Banks join forces to combat climate change in cities

The world’s five multilateral development banks have agreed on a new partnership in Durban today. The banks lend around $8.4 billion each year for specific climate action in cities and are a key tool to combat climate change in developing countries. The aim of the partnership is to better coordinate support to cities, which are struggling to adapt and mitigate against climate change.

The African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and the World Bank have said they will, “develop a common approach for cities to assess climate risk, standardize greenhouse gas emissions inventories, and encourage a consistent suite of climate finance options”.

Jean-Patrick Marquet, Director for Municipal and Environmental Infrastructure at the EBRD, said that “The sustainability and climate change challenges for cities can be managed with a multi-faceted approach involving active stakeholders’ participation in pursuit of both environmental benefits and transition objectives”.

The EBRD is a unique entity in Europe, as it lends only to private sector projects it considers sustainable, as well as having to be financially viable. As a result it has created many financially proven, sustainable and long term projects which have helped to reduce emissions in many countries in Europe and the former Soviet block.

One of the barriers to a new climate deal is the belief among developing countries that it is the responsibility of the developed countries to combat climate change. With institutions like EBRD expanding their programs, perhaps the developed world can finance emissions reductions in poorer countries without resorting to massive grants, instead focussing on projects that can offer a realistic possibility of getting a return on their investment.