Cities in emerging markets could attract U$29tr in climate-related investments, such as green buildings and electric vehicles over the next decade, according to the World Bank Group's International Finance Corporation (IFC).
Researchers from the IFC looked at the climate action plans of cities with more than 500,000 people, focusing on six sectors: green buildings, public transport, electric vehicles, waste management, water treatment and renewable energy.
"Getting the cities right is absolutely essential for climate," said Alzbeta Klein, the IFC's director for climate business. "They play a role in how climate looks and how it defines for the next generation ahead of us."
According to the IFC, more than half of the global population live in urban areas, with cities consuming two-thirds of the world's energy and accounting for more than 70 per cent of all carbon dioxide emissions.
To oblige the targets endorsed by governments at the 2015 Paris Agreement to curb climate change, green investments, targets and policies in cities will be crucial if countries are to meet reductions in emissions.
Green building codes, which include reducing energy consumption, will account for $24.7tr of climate investment opportunities in cities by 2030, the report estimates.
Furthermore, low-carbon transportation such as energy-efficient public transport could attract $1tr during the same period, while electric vehicles could see $1.6tr in investments. Also, clean energy could bring $842bn of investments, while water may attract $1tr and waste management $200bn.
Over half of the total estimated investment potential will be needed in East Asian and Pacific cities as they expand and spend on real estate, infrastructure and transport, said Aditi Maheshwari, lead author of the study.
"Cities are driving economic growth in East Asia and the Pacific - they account for over 80 per cent of GDP in most countries," Maheshwari added.
"The scale of this economic opportunity is drawing people into the cities and we anticipate an additional 1.2bn people will live in Asian cities in the next 35 years."
Maheshwari also highlights how the rate of change in China is likely to account for a significant portion of climate-related investment in the region.
IFC's director, Klein, also says that cities need the ability to borrow money and develop innovative methods like green bonds and public-private partnerships to attract investment and create a pipeline of bankable projects.
On Wednesday, a network of cities pushing climate action, known as C40 Cities, announced that nine cities would be given specialist support to develop sustainable infrastructure projects over the next two years.
The cities – which include Bogota in Colombia, South Africa's Tshwane and Quezon City in the Philippines – will get help from national and international experts to prepare financially sound business proposals for projects, such as those regarding bike-sharing, cycle lanes, waste water treatment and rooftop solar energy, all highlighted in the C40 statement.
Earlier this November, a study from the University of Waterloo claimed that companies that fail to restrain their carbon output may face a decline in stock prices and assets.
Also, in October, newly-elected President of Brazil, Jair Bolsonaro, pledged to keep the South American country in the Paris Agreement, prior to the election, although his environmental tone has changed significantly for the worse in recent weeks.
