The State of Cities Climate Finance

This executive summary of the 2021 State of Cities Climate Finance report, produced by the Cities Climate Finance Leadership Alliance with World Bank contributions, analyzes global urban climate investment flows and the enabling conditions required to close the investment gap. It establishes a framework for tracking urban climate finance and provides recommendations for city, national, and international officials to mobilize the trillions of dollars needed for low-carbon, climate-resilient urban development.

• Annual urban climate finance flows averaged an estimated 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 China and OECD countries, leaving developing regions with critically low investment levels; for example, Sub-Saharan Africa and South Asia received annual averages of only USD 3 billion and USD 4 billion, respectively.
• Investment is heavily skewed toward mitigation over adaptation, with urban adaptation and resilience measures averaging USD 7 billion annually, representing only 9% of tracked project-level data.
• Private finance, particularly household spending on electric vehicles and residential energy efficiency, accounted for 35% of total urban climate finance (averaging USD 136 billion annually), while public sector investment accounted for 22% (averaging USD 84 billion).
• The International Finance Corporation identifies a USD 29.4 trillion climate investment opportunity by 2030 in emerging market cities across six sectors: renewable energy, electric vehicles, public transport, green buildings, waste, and climate-smart water.
• Mobilizing urban climate finance depends on three enabling elements: country-specific (national governance and fiscal systems), city-specific (municipal capacity and remit), and climate-specific (alignment with appropriate financing instruments).
• The COVID-19 pandemic has strained city finances by reducing local revenue and increasing social protection spending, creating a risk that rapidly urbanizing cities in Africa and South Asia may lock in high-emission and high-vulnerability development pathways.

APA

Climate Policy Initiative (2021). The State of Cities Climate Finance. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/06/2021-State-of-Cities-Finance-Executive-Summary.pdf

Chicago

Climate Policy Initiative. The State of Cities Climate Finance. 2021. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/06/2021-State-of-Cities-Finance-Executive-Summary.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The State of Cities Climate Finance |date=June 2021 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2021/06/2021-State-of-Cities-Finance-Executive-Summary.pdf |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/wp-content/uploads/2021/06/2021-State-of-Cities-Finance-Executive-Summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }