Abstract

Cities are indispensable actors in the climate transition but need much more investment to meet climate goals. Currently, 56% of the world’s population lives in cities and 70% of people are expected to reside in urban areas by 2050. 

This increasing urbanization underscores the importance of climate finance for cities. Many are already facing frequent and intense extreme weather events such as floods and extreme heat, particularly in emerging markets and developing economies (EMDEs). For example, 2024 has already seen flooding in Brazil’s Rio Grande do Sul state that displaced 200,000 people and caused USD 3.7 billion in damages, while temperatures exceeding 52°C in Delhi worsened public health challenges and water shortages.

Cities have demonstrated motivation to collaborate with national governments and lead subnational climate action. At COP28, the Local Climate Action Summit highlighted local leaders’ role in emissions reduction while the Coalition for High Ambition Multilevel Partnerships, endorsed by 72 governments, promoted multilevel collaboration on updated Nationally Determined Contributions.

However, our data shows that annual urban climate finance must increase more than fivefold to attain a 1.5°C climate pathway. This reveals a great investment opportunity in low emissions and resilient infrastructure if the following key challenges can be overcome.

The 2024 State of Cities Climate Finance report (SCCFR) provides the most comprehensive assessment of urban climate flows and needs globally. It aims to inform action on the Cities Climate Finance Leadership Alliance (CCFLA) goal of mobilizing finance for city-level climate action at scale by 2030.

This work builds on the framework of the SCCFR 2021, ensuring data comparability and revealing trends in urban climate flows over time. This information can be used to monitor, benchmark, and inform progress. The current report also makes methodological improvements for assessing urban climate finance and, for the first time, presents a granular estimate of what cities need to reach crucial climate benchmarks.