Mayors from G20 countries call for US$800 billion annual investment towards climate action in cities by 2023

At the Urban20 (U20) Summit, mayors and urban leaders, including representatives from C40 Cities and the Global Covenant of Mayors (GCoM), called for at least US$800 billion in annual public investment by 2030 from national governments and development finance institutions.

This funding is essential to scale up city-level climate initiatives worldwide, supporting healthier, more sustainable, and economically resilient urban areas. The appeal coincides with global discussions at the G20 and COP29, where leaders are negotiating financial commitments for climate adaptation, mitigation, and addressing loss and damage.

Cities are responsible for over 70% of global greenhouse gas emissions and face growing climate challenges alongside rapid population increases. However, they also hold considerable potential for swift decarbonisation and innovation. An annual public investment of US$800 billion in urban climate projects could accelerate climate progress, drawing in private finance and complementing nations' enhanced climate goals, which will be presented as Nationally Determined Contributions at COP30. GCoM projections suggest that this investment could play a pivotal role in reducing emissions to meet the 1.5°C target of the Paris Agreement, a vital benchmark in tackling climate breakdown.

Investment in urban solutions such as low-emission transport, clean energy, and climate-resilient infrastructure not only promises substantial emissions cuts but also economic gains. With the right funding, cities could generate US$23.9 trillion in returns by 2050, transforming transport, housing, and energy sectors, creating millions of jobs, and fostering sustainable economic growth.

The push for urban climate finance extends beyond infrastructure and economic benefits, focusing on people and the need for an inclusive, equitable urban future. As urban populations are expected to grow by another billion people within a decade, cities will be critical for ensuring clean air, safe housing, and sustainable employment. By financing urban climate initiatives that prioritise vulnerable communities, national governments and financial institutions can drive inclusive growth, enhancing public health and improving urban living standards.

A key aspect of a just transition is support for vulnerable groups. For this reason, mayors are calling on multilateral banks and national governments to allocate 40% of low-interest concessional funding to city-led projects that target low-income areas, marginalised communities, workers, and other at-risk populations.

At the Summit, speakers underscored the role of finance in enabling equitable urban development, protecting vulnerable communities from severe climate impacts, and securing a fair transition for all. They emphasised that strong climate leadership at both local and national levels is essential to achieve the Paris Agreement targets

"Cities may be on the frontlines of the climate emergency, but they are also leading the way in climate solutions that directly improve people's lives. Investing in our cities is not just an investment in climate resilience-it's a commitment to a healthier, more inclusive urban future. By securing US$800 billion annually, cities worldwide can be empowered to drive the just transition that will protect vulnerable communities and create jobs that support a greener economy for everyone," said Eduardo Paes, Mayor of Rio de Janeiro.

"As mayors, we see the urgency of climate action in our neighbourhoods and communities every day. Cities can lead the charge on climate by reimagining urban spaces to be greener, healthier, and more sustainable. But to truly transform our cities and meet global climate goals, we need national governments and financial institutions to match our ambitions with real investment. Together, we can create cities that aren't just resilient to climate change, but are vibrant, inclusive places where people thrive," said Anne Hidalgo, Mayor of Paris.

Closing the urban finance gap

Current financial flows for urban climate initiatives fall far short of requirements. The 2024 State of Cities Climate Finance report reveals that while annual urban climate finance between 2021 and 2022 reached US$830 billion, this is significantly below the US$4.5 trillion needed by 2030 to implement necessary urban mitigation and adaptation strategies. As of 2021, public investment in urban climate projects was just US$183 billion per year. This figure must increase by 17%-reaching US$800 billion annually by 2030-to bridge the urban climate finance gap.

Urban leaders are urging for US$800 billion in public investment annually, which would cover approximately 20% of the total climate finance required and stimulate additional private sector funding. They call on national governments and development finance institutions to prioritise urban initiatives, leveraging concessional finance options-such as grants and low-interest loans-to mobilise further private capital.

This call aligns with a growing recognition of the need to adequately fund urban climate goals to meet the Paris Agreement targets and support the global energy transition. It follows an open letter earlier this year from mayors of major cities worldwide to the heads of all Multilateral Development Banks (MDBs), urging them to incorporate urban climate action and financing into their corporate and climate strategies and to embed urban climate goals within their country and sector-level assistance strategies.

Supporting more ambitious NDCs

A major opportunity awaits at COP29 in Baku, where negotiators are set to define funding allocations for climate action across adaptation, mitigation, and addressing loss and damage. City leaders are pressing for a significant portion of the new climate finance fund, known as the New Collective Quantified Goal (NCQG), to be directed specifically toward urban initiatives in developing countries, where climate risks are high, and support for low-income communities is essential. For the NCQG to effectively address the climate crisis, it must prioritise equitable, city-led actions across all three funding themes.

This call builds on the mayors' advocacy at the Local Climate Action Summit, hosted by the COP28 Presidency and Bloomberg Philanthropies. At this summit, over 500 subnational leaders urged national governments to incorporate local climate solutions within their Nationally Determined Contributions (NDCs). The summit also launched the Coalition for High Ambition Multi-Level Partnerships (CHAMP), now endorsed by 74 countries, which aims to foster ambitious climate action by involving city and local governments in national climate planning. Realising these goals, however, will require significant investments in urban climate projects.

"Countries can nearly double their climate ambitions by including city climate plans in their national strategies. Investing in greening cities means a more resilient, healthy, and sustainable future for everyone. Meeting the US$800 billion target with public funds will unlock private sector investment to create jobs and reduce climate tragedies in cities. This financial commitment will catalyze public-private partnerships that are essential to building sustainable cities and protecting the communities that need it most," said Gregor Robertson, GCoM Global Ambassador & Special Envoy for Cities in CHAMP.

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