The State of Cities Climate Finance

The 2021 State of Cities Climate Finance report provides a comprehensive estimate of global urban climate finance, identifying a significant gap between current annual investments of USD 384 billion and estimated needs of USD 4.5 to 5.4 trillion. It analyzes the enabling conditions required to mobilize finance and offers recommendations for city, national, and international officials to accelerate low-carbon, climate-resilient urban development.

• Annual urban climate finance flows averaged USD 384 billion in 2017/2018, which is significantly lower than the estimated annual needs of USD 4.5 to 5.4 trillion.
• Urban climate finance is heavily concentrated in OECD countries and China, with severely insufficient investment in developing regions; South Asia and Sub-Saharan Africa averaged annual investments of only USD 4 billion and USD 3 billion, respectively.
• Mitigation activities dominate urban climate finance, averaging USD 375 billion in 2017/2018, while adaptation and resilience measures averaged only USD 7 billion, representing 9% of tracked project-level data.
• Low-carbon transport and the buildings sector are the primary drivers of urban mitigation finance, accounting for 53% (USD 202 billion) and 44% (USD 167 billion) of total urban climate finance, respectively.
• Private finance, largely driven by domestic actors and household expenditures for electric vehicles and residential energy efficiency, averaged USD 136 billion (35% of total), while public sector investment averaged USD 84 billion (22%).
• The COVID-19 pandemic has strained city finances, causing a loss of local revenue and creating a risk that recovery efforts in rapidly urbanizing cities in Africa and South Asia may lock in high-emission and high-vulnerability pathways.
• City governments can mobilize climate finance by acting as providers (through green procurement, service provision, and fundraising) and as stewards (through standards, regulations, and systems-level planning).

APA

Climate Policy Initiative (2021). The State of Cities Climate Finance. https://www.climatepolicyinitiative.org/publication/the-state-of-cities-climate-finance/

Chicago

Climate Policy Initiative. The State of Cities Climate Finance. 2021. https://www.climatepolicyinitiative.org/publication/the-state-of-cities-climate-finance/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The State of Cities Climate Finance |date=30 June 2021 |url=https://www.climatepolicyinitiative.org/publication/the-state-of-cities-climate-finance/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021state, author = {{Climate Policy Initiative}}, title = {{The State of Cities Climate Finance}}, institution = {Climate Policy Initiative}, year = {2021}, month = jun, url = {https://www.climatepolicyinitiative.org/publication/the-state-of-cities-climate-finance/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }