Building better cities: responding to the twin challenge of inequality and climate change

How can cities promote resilient, low-carbon and just urbanisation, in a context of increasing climate breakdown and inequality? IIED’s urban researchers set out a vision for urban transformation to build just and inclusive cities. 

Article, 23 June 2022
Better cities are possible: achieving resilient, low-carbon and inclusive urban development
A series of articles looking at ways to achieve resilient, low-carbon and inclusive urban development
An illustration showing people and flowers in front of tall buildings.

More than a third of the world’s urban population lives in informal settlements that lack basic services and suffer deficits in governance. IIED's 'Better cities' report sets out new approaches to data, participation and finance to tackle the twin crises of inequality and climate change (Image: IIED)

Building on the core principles of IIED’s framework for transformative urban recovery co-developed with grassroots organisations, national and international agencies, research institutions, international NGOs and city leaders, our researchers identified four key action areas for 2022: 

Throughout 2022, IIED and partners will be exploring how cities can be sites of transformative change through these four interlinked themes.  

However, effective decarbonisation and adaptation strategies in cities will depend on developing local institutions in ways that go beyond our existing understandings of partnerships and participation.  

Meaningful and transformative planning that tackles the twin crises of inequality and climate change will depend on new approaches to data, participation and finance.

This is part of a series of articles setting out a vision for urban transformation that responds to the twin crises of climate change and inequality.

Tackling twin crises in cities: the climate emergency and inequality

COVID-19 continues to compound the risks (PDF) associated with unequal access to resilient housing and basic services in informal settlements and low-income urban areas. Meanwhile, COVID-related restrictions and subsequent economic downturns have severely challenged households with precarious informal livelihoods and few assets or savings, and pushed many into poverty.  

Reversals in poverty reduction are projected to continue throughout 2022 as a result of rising inflation and the effects of the conflict in Ukraine. The pandemic has exacerbated often overlapping disadvantages based on gender, age, class, sexuality, ethnicity or race. 

In addition, institutionally embedded exclusion means that certain groups have added difficulties in accessing economic assistance programmes. Vulnerable groups such as migrants and refugees have had to bear an especially heavy toll, and in some cases were targeted for increased police surveillance and control during lockdowns and economic restrictions. 

The backdrop of these developments is that towns and cities are highly exposed to a wide range of hazards. Currently, 65% of the world’s urban population live in coastal zones that are beset by a range of hydrometeorological hazards such as sea-level rise, floods, droughts, hurricanes and tornadoes – and this proportion is likely to increase to 74% by 2025.  

A range of factors from in-migration and types of housing to land use and population density influence the degree to which urban populations are exposed to disturbances.  

Urban areas are also highly vulnerable as more than a third of the world’s urban population lives in informal settlements that lack basic services and suffer deficits in governance – conditions that challenge people’s capacity to adapt.  

Moreover, almost 750 million urban residents across the world earn less than US$2 per a day and lack the financial safety nets needed to bounce back from disruptions. A recent survey of cities found that 92.5% of those sampled reported facing the impacts of climate change.  

In this way, urban areas are highly exposed and vulnerable to a range of hazards and therefore are on the frontlines of climate risk. 

The latest Intergovernmental Panel on Climate Change reports (2022a and 2022b) set out the huge inequalities in carbon consumption and the distribution of climate risks and green infrastructure benefits within and between cities.  

However, the scale of activities and population size means that there are opportunities to decarbonise and develop inclusive and resilient access to basic services and housing at scale, especially in cities in the global South where most urban population growth is expected to happen.  

The impact of these interventions will depend on a whole range of regulatory and institutional issues including access to technology, local governance capacity, civil society participation and municipal budgetary powers.  

The report also notes that there are trade-offs and therefore, without a focus on equity, the benefits of infrastructural, mitigation and adaptation investments might not be equally distributed. 

Effective decarbonisation and adaptation strategies will depend on local institutional development that progresses beyond our existing understandings of partnerships and participatory processes. Instead, local institutional arrangements should enable inclusive leadership and agency so those that are most vulnerable can co-produce affordable and equitable solutions with local stakeholders.  

Cities need better data, leadership and finance 

During 2021, IIED’s urban researchers worked with over 50 grassroots organisations, international agencies and other key urban stakeholders to co-create an inclusive urban framework to inform transformative COVID-19 recovery pathways.  

The process highlighted the urgent need for radical, systemic, green and inclusive urban policies and interventions to protect against future shocks and stresses, not limited to pandemics. Using the framework as a springboard, we are now focusing on how integrated data, local leadership and more nimble finance can support efforts to tackle multiple risk in cities. 

Better data, participatory decision-making processes and more finance are regularly cited as key ingredients for building, greener, more resilient and inclusive cities. But in practice, efforts to develop net zero pathways or promote just transitions on all three fronts have not gone far enough.  

The climate emergency risks social and economic inequality continuing to grow in urban areas. And unequal, carbon-intensive development continues to be the norm in most cities.  

Transformative change will be dependent on a radical redistribution of power and resources by decentralising flexible finance to local institutions and communities, creating autonomous decision-making powers and leadership at the local level, and recognising more diverse forms of actionable knowledge and local data. 

Integrated local data 

Low-income and informal urban communities have been systematically excluded from city maps, planning and governance processes for decades. Yet local data has been an effective political strategy used by organised communities and federations of the urban poor to engage with city authorities and planners around basic needs and urban risks.  

Making transformative change a reality in cities will require serious commitment. Scientific data and big data must be used alongside locally controlled knowledge and data to build a more robust understanding of climate risks and vulnerabilities in cities.  

We need a deeper understanding of poverty and inequality, migration flows, access to basic service and housing priorities in cities and informal settlements. This can support efforts to ensure that the needs of the most marginalised are accounted for.  

Data can inform participatory planning processes and policymaking alongside guiding climate-just investments in urban infrastructure and specifically in informal settlements. 

Transformative local leadership 

Progressive, holistic interventions are urgently needed to address the complex risks facing urban low-income residents, building on inclusive local initiatives responding to the pandemic.  

Low-income communities have lived experiences of poverty and climate risk but have historically been excluded and marginalised from decision-making processes and planning in the city.  

Success will be dependent on the institutionalisation of locally owned processes that go beyond participation that is managed by external actors. Urban institutions should foster local agency and leadership to enable low-income groups to identify and co-produce appropriate solutions with other city stakeholders.  

Nimble and flexible funding 

Climate finance is inadequate and unequally distributed. Urban areas still tend to receive lower levels of international development and climate finance (PDF) than rural areas. Climate finance is also often focused on financing large-scale, top-down infrastructure, with little accountability to local communities, particularly in informal settlements.  

To respond to the climate emergency and increasing levels of inequality and the Sustainable Development Goals at scale, cities and communities urgently require additional diverse forms of nimble and flexible funding that can support and finance integrated, holistic and equitable investments in urban areas. 

These resources should be autonomously managed by local communities and local governments. As more climate funding is made available to cities and communities, locally owned participatory processes can ensure that investments also respond to pervasive poverty and inequality in informal settlements.