Rio de Janeiro, along with Buenos Aires in Argentina and Ahmedabad in India, has formed a working group to finance municipalities worldwide in resilience actions to confront climate change. This task force, supported by C40 (Climate Leadership Group) and UCLG (United Cities and Local Governments), will prepare recommendations for the heads of state of the G20, which gathers the world's largest economies. They are set to convene in September in India. In 2024, the summit will be held in Rio in November.
The initiative's announcement took place at the Urban20 (U20), the gathering of G20 cities, in Ahmedabad. Rio de Janeiro was represented by Lucas Padilha, President of the Rio G20 Committee, and Pedro Spadale, the Municipal Coordinator of International Relations. U20 participants hold considerable financial relevance, collectively forming the world's third-largest economy, trailing only the USA and China. The U20's final statement in India emphasized the need for substantial progress in climate finance.
"Cities are at the forefront of public planning and action to address the climate crisis. In Rio, since 2021, we have had an ambitious Climate Action and Sustainable Development Plan. In addition to the plan, we've developed projects for mitigation, adaptation, and resilience in areas such as transportation, with the new BRT, and environmental amenities like Parque Realengo. Financing and technical support for projects and public policies like these rely on long-term financial instruments with low interest rates. The G20 cities can overcome society's skepticism regarding governments' ambition by proposing reforms and involving national governments in an agenda that prioritizes the structural transformation of the urban environment in response to the climate crisis. Rio, Paris, Buenos Aires, and Ahmedabad are calling on G20 cities to bring concrete proposals to the leaders' meeting in Delhi this year and in Rio in 2024," affirmed Lucas Padilha, President of the Rio G20 Committee.
The coalition formed by Rio, Buenos Aires, and Ahmedabad will collaborate with the Global Commission for Urban SDG Finance, which aims to reform the financial system. The committee was launched last month in Paris by Mayor Eduardo Paes, who serves as co-chair alongside the Mayor of the French capital, Anne Hidalgo, and economist Jeffrey Sachs.
The goal of cities leading this financial system change process is to ensure direct investment and access to essential international financing for cities, especially those in the Global South, to fulfill their climate ambitions. The workflow will focus on formulating specific solutions and recommendations on how to leverage the reform of multilateral development banks to increase the availability and improve access to climate financing for cities.
Many cities face difficulty in obtaining financial credit. Multilateral development banks play a crucial role as they can scale up support for urban climate investments by supporting risk-sharing mechanisms such as grants, blended finance, and guarantees. Consequently, cities would benefit from reduced bank credit costs, increased access to loans with favorable conditions, and attraction of private sector financing.
"The primary focus of the G20 relates to global governance in the economic sphere. Hence, the U20 forwards requests related primarily to climate finance to the G20 heads of state. The aim is a substantial increase in the volume of financial resources allocated to cities to address the climate crisis, not only on a much larger scale but also more rapidly and directly. Cities are responsible for over 70% of greenhouse gas emissions worldwide; therefore, the solution to prevent global warming necessarily involves the local level. Multilateral development banks and funds need to reinvent themselves to address this reality by adopting more effective norms and instruments," emphasized Pedro Spadale, Rio City Hall's Coordinator of International Relations.
