Enabling city resilience bonds
For the first time in history, more people worldwide live in towns and cities than in rural areas. Urban areas, owing to their location, demographics and governance contexts, ‘concentrate’ climate risk. And globally, one third of all urban residents live in informal settlements, which are characterised by a high degree of vulnerability and low adaptive capacity.
However, international climate finance has largely overlooked cities’ needs, leading to an urgent requirement for innovative and local mechanisms to generate finance for urban resilience. City resilience bonds are one such mechanism, with significant promise to make a difference. Through these bonds, a city government or agency can raise money from capital debt markets for investment in building resilience.
The time is right to embrace city bonds as a significant, tried and tested instrument of sustainable finance through which to tackle climate change in cities and urban areas, and that puts city governments in the lead on investment decision making.