How to move from creating to implementing a national urban policy

If the world’s cities are truly going to embark on a more sustainable path, they’re going to need a lot of advice. That’s where the Coalition for Urban Transitions comes in.

A new think tank jointly managed by the World Resources Institute and the C40 Cities Climate Leadership Group, the coalition will draw on academic, NGO and private sector expertise to provide evidence-based guidance on how urban growth can benefit both people and the planet.

The coalition is a subset of the New Climate Economy, a similar effort aimed at providing research for countries transitioning into more climate-friendly economies.

While the coalition will work on sustainable urbanisation, its target will not be cities themselves. Rather, the effort will focus on national-level decision-makers whose policies affect cities, from heads of state to ministers. That will include work on national urban policies, the focus of a key meeting this week in Paris.

Ultimately, to deliver on the Sustainable Development Goals, national leaders will have to rely on cities to do a lot of the pulling.

Nick Godfrey, head, New Climate Economy

[See: Since Habitat III, an uptick in interest around national urban policies]

Citiscope’s Gregory Scruggs recently spoke with economist Nick Godfrey, the New Climate Economy’s head of policy and urban development. This interview has been edited for length and clarity.


Gregory Scruggs: What is the Coalition for Urban Transitions?

Nick Godfrey: The Coalition for Urban Transitions is a new international collaboration that will help make the economic case for better urbanisation. It brings together leading thinkers across the public, private and third sector on sustainable urbanization from all around the world.

What’s pretty distinctive about the coalition is that its focus is not at the city level: Its focus is on working with key national decision-makers. The reason for this is that many of the powers and levers that impact the performance of cities are in the hands of national leaders — so heads of state, finance ministers, energy, transport and urban development ministers.

This is really about implementing the New Urban Agenda. It’s also about implementing the Sustainable Development Goals (SDGs), and it’s about implementing the national climate commitments. Because ultimately, to deliver on the Sustainable Development Goals, national leaders will have to rely on cities to do a lot of the pulling. It’s the same with the [New Urban] Agenda — it’s absolutely going to have cities at the front and centre. And when it comes to the Paris climate commitments, to actually execute on any of those national commitments, cities are going to have to play a really important part.

This is about equipping national leaders with the tools to enable and support cities to deliver on the SDGs and climate agenda.

Q: What do you see as the primary barriers for cities to help their national governments deliver on these commitments?

A: There’s a whole bunch, and they vary markedly by geography. C40 just did some analysis on this, and they basically asked the question, “What levers do cities have to deliver on their ambitious climate action plans?” And it turns out that cities have made all of these very ambitious climate commitments, but they only unilaterally have the powers to deliver on 5 percent of that commitment.

[See: Initiative aims to make more green infrastructure projects ‘bankable’]

For example, finance is a huge barrier. Many cities have very narrow domestic revenue bases. Only 4 per cent of the 500 largest cities in the world are creditworthy in international finance markets. That makes it very difficult for them to leverage and raise financing for sustainable urban infrastructure, which would enable them to deliver on their climate commitments, for example.

Q: How can national governments help their cities become creditworthy?

A: National governments can do a hell of a lot. There are national governments that are really considering how do they help not just one city but multiple cities across a country. The Indian government is looking at this very seriously: As part of their 100 Smart Cities programme, they’re basically saying, “How do we take our 20 largest cities and most important cities, and make sure that they are able to graduate to investment grade status within a period of time?”

Part of this is technical assistance. There are cities like Kampala, for example, in Uganda — a relatively poor city which received technical assistance and effectively doubled its domestic revenue base in the space of a year by making some very modest changes related to tightening loopholes related to tax collection, etc.

With some very modest technical assistance, it was able to very quickly achieve a credit rating and start to mobilize capital for investment in sustainable urban infrastructure. Technical assistance to support cities to better manage their finances is really critical.

A second key thing has got to be about providing cities, where appropriate, with some of the powers that they need to start to grow their domestic revenue bases. Clearly this needs to be done very carefully and with the right fiduciary oversight and safeguards, but it is important for national governments to work hand in hand with cities to make that happen.

[See: Make no mistake, momentum is growing to ‘localize’ climate finance]

A third element to this, which national governments can help with, is facilitating international finance institutions’ money to support those processes. There are big facilities like PPIAF — a big technical assistance program that, for example, helped Lima improve its credit rating recently, essentially allowing it to access capital markets, to invest in a [bus rapid transit] system. There are lots of examples where national governments can help facilitate a relationship with international financing institutions and help improve that.

I think empowering cities to experiment with things like municipal green bonds is important. Johannesburg had a very successful bond issuance relatively recently, and that was supported by national government.

Often things that national governments can do is embedding in legislation the ability for cities to start to develop development-based “land value capture” mechanisms, which enable cities to effectively levy the increased value of land when they invest in sustainable urban infrastructure such as transport systems.

London’s done this with Crossrail, and there’s a whole bunch of other examples in many other cities. That was enabled by primary legislation through national governments.

[See: How São Paulo uses “value capture” to raise billions for infrastructure]

Q: Do you hear a common concern from national governments that, “Well, ultimately the buck stops with us”?

A: There is absolutely that concern. This is why it’s so important that national governments and cities work so closely together, and that any level of increased devolution of fiscal and other powers to cities has to be done very carefully and in a very sequenced way, and in line with building the capability and capacity of cities to prudently manage their finances.

There are plenty of examples of cities all around the world that have done this very successfully, so there is a lot of best practice that can be drawn on.

This story was published with permission from Citiscope, a nonprofit news outlet that covers innovations in cities around the world. More at Citiscope.org.