissions inventories, tracking of climate mitigation action and 5.3.1 integration of urban climate action climate finance flows) into one database led by one central entity. Such integration has several benefits for both national and subnational levels (see Box 5.4.). MRV integration Pursuing integration of MRV systems at different government processes can ensure a clear demarcation of roles and levels can be an important enabler for local governments as key responsibilities at each level as part of integrated institutional actors to deliver climate action. Data collection (based on a clear structures. However, because of various challenges such as set of monitored parameters), tracking, and reporting are the insufficient intergovernmental coordination or technical issues core elements of MRV systems, which are the backbone of (see below), it is not always possible or most efficient to create a climate planning and implementation processes (see Box 5.3). fully integrated MRV system (ICLEI 2021; Wartmann et al. 2021). Box 5.3: MRV process as defined under UNFCCC Collectively, MRV and transparency processes enable MRV and transparency are terms used in reporting under answers to questions, in the context of action and UNFCCC. Both concern providing information related to progress on climate change, such as “Where are we? climate change action and its results at national level, Where are we going? How fast are we getting there? Are e.g., progress toward climate change targets. Reporting our responses effective?” The MRV-related elements under UNFCCC aims to generate trust among Parties and involved in planning and tracking climate action and the allows them to understand how they are progressing main considerations for each for more effective integration toward combatting the impacts of climate change. are summarized on Figure 5.4. Figure 5.4: MRV-related elements for planning and tracking climate action GHG inventory (baseline) Mitigation goals and targets Imnplementation and reporting Consistent methods, data, Consistency of disaggregation assumptions, parameters by geography or sector Mitigation action Understand impacts of GHG emissions measures through consistent data GHG projections (BAU) Mitigation actions impact Consistent assumptions to underpin Consistency of data to track and emission projections aggregate / disaggregate impacts Inform updates and revisions GHG pathways Action plans (mitigation scenarios) Consistent assumptions to underpin Reflecting shared priorities scenarios and actions Source: PSource: Based on Ricardo 2021. 59 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration An alternative solution for enabling the integration of urban MRV literature has identified several common technical climate action into NDC or LTS processes is to pursue better challenges associated with developing a well-functioning alignment of MRV systems. Aligned MRV systems can still integrated monitoring system to track climate actions (GIZ ensure comparability of GHG emissions data and climate NAMA Toolbox 2014; EcoMetrix Africa 2015; ICLEI 2016a; action being tracked and realize the benefits outlined above by ICLEI 2016b; C40 2019; WRI/C40 2014). Many of these relate using the same emissions factors, definitions, and estimation primarily to GHG inventories, which is the first step for methods at local and national levels. Compared to fully subnational governments in understanding and managing integrated MRV systems, aligned MRV systems are simpler emissions. Later steps in the MRV process such as mitigation and often quicker to implement as they don’t require the action tracking, projections, pathways modelling, and tracking creation of a central database with complex governance of climate finance flows are typically in early stages of mechanisms. This may also provide greater flexibility to development for many cities in developing countries. respond to local and national policy needs (while a fully integrated system may pose the risk of only serving one entity). While a city-level GHG inventory is a prerequisite for creating an evidence base to plan and design mitigation actions,³⁹ city governments face numerous obstacles to compiling such inventories. There also are significant challenges in complying Box 5.4: Relevance of integrated MRV systems with MRV requirements for reporting on mitigation action and to support evidence-based climate policy climate finance flows. Availability of reliable high-quality data processes on both activities and GHG emissions is often a major barrier in cities in developing countries. For instance, cities might have limited or incomplete data on certain activities or sectors Integrated MRV systems are the most relevant within the city boundary (e.g., unreliable data supply) because for the following components of climate policy of factors such as (i) lack of a formal process for data processes: collection, (ii) lack of incentives for data collection and limited accountability, and (iii) lack of emissions factors specific to the GHG inventories to understand baselines and local context or mismatched data on the baseline. City entities the contribution of key sectors and activities in charge of data collection may be unable to aggregate data at different levels and spatial scales. acquired from multiple sources because of inconsistent formats and categorization or misaligned methodologies or Projections of future GHG emissions to understand timeframes. Additionally, cities often have limited technical how emissions will change in the absence of, or expertise on MRV and may be unable to develop key with existing, measures in both national and local performance indicators (KPIs) that are aligned or can be contexts and the relevant assumptions that aggregated with higher-level indicators. Lack of capacity could underpin such projections (e.g., economic and also affect accuracy and completeness of data being reported. population growth rates). IPCC stipulates that data reported by parties should be Setting and allocating targets, including to local transparent, accurate, complete, consistent, and comparable. scales or different sectors, over the medium- Since city governments are important implementing entities for and long-term. national climate actions, their limited capacity to track progress through consistent baseline data and indicators can become a Developing future scenarios and pathways barrier to the effective integration of MRV systems and based on assumptions about global and local integration of urban climate action in national climate policy action and trends. processes. Tracking impact of climate action, by quantifying both the expected (ex-ante) GHG emissions reductions and wider benefits. Differing reporting processes at various government levels Informing climate planning documents and reports, including their framing, structure, and While national governments must report the progress on their presentation; their wider governance and NDC commitments under the Paris Agreement and the implementation; and monitoring, reviewing, Enhanced Transparency Framework set out by UNFCCC, there and tracking processes. is no requirement to include or report on actions being undertaken at the subnational level if these have not been Quantifying the impact of measures once included in the NDC. There are also currently no requirements implemented (ex-post) and overall progress for countries to report on progress made toward their LTS goals. in reducing emissions over time through GHG While some may do so voluntarily (e.g., using the progress inventories. reporting/M&E requirements developed by C40), cities are also largely not required to report on progress in implementing their Assessing the needs for climate finance and climate action plans, reinforcing the urgency of integrating urban tracking progress in mobilizing resources from climate action into NDCs and LTSs (Box 3.7). As a result, there different sources. could be misaligned tracking and reporting processes at various government levels because of different reporting timeframes, methodologies, tracking and recording approaches, and data (e.g., collected and reported in different formats, compiled using different methodologies, tracked through different indicator sets). This could lead to inconsistencies in target setting, 5.3.2 Key barriers to integrating MRV systems dissimilar KPIs at different government levels (e.g., KPIs of the climate action plans or related strategies), and difficulties in aggregating and updating the GHG emissions inventory at The key barriers to the integration of MRV systems in LICs and different levels, hindering MRV alignment and integration. LMICs are outlined below. In addition, barriers regarding integrated institutions, Data gaps and inconsistent tracking of climate actions particularly lack of clearly defined institutional structures, roles, and responsibilities on climate (discussed in section While cities are not bound by the same MRV requirements as 3.2.1.); limited funding for setting up and implementing MRV national governments, aligning city-level climate planning processes; and limited or lack of technical capacity can processes with such requirements is important for pursuing also hinder the effective integration of MRV and may integrated climate action. worsen other barriers. ³⁹ They are also recommended as part of the ‘city journey’ under GCoM and are a core part of the Climate Action Planning Framework promoted by C40. 60 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Aligning MRV approaches 5.3.3 Integrative solutions Depending on the country and city context, a more The solutions to overcome barriers to developing integrated or ‘aligned’ MRV approach can often be sufficient, and in better aligned MRV systems should tackle all the main elements some cases preferable, to enable integration of urban of MRV processes, including data, methods, and reporting, and climate action into NDCs and LTSs. An aligned approach the accompanying institutional and incentive structures to ensure allows for having independent MRV activities at different consistency and sustainability of MRV processes. A staged government levels⁴⁰ that are harmonized for reporting approach—ranging from enhanced communication to fully purposes. Ensuring consistent data fields and transparent integrated systems— that factors in the technical and financial assumptions as part of alignment efforts can allow for constraints faced by LICs and LMICs in developing integrated simpler consolidation of data and processes, without the MRV systems can help progressively enhance integration of MRV expense and complexity of a fully integrated tracking between cities and higher levels of government (Figure 5.5). system (e.g., an IT database/web-based tool). In addition, These efforts should be supported by integrative solutions related aligning MRV approaches should encompass coherent to the other two pillars of integration, particularly those on policy processes of data collection, validation, and verification frameworks, governance and institutional structures, mobilization supported by organizational structures with clearly of sufficient resources, and augmenting technical capacities. The defined roles and responsibilities. This also allows for most relevant solutions are (i) strengthening intergovernmental continually building technical capacity and resources at coordination, (ii) enhancing communication between national- and different levels and keeping ownership of data on GHG city-level on climate action, (iii) establishing requisite organizational emissions and mitigation activities at the local level. structures and functions, and (iv) promoting collaboration and sharing of knowledge, tools, resources. The main steps leading to aligned MRV may include the following efforts, primarily targeted at the highest-priority Enhanced communication GHG emissions sources or activities, considering available resources: Enhancing communication is an important first step toward Improving quality, completeness, and accuracy of data progressive MRV alignment and integration, especially in collection using templates that reflect KPIs aligned with contexts where cities and national governments face national KPIs to enhance comparability. significant barriers across MRV processes, as discussed above. Practical solutions may include promoting transparent Aligning methodologies across GHG inventories, using and proactive exchange of information on data collection consistent emissions factors and baseline setting processes; coordinating on data assumptions, calculations, approaches, sharing and aligning assumptions for and methodologies; and prioritizing simplified methodologies projections, using consistent calculation approaches for and completeness of data over granularity and accuracy. For mitigation impacts, and reporting mitigation actions. example, the reporting format, time periods, and key Other examples include establishing a coordinated cycle assumptions used for data for GHG inventories, mitigation for reporting inventories and ensuring better actions, projections, and pathways should be clearly communication on methodological improvements across communicated to ensure that reported data can be effectively government levels. used across government levels. Ensuring that the sectoral and spatial boundaries of mitigation actions and assumptions Developing common reporting processes and tools, included in any modelling of projections and pathways are including by coordinating on scope and timelines of clearly articulated is also important for promoting a shared reporting. This could include, for example, agreement understanding of the basis of calculations. Such efforts can between all levels of government on dates for help progressively resolve inconsistencies, provide clarity on publication, time periods covered, and frequency of the approaches used for estimating and reporting the data, reporting data and outputs, so that cycles of reporting and allow for necessary adjustments and subsequent (e.g., emissions, actions) can be aligned to make best alignment. Communication on MRV between government use of resources. It also is important to synchronize levels can be enhanced by appointing MRV focal points at planning and development of strategy documents to each level to systematically identify, gather, and share ensure that climate action and development plans at progress on data. This could facilitate timely data collection, each level feed into national reporting (e.g., data harmonization, and consistency and improve overall data collected at the city level that is relevant to NDC/LTS quality across all levels of reporting, such as GHG inventories, actions and progress tracking feed into the national city climate action plans, and NDCs/LTSs. climate MRV). Figure 5.5: Integrative solutions for MRV systems and processes BARRIERS INTEGRATIVE SOLUTIONS Enhance communication between national Data gaps and inconsistent and city levels on data requirements, tracking of climate actions methodologies and reporting needs MRV systems and processes Differing reporting processes Align MRV approaches across different levels at various government levels of government Limited capacities to comply Develop integrated MRV systems and processes with MRV requirements ⁴⁰ Independence can allow governments at different levels to respond to their specific policy and reporting needs. For example, national governments must report progress in specific formats established by UNFCCC, while cities might report using templates of relevant city networks. 61 Chapter 5: Urban diagnostics and integrated MRV systems to underpin integration Integrating MRV systems and processes Consistency of emissions factors can be ensured by establishing a dedicated database or communication process Developing effective integrated MRV systems relies on setting for sharing information. A centralized system of inventory up and maintaining several key elements: compilation can also ensure that methodological updates are automatically applied at all levels and timeseries. Complete, accurate, and consistent high-quality data. This can be achieved by creating database systems or fully integrated data collection, analysis, and reporting processes, Integrated reporting process based on similar reporting where the various levels of administration can check which formats, boundaries and timelines of reporting. A fully data they are expected to compile using common formats for coordinated reporting process would enable the avoidance data collection. For example, an online database could of double counting (Schneider at al. 2015) through the enable aggregation of data upwards (e.g., from municipalities centralized nature of calculation and reporting. For example, to regional and national level).⁴¹ An online database system mitigation actions can be tracked centrally using data can also help ensure that data is collected for all relevant reported by local governments to the national level. This can sectors and years (e.g., through automated checks) and that prevent inconsistencies in reporting timelines. However, each level of administration understands which dataset to integration of reporting timelines needs to be part of a wider use for tracking climate actions or emissions sources. In process of collaboration and engagement to ensure all levels addition, an online database can support data transparency of government are empowered to meet reporting deadlines. between the city and national level by ensuring that all data entries into the system have specified characteristics (e.g., Strengthening national MRV systems. National systems need years, units, scope, source). to be ready and/or able to support cities in aligning and integrating their MRV systems, which is an important pre- Similar methodologies, inventories, reporting tiers, and condition to integration. National governments therefore emissions factors. All levels of government would have the have a key role in achieving fully integrated systems, as same methodologies (e.g., 2006 IPCC Guidelines for national MRV focal points often have power and authority to National GHG inventories (IPCC 2006)⁴² and Greenhouse design and regulate MRV systems, allocate funding, and Gas Protocol’s “Policy and Action Standard for Estimating promote a multi-directional flow of knowledge, data, and the GHG effects of policies and actions“ (WRI 2014), which capacity sharing. As a result, despite the lack of requirements can later be harmonized and adjusted for internal or within NDC progress reporting to describe achievements at external reporting (e.g., GPC reporting for cities⁴³ (WRI/C40 subnational level or include subnational actions or emissions 2012)). Integration also ensures that all levels of government profiles within Biennial Update Reports⁴⁴ (BURs), national use the same models and assumptions/parameters for governments in rapidly urbanizing developing countries aspects such as projecting baselines and future pathways. should consider the benefits of integrated MRV approaches The database system can clearly define reporting tiers to as a key enabler of the overall process of integration of low- collect relevant data, which can be easily aggregated for carbon urbanization considerations into national climate emissions estimation at national level. planning processes. Nairobi, Kenya © mbrand85 / iStock ⁴¹ Where issues with data confidentiality exist, a database system could facilitate data sharing, in that only the levels of administration who need specific data will gain access to it. ⁴² Also see “2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories,” (IPCC 2019). ⁴³ GHG Protocol Standard for Cities formally known as Global Protocol for Community-Scale Greenhouse Gas Inventories developed by World Resources Institute (WRI), C40 Cities Climate Leadership Group, and ICLEI–Local Governments for Sustainability (ICLEI) (WRI/C40 2014). ⁴⁴ BURs are reports to be submitted by non-Annex I Parties to the UNFCCC (since 2014), containing updates of national Greenhouse Gas (GHG) inventories, including a national report and information on mitigation actions, needs, and support received. 62 Chapter 6. Readiness for urban climate action integration Across the globe, experience from cities and other subnational For instance, the lack of one or more characteristics (the governments on climate-informed policy development, action response to most of the questions is “No”) indicates barriers or planning, and implementation suggests that there is no ‘one gaps that governments should address to improve their size fits all’ approach to pursuing vertical and horizontal readiness. The presence of some readiness characteristics (the integration. As discussed in the preceding chapters, the response to several questions is “Yes” or “Partially”) points to prevalence, nature, and magnitude of the main barriers to an intermediary stage, or moderate level, of readiness, while integration—across all three pillars—depends on countries’ having affirmative responses to most questions demonstrates diverse policy and institutional environments and capacities. an advanced stage or high level of readiness. These barriers could be predominant either at national or city level or exist across all levels. In addition to applying the Diagnostic Framework to determine the level of readiness across the three pillars at national and Devising a feasible roadmap to pursue integration of urban city levels, policymakers and other users can identify a set of climate action into national climate change strategies such as recommendations at both levels for advancing to the next NDCs and LTSs calls for a more granular diagnostic approach stage of integration. Countries can thus gradually strengthen for assessing how the barriers to integration materialize in their enabling environment for integration. specific national and city circumstances. Such an approach can help governments and entities across different levels evaluate their readiness for integration and identify the main 6.2.1 Low readiness gaps and key areas that need to be strengthened by applying integrative solutions appropriate for their country, institutions, and governance context. This chapter proposes a The readiness for integration is ‘low’ when there are gaps in Readiness Diagnostic Framework to support these efforts. national policy frameworks and institutional structures across Subsequent sections outline the Framework and describe all three pillars that hinder integration, limited interaction how it can be used to assess ‘readiness for integration.’ The between national- and city-level entities on climate action, chapter also illustrates the application of the Framework in a and insufficient capacity by cities to undertake climate action. country context through a case study on Ghana. National and city governments show low readiness when they have very few readiness characteristics: 6.1 Readiness Diagnostic Framework At national level, requisite policy frameworks and institutional structures do not exist or are weak and not conducive to integration. This can mean lack of or limited The proposed ‘Readiness Diagnostic Framework’ (or Diagnostic climate change mainstreaming in national development Framework) helps identify the level of readiness of countries and planning; climate mitigation considerations in national cities to pursue the set of integrative solutions outlined in this urban development strategies; and recognition of climate report. This Diagnostic Framework can help policymakers identify mitigation potential of urban areas and city-level concrete shortcomings that may exist at various government mitigation efforts in NDCs, LTSs, or other national climate levels within each of the three pillars (or across all of them) and change strategies, which usually limit climate finance enable them to prioritize and implement the most appropriate mobilization for urban climate action. integrative solutions. At city level, the goals of national climate change strategies While each of the 9 integrative solutions covered in the are not cascading down, a strong mandate for climate Diagnostic Framework have specific characteristics under each action is lacking, and climate finance mobilized by the pillar, given the interlinkages among the pillars, some solutions national government is not accessible. Cities are not well- have characteristics that cut across all three pillars (e.g., equipped for mainstreaming and implementing climate establishing organizational structures and functions within each action because of (i) inadequate knowledge and awareness government level; promoting stakeholder engagement; of climate mitigation aspects, including national climate promoting collaboration and sharing of knowledge, tools, and targets; (ii) lack of or nascent city-level climate planning resources). Additionally, several standalone integrative solutions efforts; and (iii) insufficient technical and financial capacities. outlined in Chapters 3, 4, and 5 are presented in a consolidated manner in the Diagnostic Framework (e.g., enhancing There is a lack of coordination and limited communication communication between national and city level on climate action, between national- and city-level entities on climate enhancing technical and financial capacities). action, which also impedes data flows necessary for considering low-carbon urban development issues and For each integrative solution, the Diagnostic Framework offers priorities in various decision-making processes and MRV a set of questions (Table 6.1) to determine whether a specific systems across government levels. feature, or ‘characteristic,’ of this solution is part of existing policy frameworks and institutional structures (Pillar 1), finance mobilization approaches (Pillar 2), and policy processes and 6.2.2 Moderate readiness MRV systems (Pillar 3). In addition, it includes questions to determine the presence (or lack) of the key prerequisites for deploying the integrative solutions. The questions are tailored ‘Moderate readiness’ occurs when national policy frameworks to different government levels or cut across all levels, as and institutional structures are somewhat conducive to relevant. Together, the diagnostic outcomes provide a context- integration, national- and city-level entities undertake some specific indication of ‘readiness’ at national and city levels for coordination on climate action, and cities are partially pursuing vertical and horizontal integration of low-carbon equipped for planning and implementing climate action. urbanization considerations. National and city governments show moderate readiness when they have some of the readiness characteristics (although they may be unequally distributed across the three 6.2 Levels of readiness pillars) and need to strengthen others and/or complement them with other measures to pursue integrative solutions: This section discusses how users of the Readiness Diagnostic National governments are in the early stages of Framework can evaluate the overall ‘level of readiness.’ The recognizing the climate mitigation potential of urban readiness levels primarily correspond to one of three stages of areas, are making efforts to reflect such considerations the integration journey—early, intermediary, and advanced— in relevant national plans and strategies (including and are based on the presence of readiness characteristics NDCs, LTSs, and sectoral strategies), and are creating (and prerequisites) outlined in Table 6.1. legislative and regulatory frameworks on climate action. 64 Chapter 6. Readiness for urban climate action integration Cities are being increasingly empowered by, and receive Climate change is mainstreamed in national development support from, the national government to undertake planning and budgeting processes, the country’s national climate action by strengthening mandates and inclusion climate change strategies, including NDCs and LTSs, and in national climate policy processes. associated financing roadmaps reflect low-carbon urban development priorities, including the main drivers of the Cities are aware of national climate mitigation targets carbon footprint of urban areas and associated GHG and have a better understanding of specific challenges emissions reduction potential. Cities’ mandates for climate of urban mitigation action and/or are undertaking action are well-established and supported by clear policy measures to build the requisite knowledge base. They frameworks that cascade the national climate mitigation are developing climate action plans and establishing targets down to and across government levels. The national implementation mechanisms. Cities are also assessing government supports cities in accessing domestic and their financial and technical capacity gaps and working international sources of climate finance through dedicated to address them. programs and innovative financing mechanisms. There are efforts to improve coordination between Cities are experienced in developing and implementing national and subnational entities to facilitate information climate action plans that are aligned with national climate and knowledge sharing on aspects such as city-level change strategies and urban development priorities. They financing needs, data, and diagnostics, and MRV. have robust technical and financial capacities and a well- developed knowledge base on climate mitigation that is regularly updated and communicated to the national level 6.2.3 High readiness to support coordinated climate policy processes. Appropriate institutional structures exist to facilitate effective coordination between national- and city-level Countries demonstrate ‘high readiness’ when national policy entities on aspects such as climate planning and policy frameworks and institutions show high levels of integration of development, budgeting, implementation, and tracking of low-carbon urban development priorities across all three pillars urban climate action and its impacts (through aligned or and cities are well equipped and receive support to contribute integrated MRV systems). Such coordination is supported to national climate goals. National and city governments by evidence-based decision-making processes that allow demonstrate high readiness when they have most of the for periodic revisions of climate strategies and for scaling readiness characteristics: up the ambition of NDCs and LTSs over time. Dalhousi, India © f9sphotos / iStock 65 Chapter 6. Readiness for urban climate action integration Table 6.1: Readiness Diagnostic Framework Questions The key to answering the questions under each integrative solution: No indicates that the readiness characteristic/prerequisite is lacking. Partially indicates that some elements of the readiness characteristic/prerequisite are present. Yes indicates that the readiness characteristic/prerequisite is present. N/A indicates that the readiness characteristics/prerequisite is not applicable in that readiness level. Readiness 1 Mainstream climate change in national development planning and budgeting processes Low Moderate High Pillar 1 National level Do the country’s medium and long term (MT and LT) economy wide and sectoral No Partially Yes development plans reflect the goals of its NDC and / or LTS and their implementation plans? Do the country’s MT and LT economy-wide and sectoral development plans reflect low- No Partially Yes carbon urbanization considerations? City level Are subnational entities (including cities) consistently developing MT and LT No Partially Yes development plans? Are the climate-related goals and actions from national MT and LT economy-wide and sectoral development plans cascading down to these subnational development plans? No Partially Yes Pillar 2 Across all levels Are intergovernmental fiscal transfers regular and consistent? No Partially Yes Do the budgeting processes associated with national and subnational development plans explicitly consider the financing needs and main sources of financing for climate- No Partially Yes related actions? Does the country undertake climate tagging of budgetary spending (to facilitate No Yes Yes monitoring of climate finance flows)? Do fiscal transfers targeted at urban spending categories include criteria for undertaking climate action (e.g., conditional transfers to city level)? No Partially Yes Does the country’s budgeting process earmark funding flows for subnational-level climate action? No No Yes Pillar 3 Across all levels Are national development plans informed by development scenarios that reflect low- No Partially Yes carbon urbanization trends? Do the systems at national and subnational levels for tracking progress on development goals include climate-related performance indicators? No Partially Yes Does the climate MRV system ensure that reporting timelines for tracking climate actions No Yes Yes are consistent with budgeting processes and timelines? 66 Chapter 6. Readiness for urban climate action integration Readiness 2 Integrate low-carbon growth considerations in the national urban agenda (including through NUPs) Low Moderate High Pillar 1 National level Does the country have an overarching urban development strategy or plan (e.g., NUP)? No Yes Yes Does it include climate mitigation goals and measures (e.g., climate mitigation measures from the NDC and/or LTS targeted to urban areas, city-level climate No Partially Yes mitigation efforts)? City level Are the climate-related goals and actions from the urban development strategy or plan No Partially Yes (e.g., NUP) cascading down to the city level? Pillar 2 National level Does the urban development strategy or plan include a guiding framework for resource allocation to cities to undertake climate mitigation actions (e.g., performance-based No No Yes grants, dedicated climate program)? Pillar 3 National level Does the urban development strategy or plan reflect country-specific BAU and low- carbon urbanization scenarios (e.g., assessment of carbon footprint of urban areas, feasible No Partially Yes mitigation options)? Does the urban development strategy or plan contain monitorable climate mitigation No Partially Yes actions with performance indicators? 3 Explicitly consider urban climate action in national climate Readiness change strategies Low Moderate High Pillar 1 National level Do the NDC, LTS, or other national or sectoral climate change strategies include low- carbon urbanization considerations? Mitigation-related risks and GHG emissions reduction opportunities in urban areas are considered in NDC target-setting/priority actions or LTS development. No Partially Yes NDC/LTS priority actions targeting urban areas are translated into implementable city-level actions. City-level mitigation efforts and targets are recognized in NDC/LTS or other sectoral climate strategies. Does the country have a strong enabling environment for facilitating city-level mitigation action? No Partially Yes Climate change targets are legally binding and cascaded down to subnational level. Robust climate regulations exist with consistent enforcement (e.g., energy efficiency standards). Is the country on track to implement its climate change strategies? The objectives of NDC are being met (e.g., implementation plans being developed, actions being financed). Considerations relevant for urban areas are included in NDC implementation plans, and associated No Partially Yes targets are being met. The country has developed an LTS implementation plan or roadmap that includes specific actions for urban areas. 67 Chapter 6. Readiness for urban climate action integration City level Has the city developed an MT climate change action plan that includes mitigation aspects? No Yes Yes Climate change action plans assimilate NDC and/or LTS goals and implementation plans or are more ambitious. Has the city developed a long-term low-carbon urbanization vision (e.g., net-zero GHG No No Yes emissions targets and associated actions)? Pillar 2 National level Do the funding strategies for the NDC, LTS, or sectoral climate strategies identify specific financial needs associated with the climate mitigation measures to be implemented in No Partially Yes urban areas? Is the country successfully mobilizing finance to fund its national or sectoral climate No Partially Yes change measures? Are climate finance flows mobilized by the national government channelled to support No Partially Yes urban climate mitigation measures? Pillar 3 National level Do the NDC or other MT national or sectoral climate change strategies reflect low-carbon urbanization aspects (e.g., GHG emissions drivers in urban areas, risks of carbon lock-in, No Partially Yes impacts of city-level climate interventions)? Does the LTS incorporate country-specific low-carbon urbanization scenarios (e.g., urban- No Partially Yes centric technological, behavioral, land-use changes)? Do the NDC or other MT national or sectoral climate change strategies include reporting No Yes Yes requirements for cities? City level Is the city-level climate mitigation action plan underpinned by high-quality data and diagnostics (e.g., a GHG inventory, GHG emissions reduction scenarios, impacts of city- No Partially Yes level climate interventions)? Does the city-level climate mitigation action plan include monitorable actions (e.g., GHG No Partially Yes emissions reduction targets or mitigation actions with KPIs)? Is the progress on climate mitigation actions being reported to national climate No Partially Yes planning entities? Readiness 4 Empower city governments and strengthen intergovernmental coordination in policy areas with overlapping mandates Low Moderate High Pillar 1 Across all levels Do city governments have the regulatory authority to undertake climate action in No Partially Yes functions that are within their administrative mandates? For urban development functions overlapping or shared with other government levels, do city governments have clearly defined roles and responsibilities for climate action? Cities have clear roles and responsibilities for shared climate functions. No Partially Yes The country has mechanisms to seek inputs from city governments on climate-related actions within their jurisdictions (e.g., through coordinated planning and implementation, clear responsibilities for enforcing national policies). 68 Chapter 6. Readiness for urban climate action integration Pillar 2 National level Does the country facilitate cities’ access to domestic and international climate finance to support them in implementing climate functions and mandates (e.g., participation in international climate funds targeting urban climate action, collaboration with entities No Partially Yes responsible for participation in carbon markets)? City level Do city governments have the authority to generate OSR? No Yes Yes Do city governments have the mandate to mobilize financing from private sources (e.g., No Yes Yes capital markets, debt-based instruments, PPPs)? Pillar 3 Across all levels Are diagnostics efforts supporting climate policy processes (e.g., development of NDC, LTS, or other climate strategies) aligned across national and city levels? No Partially Yes Climate and development diagnostics reflect comparable economic trends and climate change impacts of urbanization at national and city levels. Are MRV approaches across different levels of government and reporting needs aligned? Entities engaged in climate-related progress reporting at different levels of government coordinate on scope and timelines of reporting. No Partially Yes City-level monitorable targets or indicators are aligned with national climate change strategies (to facilitate aggregation). Does the country have integrated MRV systems, including GHG emissions databases, similar methodologies and reporting processes? No Partially Yes Cities’ data collection and reporting processes, timelines, and methodologies are fully consistent with those at national level. Readiness 5 Enhance communication between national and city level on climate action Low Moderate High Pillar 1 Across all levels Is there a mechanism or framework for coordination between city, state, and national No Yes Yes governments on policy and planning processes related to climate? In the absence of a coordination framework, are climate-related efforts consistently communicated between different levels of government? City governments are aware of national climate commitments and their implication for their No Partially Yes jurisdictions. Urban climate mitigation efforts undertaken in cities are communicated to the national government. National and subnational entities are engaged in policy processes relevant to climate action in urban areas (e.g., co-creation of NDCs and LTSs). Pillar 2 Across all levels Are cities communicating about their financing needs for existing and planned climate actions to the national entities responsible for NDC implementation and resource No Partially Yes allocation processes? 69 Chapter 6. Readiness for urban climate action integration Pillar 3 National level Does the country have a mechanism or framework for national-level entities and city governments to communicate on GHG emissions data, diagnostics, and MRV, including No Partially Yes tracking of climate actions and finance flows? Readiness 6 Establish organizational structures and functions within each government level Low Moderate High Pillars 1, 2, & 3 Across all levels Are there organizational structures with formally defined roles and responsibilities at each No Partially Yes level of government to facilitate climate action planning, implementation, and tracking? City level Are city governments adequately staffed and resourced with personnel who have clear roles and responsibilities on climate change? No Partially Yes Cities have a dedicated climate change body. City governments modified existing roles and responsibilities to incorporate climate-related functions. Readiness 7 Promote stakeholder engagement Low Moderate High Pillars 1, 2, & 3 Across all levels Are there mechanisms that facilitate engagement of relevant stakeholders on climate action planning (e.g., across various government levels, private sector, academia, local communities)? No Partially Yes Multi-level stakeholder engagement is undertaken as part of NDC and LTS development and implementation processes. City representatives systematically participate in national climate planning processes, including M&E of outcomes. 8 Promote collaboration and sharing of knowledge, tools, Readiness and resources Low Moderate High Pillars 1, 2, & 3 Across all levels Are tools, resources, and technical capacities to support climate change policy processes shared across different levels of government and with other stakeholders (e.g., No Partially Yes through technical workshops, consultations processes, knowledge-sharing platforms)? Do national-level entities and city governments effectively collaborate on data, diagnostics, and reporting tools, including through sharing expertise on climate action No Partially Yes (e.g., through quality assurance and guidance, co-creation of low-carbon development pathways)? 70 Chapter 6. Readiness for urban climate action integration Readiness 9 Enhance technical and financial capacity Low Moderate High Pillar 1 Across all levels Do relevant entities have sufficient experience in climate action planning and No Partially Yes implementation? City level Do city governments have sufficient capacities to undertake urban planning and service provision, and do they assimilate climate-related functions into existing roles No Partially Yes and responsibilities? Pillar 2 Across all levels Do city governments have a strong track record of designing, managing, and implementing climate mitigation plans and investments? No Partially Yes Cities have experience in successful design and implementation of climate mitigation projects or low-carbon infrastructure investments. Are city governments funding a sizeable share of their priorities through OSR? No No Yes Are city governments successfully attracting capital and mobilizing financing from private No No Yes sources? Pillar 3 Across all levels Are there sufficient technical capacity and resources, including dedicated funding, to support climate-related diagnostics, tracking, and reporting? The country has a knowledge base that consolidates data on wide-ranging impacts of climate No Partially Yes action on urban development indicators and vice versa. National and city governments and/or other stakeholders have experience using national- and city-level diagnostic tools that are tailored for the country’s specific urbanization context. The country is exploring emerging technologies (e.g., remote sensing) to address data gaps. Are existing MRV systems ready to support alignment and/or integration of city-level inventories and reporting processes (including to ensure consistency of scope and No Partially Yes timelines with NDC/LTS policy processes)? City level Do city governments have technical capacity to use urban diagnostics tools to support climate policy processes in their jurisdictions and across various levels of government No Partially Yes (e.g., NDC and LTS development and implementation)? Do city governments have technical capacity to comply with MRV and climate action No Partially Yes tracking requirements (e.g., developing GHG inventories, setting up M&E systems). 71 Chapter 6. Readiness for urban climate action integration Case study: Ghana’s readiness for Urbanization and GHG emissions growth 6.3 urban climate action integration 6.3.1 trends in Ghana This section illustrates the application of the Readiness Ghana’s urban population has more than quadrupled since Diagnostic Framework to Ghana, a rapidly urbanizing LMIC in 1990, from under 4 million to 17.5 million in 2021 (57 percent of West Africa. Current urbanization trends in Ghana present the total population) and is expected to reach 37.5 million (73 significant potential for achieving the economic dividends of percent of the projected total population) by 2050 (World Bank, long-term low-carbon urban growth. Ghana first developed its forthcoming); UN DESA 2019). While urban growth has response to the challenges of climate change in 2012 through contributed to significant economic gains, it has been its National Climate Change Policy (NCCP), which had a strong characterized by unplanned and low-density urban expansion, emphasis on climate resilience, and ratified the Paris along with a proliferation of informal settlements (housing 40 Agreement in 2016. It submitted an update to its NDC in 2021 percent of the urban population) (World Bank, forthcoming). If (Government of Ghana 2021c) but currently doesn’t have an current sprawling expansion trends persist, Ghana could LTS. The Government of Ghana has been proactive in pursuing double its built-up area by 2050 (World Bank Group 2022b). climate change mainstreaming, and Accra, Ghana’s capital, Infrastructure development in most Ghanaian cities has not recently published its CAP (Accra metropolitan Assembly kept pace with urbanization, and climate hazards such as high 2020), demonstrating strong initiative on climate. The country temperatures, droughts, and floods are increasing the is currently updating its NUP. Ghana therefore offers an vulnerability of infrastructure assets. Urban areas, including interesting case study for demonstrating the application of the urban centers, suburban and peri-urban areas, and dense and Diagnostic Framework. semi-dense settlement clusters, generated 51 percent of Ghana’s CO₂ emissions in 2015, compared to 40 percent in The authors conducted the assessment primarily through a 1990 (Crippa et al. 2021). In addition, in 2015, urban areas desk review of relevant national- and city-level plans, policies, contributed 43 percent of the country’s CH₄ emissions, driven and documents, complemented by interviews with World Bank primarily by the waste sector. Under a BAU scenario, GHG staff supporting the institution’s engagement with Ghana on emissions from urban areas in Ghana are expected to almost climate change and urban development. City-level readiness quadruple by 2050 (World Bank Group 2022b). was assessed by focusing on a sample of three Ghanaian cities—Accra, Kumasi, and Tamale, each with distinct urban characteristics and status of urbanization (see Box 6.1). Accra Climate change mainstreaming in and Kumasi were selected as representative of urban centers 6.3.2 Ghana’s national development planning and budgeting (population density over 1,500 inhabitants per km²) and Tamale as representative of small urban areas (population density over 300 inhabitants per km²), based on urban The National Development Planning Commission (NDPC) leads settlement types defined by the United Nations Department of Ghana’s development planning, which is set out in Long-Term Economic and Social Affairs (UN DESA 2019). The assessment National Development Plans (NLTDP) and National Medium-Term offers preliminary observations about Ghana’s level of Development Policy Frameworks (MTDPF), with a 25- and four- readiness both at national and city levels for undertaking year time horizon, respectively. The NLTDP guides the vertically and horizontally integrated urban climate action. The preparation and implementation of MTDPFs, through which case study also provides a set of recommendations that could Ghana implements its urban development policy agenda. Once help the country address key gaps and barriers and advance an MTDPF is approved, all national entities such as government to the next stage of readiness. ministries, departments, and agencies and subnational entities such as metropolitan, municipal and district assemblies (MMDAs) are required to prepare their development plans in accordance with its provisions (World Bank Group 2022b). These plans form Box 6.1: Urbanization status and key the basis for resource allocations from the national budget to characteristics: Accra, Kumasi, and Tamale subnational governments. Since 2017, the national government has been pursuing climate Accra, located on the southern coast, is the change mainstreaming by reflecting national climate change country’s capital and largest city, with a total goals in its development plans. NDPC is responsible for population of approximately 2 million (4.9 ensuring that climate change issues are integrated into the million in the Greater Accra Region). With an national development planning process and for coordinating estimated annual population increase of 4 the preparation of sectoral and annual national progress percent, Accra is one of the fastest-growing reports, which cover climate change-related issues (Climate urban regions in West Africa. It is also Ghana’s Action Tracker 2021b). economic powerhouse, contributing roughly 25 percent of the country’s GDP. Currently, 58 The Ghana Long-term National Development Plan 2018-2057 percent of the city’s population lives in informal (Republic of Ghana 2017) discusses the country’s climate housing, however, electrification rates are change commitments and specifies climate-related strategic among the highest in Africa, with 96.5 percent interventions including deepening the mainstreaming of climate of people having access to electricity. change in development plans. It also prioritizes managing rapid urbanization under one of its five long-term goals (Goal 3) and Kumasi, located in southwestern Ghana, is identifies urban sprawl and resulting urban land expansion as a the second-largest city. The total population key issue, emphasizing the need for strengthened land-use of the metropolitan region is estimated at planning. However, this is not linked to its priorities on climate nearly 3.5 million, and the urban population mitigation. Ghana’s National MTDPF 2022-2025 (Government growth rate is similar to that of Accra. of Ghana 2021b) highlights addressing urbanization, urban infrastructure deficits, and climate change among the country’s Tamale, located in northern Ghana, is the medium-term priorities. It sets out medium-term objectives⁴⁵ third-largest city and an emerging investment through a dedicated focus area on climate variability and hub in West Africa. The urban population is change and includes strategic interventions such as estimated at around 700,000, with an annual accelerating the implementation of Ghana’s national climate growth rate of 4.4 percent, making Tamale commitments through its NDC and mainstreaming climate the fastest-growing city in Ghana. change in national development planning and budgeting processes to meet these objectives. This focus area also includes performance indicators on climate change. ⁴⁵ These include enhancing institutional capacity and coordination for effective climate action, enhancing climate change resilience, and reducing greenhouse gases. 72 Chapter 6. Readiness for urban climate action integration In addition, MTDPF identifies climate mitigation-related actions The budget guidelines require public institutions at national as part of strategic interventions in sectors such as energy and and subnational levels to identify climate-relevant spending. natural resources, but these are not linked to national climate Ghana’s Ministry of Finance (MoF) has developed Standard goals. While subnational entities such as MMDAs are required Operating Procedures for tracking climate change to mainstream climate change in MTDPFs for their jurisdictions, expenditures, and a climate tracking dashboard is expected only about half currently have climate change-related plans. It is to disaggregate this information at subnational and sector important to note that most of the actions in these plans focus levels. In addition, Ghana’s new Public Financial on reducing vulnerability to climate hazards (Climate Action Management Strategy (2022-2026) (Government of Ghana Tracker 2021b) and don’t directly reflect climate-related 2021d) identifies measures to support both adaptation and priorities of the national MTDPF. Further, subnational entities mitigation, such as the disclosure of information on climate- face numerous challenges in implementing their medium-term smart investments by the public sector and the introduction plans and are particularly constrained in carrying out climate- of climate change into performance scorecards of MMDAs’ related interventions because of technical capacity constraints budget committees. To channel financing for climate action (discussed in subsequent sections). to subnational levels, the NDPC has supported incorporation of NDC goals in many national and subnational plans (World Climate-informed resource allocations to city governments Bank Group 2022b). While resources allocated at subnational level are not earmarked for climate action, Fiscal transfers from the national government to subnational MMDAs are required to incorporate climate-related actions entities are anchored in the national development planning in their MTDPs to acquire funding. For example, actions process. While intergovernmental fiscal transfers are regular, identified in Accra’s CAP will be implemented by being their volume can depend on changing political priorities embedded in the AMA’s MTDP, and budgetary allocations (Fumey and Egwaikhide 2018). for climate activities will be made through the AMA’s budget process (Accra Metropolitan Assembly 2020). The annual Ghana instituted a CBT system in 2016 to track all on-budget performance assessment of MMDAs includes a climate climate-related expenditures from key line ministries and change category. However, none of the indicators are generate data to compare projected and actual spending. minimum conditions for receiving transfers. Table 6.2: Climate change mainstreaming in Ghana’s national development planning and budgeting processes Pillar 1 National level L/M/H Do the country’s medium- and long-term (MT and LT) economy-wide and sectoral development plans reflect the Partially goals of its NDC and/or LTS and their implementation plans? Do the country’s MT and LT economy-wide and sectoral development plans reflect low-carbon urbanization considerations? No City level Are subnational entities (including cities) consistently developing MT and LT development plans? Yes Are the climate-related goals and actions from national MT and LT economy-wide and sectoral development plans cascading down to subnational development plans? Partially Pillar 2 Across all levels Are intergovernmental fiscal transfers regular and consistent? Partially Do the budgeting processes associated with national and subnational development plans explicitly consider Partially the financing needs and main sources of financing for climate-related actions? Does the country undertake climate tagging of budgetary spendings (to facilitate monitoring of climate finance flows)? Yes Do fiscal transfers targeted at urban spending categories include criteria for undertaking climate action (e.g., conditional transfers to city level)? No Does the country’s budgeting process earmark funding flows for subnational-level climate action? No 73 Chapter 6. Readiness for urban climate action integration Pillar 3 Across all levels Are national development plans informed by development scenarios that reflect low-carbon urbanization No trends? Do the systems at national and subnational levels for tracking progress on development goals include climate- Yes related performance indicators? Does the climate MRV system ensure that reporting timelines for tracking climate actions are consistent with No budgeting processes and timelines? Low-carbon growth considerations The draft NUP also specifies the relevant government entities 6.3.3 in Ghana’s national urban agenda that are expected to collaborate in implementing these activities. The M&E framework for the draft NUP is yet to be developed, so it is unclear if and how the performance indicators for the The Government of Ghana recognizes the role of activities being implemented under these strategies are linked urbanization in driving economic growth. The National Urban to relevant actions in Ghana’s NDC. Lastly, the draft NUP Policy Framework adopted in 2012 (Government of Ghana mentions that financing policy implementation will be the 2012) and the National Spatial Development Framework responsibility of the national government through national (NSDF) 2015-2035 (Government of Ghana 2015) (see Box budgetary and other appropriate support. 6.2) are the two key policy frameworks guiding urban development planning at national level. Ghana is in the process of adopting an updated NUP, Box 6.2: The National Spatial Development ‘National Urban Policy and Strategies 2023-2032 Framework (Government of Ghana, forthcoming).⁴⁶ This draft NUP has an overarching vision of prioritizing inclusive, safe, resilient, and sustainable urban settlements. It commits to aligning The NSDF 2015-2035 was developed by the Land and localizing Ghana’s commitments under the Paris Use and Spatial Planning (LUSP) Authority under Agreement (e.g., NDC commitments). While it doesn’t outline the provisions of the LUSP Act in collaboration with specific low-carbon urbanization scenarios, one of the 10 NDPC. The NSDF is informed by Ghana’s 2010- proposed policy objectives is dedicated to climate change 2013 MTDPF, which emphasized the need to and aims to promote climate resilience and environmental achieve well-planned and spatially integrated cities quality of urban life. Climate change aspects are also and highlighted the importance of linking reflected in several other policy objectives and considered in spatial/land-use planning and socio-economic a comprehensive manner in those focused on improving development objectives at all levels of government. urban land-use planning and management and promoting NSDF, which is centered on the Accra and Kumasi access to urban infrastructure and services. It is unclear if regions as key growth points, recognizes that rapid climate-related considerations, particularly those concerning urban growth in these city regions is leading to mitigation, are underpinned by dedicated urban diagnostics. sprawl and recommends the adoption of spatial Nevertheless, the draft NUP has identified 42 strategies to development frameworks. TOD is noted as an achieve these policy objectives, including several specific approach that should be adopted to promote measures that will contribute to actions identified in Ghana’s compact, mixed-use development and to reduce NDC relevant for urban areas such as: (i) improve energy private vehicle use and transportation congestion. efficiency in construction, operations, and maintenance of This approach is primarily driven by priorities such public and private facilities in urban communities and (ii) as promoting economic development, improving strengthen capacities at all levels to promote enforcement of connectivity, and protecting ecological regulations and private sector participation along the waste assets.NSDF does not address its contribution to management chain. The activities identified to facilitate the low-carbon urban development. implementation of these strategies comprise wide-ranging and specific actions that can contribute to climate mitigation Source: Government of Ghana 2015. in key urban sectors including public transportation, buildings, waste, and land use. Table 6.3: Recognition of low-carbon growth priorities in Ghana’s national urban agenda Pillar 1 National level L/M/H Does the country have an overarching urban development strategy or plan (e.g., NUP)? Yes Does it include climate mitigation goals and measures (e.g., climate mitigation measures from the NDC Partially and/or LTS targeted to urban areas, city-level climate mitigation efforts)? City level Are the climate-related goals and actions from the urban development strategy or plan (e.g., NUP) cascading Partially down to the city level? ⁴⁶ The draft National Urban Policy and Strategies 2023-2032 (2023 NUP) was reviewed for this report. 74 Chapter 6. Readiness for urban climate action integration Pillar 2 National level Does the urban development strategy or plan include a guiding framework for resource allocation to cities to No undertake climate mitigation actions (e.g., performance-based grants, dedicated climate program)? Pillar 3 Across all levels Does the urban development strategy or plan reflect country-specific BAU and low-carbon urbanization No⁴⁷ scenarios (e.g., assessment of carbon footprint of urban areas, feasible mitigation options)? Does the urban development strategy or plan contain monitorable climate mitigation actions with No⁴⁸ performance indicators? Mitigation priorities and targets for Ghana’s updated NDC recognizes the key role that cities/local 6.3.4 urban areas in Ghana’s national climate governments must play in delivering NDC targets and includes change strategies mitigation measures related to expanding sustainable inter- and intra-city transportation modes; promoting energy efficiency in National climate change strategies homes, industry, and commerce; and improving solid waste management. It also indicates a top-down approach to NDC Adopted in 2012, Ghana’s NCCP was designed within the implementation, in which NDPC is mainstreaming NDC targets framework of national sustainable development priorities and into sectoral and district plans and their annual progress reports. aimed to mainstream climate change into policies and sectoral activities to achieve sustained growth (Cobbinah et al. 2019). Ghana has developed an NDC financing strategy, which includes NCCP has a strong emphasis on climate resilience.The role of budget estimates for most actions that need to be implemented local governments in its implementation has been minimal, with in urban areas but doesn’t specify their funding sources key responsibilities being limited to disaster risk management (Government of Ghana 2021a). While Ghana has the institutional and energy conservation in buildings (Tait and Euston-Brown structures to mobilize and manage climate finance, to date, the 2017). As mentioned above, Ghana ratified the Paris government has had difficulty raising sufficient funds for climate Agreement in 2016 and submitted an update to its NDC in 2021 action (Climate Action Tracker 2021b). but hasn’t yet developed an LTS. The country doesn’t have a comprehensive legislative framework on climate change but As such, through its efforts to mainstream national climate has produced a series of plans grounded in NCCP and change goals in development planning, Ghana’s national numerous separate regulations and policies across several government has created the enabling environment for city- sectors. Ghana’s NDC targets are not currently anchored in the level climate action. However, there are gaps in its effective law (Climate Action Tracker 2021b; World Bank 2022). implementation, as discussed in the previous section. Table 6.4: Urban climate action in Ghana’s national climate change strategies Pillar 1 National level L/M/H Do the NDC, LTS, or other national or sectoral climate change strategies include low-carbon urbanization Partially considerations? Does the country have a strong enabling environment for facilitating city-level mitigation action? Partially Is the country on track to implement its climate change strategies? Partially Pillar 2 National level Do the funding strategies for the NDC, LTS, or sectoral climate strategies identify specific financial needs Yes associated with the climate mitigation measures to be implemented in urban areas? Is the country successfully mobilizing finance to fund its national or sectoral climate change measures? No Are climate finance flows mobilized by the national government channelled to support urban climate No mitigation measures? ⁴⁷ This information could not be verified. ⁴⁸ The M&E framework for the updated draft 2023 NUP is expected to be developed. 75 Chapter 6. Readiness for urban climate action integration Pillar 3 National level Do the NDC or other MT national or sectoral climate change strategies reflect low-carbon urbanization aspects (e.g., GHG emissions drivers in urban areas, risks of carbon lock-in, impacts of city-level climate No interventions)? Does LTS incorporate country-specific low-carbon urbanization scenarios (e.g., urban-centric technological, N/A behavioral, land-use changes)? Do the NDC or other MT national or sectoral climate change strategies include reporting requirements No for cities? City-level climate action planning: Accra waste management, energy efficiency in buildings, transportation AMA is the only subnational entity in Ghana to have systems, and land-use and physical planning. This is largely in prepared a city-level GHG emissions inventory and climate line with city-specific mitigation actions in Ghana’s NDC. action plan.⁴⁹ Accra’s Climate Action Plan (CAP) 2020 - 2025 (Accra Metropolitan Assembly (2020) sets a GHG While Accra’s CAP doesn’t include quantitative performance emissions reduction target of 73 percent below BAU by indicators, AMA will monitor and report on progress achieved 2050 (30 percent by 2030). Accra’s GHG emissions on climate actions identified in CAP to the national reduction target for 2030 aligns with the level of ambition government and report GHG emissions on an annual basis to set out in Ghana’s NDC and goes further by establishing a CDP. Progress reported to the national government is mid-century target. To achieve these targets, Accra has expected to feed into the national MRV of climate actions. identified concrete actions to reduce GHG emissions in key Kumasi and Tamale have not yet published their own climate sectors where it has a mandate to operate, comprising solid action plans or strategies. Table 6.5: Climate action planning in Accra Pillar 1 City level L/M/H Has the city developed an MT climate change action plan that includes mitigation aspects? Yes Has the city developed a long-term low-carbon urbanization vision? Yes Pillar 3 City level Is the city-level climate mitigation action plan underpinned by high-quality data and diagnostics (e.g., a GHG Yes inventory, GHG emissions reduction scenarios, impacts of city-level climate interventions)? Does the city-level climate mitigation action plan include monitorable actions (e.g., GHG emissions reduction Partially targets or mitigation actions with KPIs)? Is the progress on climate mitigation actions being reported to national climate planning entities? Yes Decentralization, intergovernmental implementing climate action are often insufficient, resulting in 6.3.5 coordination, and communication on a sizeable gap between MMDAs’ plans and actual funds climate action⁵⁰ received and used (World Bank 2022). Long-standing decentralization reforms in Ghana have given In recent years, the government has promoted PPPs to MMDAs a wide range of functions and responsibilities, bridge the financing gap for urban infrastructure and basic including generating OSR. However, in practice, national services. In 2011, the country adopted its first national PPP departments retain supervisory powers over several policy. A screening system established for PPP preparation development planning and budgeting processes. Most city includes considerations for climate change and emphasizes governments in Ghana have limited fiscal autonomy. About that PPPs should consider low-carbon and climate-resilient 80 percent of MMDAs’ budgets are financed by transfers infrastructure, utilizing climate data analytics (World Bank, from the national government and donors through the forthcoming). The participation of cities in PPPs has been budgetary and resource allocation processes set up for limited. A PPP law adopted in 2020 made provisions for MTDPFs, and the remaining 20 percent is financed through MMDAs to make PPP arrangements, yet no city has used OSR (Otoo and Danquah 2021). In this context, the funds for PPPs for financing investment projects. ⁴⁹ C40 supported the development of Accra CAP 2020-2025. ⁵⁰ This section discusses readiness characteristics across the integrative solutions “Empowering city governments and strengthening intergovernmental coordination in policy areas with overlapping mandates” and “Enhancing communication between national- and city-level on climate action.” 76 Chapter 6. Readiness for urban climate action integration Since 1990, only 30 PPP projects have been financed, for a total At the same time, CAP outlines the need for financial support to investment of almost US$ 10 billion, with all PPP transactions enable AMA to develop the second five-year CAP in 2024. managed by a PPP Advisory Unit within the Public Investment and Assets Division of the MoF (MOFEP of Ghana 2020). The extent to which Accra’s MRV and tracking processes for climate action are currently aligned with corresponding When MMDAs have functions that overlap with other levels of processes at national level is unclear. A recent analysis of government, they have the primary mandate to undertake climate change laws in Ghana (World Bank 2022) highlights that those functions if they fall within their jurisdiction. Roles and the institutional arrangements for coordinating climate action responsibilities for climate change planning and implementation monitoring and reporting activities are not embedded in the are shared across various government levels, including country’s legal and regulatory frameworks. This can make it MMDAs, and the country has clear institutional structures to challenging for entities to coordinate on planning and facilitate vertical and horizontal coordination between entities. implementing climate commitments, especially with changing However, these climate governance structures are not fully political leadership and priorities. While Ghana seeks to operational because of weak coordination between entities implement its NDC goals at the subnational level through (Climate Action Tracker 2021b). For example, legal and policy MTDPFs, the current indicators for tracking performance and frameworks such as the LUSP Act include provisions for inter- impacts of climate-related actions in these plans need jurisdictional coordination or collaboration, yet these are not improvement and don't cascade down. The national climate functioning in practice, affecting implementation of functions action monitoring and reporting function in Ghana is assigned to with shared mandates such as urban transportation (World the Environmental Protection Agency (EPA), which mainly Bank, forthcoming). Nevertheless, Accra’s CAP seeks to focuses on ensuring the country's compliance with UNFCCC's overcome these gaps by including considerations for alignment MRV requirements. In the absence of applicable climate-related with national climate planning processes. Specifically, AMA performance indicators in MTDPFs, the Accra CAP includes its aims to link its CAP revisions and updates with the five-year own requirements for tracking climate action and mobilizing cycle of Ghana’s NDC updates. external climate finance for its implementation. Table 6.6: Decentralization and intergovernmental coordination and communication on climate action in Ghana Pillar 1 Across all levels L/M/H Do city governments have the regulatory authority to undertake climate action in functions that are within their Yes administrative mandates? For urban development functions overlapping or shared with other government levels, do city governments Partially have clearly defined roles and responsibilities for climate action? Is there a mechanism or framework for coordination between city, state, and national governments on Yes policy and planning processes related to climate change? In the absence of a coordination framework, are climate-related efforts consistently communicated between No different levels of government? Pillar 2 National level Does the country facilitate cities’ access to domestic and international climate finance to support them in Partially implementing climate functions and mandates? Are cities communicating about their financing needs for existing and planned climate actions to the national N/A entities responsible for NDC implementation and resource allocation process? City level Do city governments have the authority to generate OSR? Yes Do city governments have the mandate to mobilize financing from private sources (e.g., capital markets, debt- Yes based instruments, PPPs)? Pillar 3 Across all levels Are diagnostics efforts supporting climate policy processes (e.g., development of NDC, LTS, or other No climate strategies) aligned across national and city levels? Are MRV approaches across different levels of government and reporting needs aligned? No 77 Chapter 6. Readiness for urban climate action integration Does the country have integrated MRV systems, including GHG emissions databases, similar No methodologies, and reporting processes? Does the country have a mechanism or framework for national-level entities and city governments to communicate Partially on GHG emissions data, diagnostics and MRV, including tracking climate actions and finance flows? Organizational structures and functions development partners, the private sector, civil society 6.3.6 organizations, and other stakeholders. As discussed above, dedicated to climate change NDPC is responsible for incorporating NDC targets into sectoral and MMDA plans, and EPA is responsible for Ghana has clear organizational structures and well-defined monitoring and reporting on NDC implementation (World roles and responsibilities on climate change at national level. Bank 2022). Several MMDAs have also established climate The Ministry of Environment Science, Technology, and change units. For instance, AMA’s Resilience and Innovation (MESTI) is responsible for climate change issues and Sustainability Unit leads on the climate action agenda and is coordinates the NDC preparation process. MESTI houses the responsible for supporting various local departments in National Climate Change Committee, which consists of MMDAs, achieving climate goals. Table 6.7: Organizational structures and functions on climate change in Ghana Pillars 1, 2, & 3 Across all levels L/M/H Are there organizational structures with formally defined roles and responsibilities at each level of government to facilitate climate action planning, implementation, and tracking? Partially City level Are city governments adequately staffed and resourced with personnel who have clear roles and Partially responsibilities on climate change? Stakeholder engagement, collaboration, inputs are reflected in policy is not indicated in relevant 6.3.7 documents. The government also has numerous initiatives on and knowledge sharing⁵¹ disseminating knowledge about climate change, largely targeted to the public to enhance awareness. Lastly, the Ghana’s national government recognizes the importance of government is taking steps toward developing knowledge engaging stakeholders in national climate policy planning and infrastructure to support climate policy planning through its regularly conducts stakeholder consultations when developing Council for Scientific and Industrial Research. However, the reports and planning documents. More broadly, NDPC seeks work undertaken by this agency is currently limited (Climate inputs from various actors on MTDPFs but the extent to which such Action Tracker 2021b). Table 6.8: Stakeholder engagement and collaboration in Ghana’s climate planning Pillars 1, 2, & 3 Across all levels Stakeholder engagement Are there mechanisms that facilitate engagement of relevant stakeholders on climate action planning (e.g., across various government level, private sector, academia, local communities)? Partially Collaboration and sharing knowledge, tools, and resources: Are tools, resources, and technical capacities to support climate change policy processes shared across different levels of government and with other stakeholders (e.g., through technical workshops, Partially consultations processes, knowledge-sharing platforms)? Do national-level entities and city governments effectively collaborate on data, diagnostics, and reporting tools, including through sharing expertise on climate action (e.g., through quality assurance No and guidance, co-creation of low-carbon development pathways)? ⁵¹ This section discusses readiness characteristics across the integrative solutions “Promoting stakeholder engagement” and “Promoting collaboration and sharing knowledge, tools, and resources.” 78 Chapter 6. Readiness for urban climate action integration As discussed in section 6.3.5, the capacity of Ghana’s local Technical and financial capacity for governments to raise OSR from taxes, levies, and other 6.3.8 climate action in Ghana charges is quite limited, with all three cities highly dependent on the national government for financing climate action implementation. Accra’s CAP indicates that its implementation Ghana’s national institutions responsible for coordinating will be financed through a combination of OSR, transfers from climate action seem to have sufficient capacity, staffing, the national government, PPPs, and donors (e.g., international and budget to perform their statutory tasks. For instance, climate finance). However, even if Accra demonstrates Ghana is one of the few developing countries that has stronger technical capacity compared to Kumasi and Tamale, regularly submitted National Inventory Reports to UNFCCC, it still relies on the national government to unlock finance, which demonstrates adequate capacity for regular GHG including from development partners. inventory reporting (Climate Action Tracker 2021b). However, most city governments face institutional and While Ghana has the basic structure for MRV, the 2019 NDC financial constraints in undertaking core urban implementation plan identified the need to upgrade the existing development functions such as physical planning and domestic MRV system to include the national GHG inventory, service provision and have limited capacities to undertake climate action accounting, progress on achieving NDC targets, climate-related functions (World Bank, forthcoming). For and tracking of financial and technical support received (Republic instance, local governments struggle to mainstream of Ghana, MESTI 2019a). MESTI had also identified several climate-related actions into their plans because of limited barriers to the implementation of Ghana’s Climate Ambitious resources and lack of technical expertise on climate Reporting Program, which aims to support the MRV system, change (Climate Action Tracker 2021b). While AMA has including limited funds, low visibility of MRV results for policy- mobilized resources to develop basic structures and related decision making, and a lack of access to good-quality establish dedicated capacity to plan and implement climate data (Republic of Ghana, MESTI 2019b). Overcoming these action, Kumasi and Tamale rely primarily on the national barriers at the level of the national MRV and tracking system and government to identify climate action priorities and further strengthening cities’ diagnostic, monitoring, and reporting implement climate change actions and have achieved capacities are important prerequisites for aligning MRV systems substantially less progress in integrating climate change at different levels to support integration of low-carbon into city functions, policies, and investments. urbanization considerations into national climate policies. Table 6.9: Technical and financial capacity to support urban climate action in Ghana Pillar 1 Across all levels L/M/H Do relevant entities have sufficient experience in climate action planning and implementation? Partially City level Do city governments have sufficient capacities to undertake urban planning and service provision, and do they No assimilate climate-related functions into existing roles and responsibilities? Pillar 2 City level Do city governments have a strong track record of designing, managing, and implementing climate mitigation No plans and investments? Are city governments funding a sizeable share of their priorities through OSR? No Are city governments successfully attracting capital and mobilizing financing from private sources? No Pillar 3 Across all levels Are there sufficient technical capacity and resources, including dedicated funding, to support climate- No related diagnostics, tracking, and reporting? Are existing MRV systems ready to support alignment and/or integration of city-level inventories and No reporting processes (including to ensure consistency of scope and timelines with NDC/LTS policy processes)? City level Do city governments have technical capacity to use urban diagnostics tools to support climate policy processes in their jurisdictions and across various levels of government (e.g., including NDC and LTS No development and implementation)? Do city governments have technical capacity to comply with MRV and climate action tracking requirements No (e.g., developing GHG inventories, setting up M&E systems). 79 Chapter 6. Readiness for urban climate action integration Ghana should strive to incorporate low-carbon urbanization Assessment outcome: Ghana’s readiness considerations underpinned by dedicated urban diagnostics in 6.3.9 its efforts to develop an LTS. This would further elevate the role for urban climate action integration of rapidly growing urban areas in achieving the country’s long- term vision for decarbonized development. It can also provide This section summarizes the preliminary outcomes of the an enhanced understanding of the specific contributions of assessment undertaken for this report on Ghana’s current level urban mitigation actions to national climate goals and the of readiness to develop and implement urban climate action support required to facilitate their implementation. that is integrated in its national climate change strategies. At city level, these outcomes are based on the assessment of Based on the assessment of three representative cities, Ghana three cities that are representative for the purposes of this demonstrates ‘low’ readiness for climate action at the city diagnostic. It also provides a set of recommendations that level, with Accra being an outlier. Lack of climate-related could help the country address key gaps and barriers and technical expertise and resource limitations at local level move to higher stages of readiness. hinders city governments’ ability to undertake climate mitigation planning. In this context, cities may also struggle At national level, Ghana demonstrates ‘moderate’ readiness. with integrating local data on GHG emissions and priority The country has made significant efforts to lay the groundwork climate actions into national climate policy processes and the for mainstreaming its national climate goals and targets into its MRV system. Despite Accra’s greater implementation national and subnational development plans and sectoral readiness, there is a need for the national government to policies and continues to deepen mainstreaming. Ghana’s augment the city’s efforts to access finance and build capacity updated draft NUP reflects its climate goals, and the updated to deliver climate-related projects and programs. For smaller NDC explicitly considers the role of urban areas in meeting its cities with more acute capacity gaps, a starting point could be targets and includes priority measures that cities should to follow Accra’s example and develop their own climate implement. Enacting the country’s climate targets and creating action plans that are aligned with national climate change institutional structures through dedicated climate change laws is targets and policy objectives and include robust climate action an important long-term priority (World Bank 2022). This can help tracking systems. Further, given their low levels of fiscal improve coherence between the climate policy agenda and autonomy, Ghanaian cities need to work collaboratively with sectoral policy agendas and support effective functioning of the the national government to identify financing priorities for MRV system (including gathering relevant data for climate climate action and mobilize climate finance from domestic and reporting), which will strengthen the implementation of NDC, international sources. To further empower local governments particularly at subnational level. The M&E framework that will be to implement their climate-related functions, the national developed to track the implementation of the draft NUP government should strive to mobilize technical and financial provides an opportunity for harmonizing the indicators for support, including by strengthening collaboration and sharing tracking the NUP’s climate mitigation actions with those tracking of climate-related knowledge and technical resources across the relevant actions in Ghana’s NDC, thereby enabling the government levels and between cities. It is also important to country’s urban areas to systematically demonstrate their improve local government representation in sectoral planning contribution to national climate goals. Ghana has established and implementation strategies and strengthen existing comprehensive structures to facilitate horizontal and vertical engagement systems to facilitate coordination between intergovernmental coordination on climate. 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