Cities Are The Next Frontier For Climate Investments

Sudirman in Jakarta
Sudirman in Jakarta (KalderaNews/JS de Britto)

JAKARTA, – Cities in emerging markets alone have the potential to attract more than $29.4 trillion in climate-related investments in six key sectors by 2030, according to a new report by IFC, a member of the World Bank Group.

The report includes detailed assessments of the climate-investment opportunities in six representative cities spanning a variety of geographies, sizes, and climate concerns. Jakarta, Indonesia’s capital represents close to $30 billion investment opportunity, particularly in green buildings, electric vehicles, and renewable energy.

With more than half of the world’s population currently living in urban areas, cities consume over two-thirds of the world’s energy and account for more than 70 percent of global carbon dioxide emissions. How cities address climate change will be critical to efforts to limit global warming to 1.5 degrees Celsius, according to the Intergovernmental Panel on Climate Change (IPCC).


“There’s a great urgency to address climate change – we must take meaningful action now,” said IFC CEO Philippe Le Houérou. “Cities are the next frontier for climate investments, with trillions of dollars in untapped opportunities. To deliver on the promise of climate-smart cities, the public sector needs to enact reforms that are aimed at attracting more private sector financing.”

Globally, green buildings will account for $24.7 trillion of cities’ climate investment opportunities. Significant investment potential exists in low-carbon transportation solutions such as energy-efficient public transport ($1 trillion) and electric vehicles ($1.6 trillion). At the same time, clean energy ($842 billion), water ($1 trillion) and waste ($200 billion) remain essential components of sustainable urban development.

“With the expected dramatic increase in urban population centers in Asia, there’s even more of an opportunity for a low-carbon transition in cities, which already account for much of the GDP in this region,” said IFC Regional Director for East Asia and the Pacific, Vivek Pathak. “In Jakarta, there’s about $30 billion investment opportunity, particularly in green buildings, electric vehicles and renewable energy. The report shows megacities in Asia also have significant potential for investments that yield emission reductions.”

In Jakarta, the report estimates the investment potential in green buildings is $16 billion; in waste $725 million; public transport $660 million; renewable energy $3 billion; urban water $3 billion and electric vehicles $7 billion.

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