How can the cities of the Global South grow green?

Pegels, Anna / Alexander Kleibrink
External Publications (2023)

published on oecdcogito.blog, 29.03.2023

To plant the seeds for circular economy to grow, cities must overcome three critical gaps. First, they must build the skills in city administrations to embed green tasks into planning and operational activities. They should be guided by dedicated planning offices and project preparation facilities like the City Climate Finance Gap Fund and the C40 Cities Finance Facility. Donors and multilateral development banks could kickstart the financing of such offices. They should make use of tools like City WORKS or tailor-made ones like Circle City Scan Tool and boost their engagement with public utility companies, which in many developing countries can absorb a variety of financial instruments that city governments alone often cannot. The Lagos State government announced a far-reaching plan to overhaul the entire waste management system and public utility to generate 6,000 green jobs and deal with the problems of air pollution and littering. Second, they must close the investment gap. The Cities Climate Finance Leadership Alliance estimates that the annual investment gap for sustainable urban infrastructure amounts to up to five trillion USD. To close this gap, cities must embed circular components into large infrastructure projects that are already ready for financing. The Indian government has made it mandatory to use waste plastics for road construction around large cities. While the possible consequences of spreading micro-plastics should be studied carefully, local governments can build a new income stream from selling waste plastics through this circular approach. They can also boost their engagement with the private sector and with global initiatives, for instance through the new G7 Partnership for Global Infrastructure and Investment. Third, cities must boost innovation. To do so, they can scale-up successful multi-stakeholder partnerships like the PREVENT Waste Alliance and create more university partnerships like the Circular Campus Programme for training, research and diffusion of green technologies. These should be coupled with complementary activities to support vocational education and training, and venture capital programmes to back the ecological innovation potential of start-ups. One example is Singapore-based Circulate Capital. This private equity fund focusses on waste management and circular solutions with a focus on Southeast Asia.

About the author

Pegels, Anna

Economist