Urban poor receive just 3.5% of global climate finance, amounting to only $1.2 billion of the $33.4 billion in global climate funding granted between 2003 and 2023. Just 225 of the 3,428 programs that Cities Alliance assessed across 22 climate funds had an urban focus, and just 74 of those projects particularly prioritized both urban populations and poorer groups.

At the 29th Conference of Parties (COP29) to the United Nations Framework Convention on Climate Change in Baku, Azerbaijan, on November 18, 2024, Cities Alliance unveiled the study, Climate Finance for the Urban Poor: A Review of Global Climate. The review was carried out by Cities Alliance, a global cooperation organization devoted to combating urban poverty and promoting sustainable city growth.

More than half ($620 million) of this funding was distributed regionally to areas with high slum populations, such as East Asia, the Pacific, and sub-Saharan Africa. Only seven initiatives (less than 10% of the total) and $40 million (4% of the financing) were in South Asia, despite the region’s large informal settlements.

Sectoral Focus and Gaps in Adaptation and Mitigation

The majority of urban-focused programs gave adaptation first priority, with 51% of funding going towards water and sanitation improvements, environmental policy, and protection. Urban resilience and disaster preparedness and prevention contributed somewhat less. The majority of mitigation investment (more than 50%) went towards transportation projects, such as bus rapid transit systems, with energy projects coming in second at just over 25%.

Even though urban poor people are extremely vulnerable, funding methods frequently fall short of meeting their demands. Urban poor receive just 3.5% of global climate finance, reflecting a significant funding gap. The problem was made worse by donor requirements, insufficient national policies, and little participation from local stakeholders.

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Urgent Need to Address Vulnerabilities

More than a billion people live in slums worldwide, and by 2030, that number may quadruple. These populations are more vulnerable to secondary climate impacts like food and water poverty and direct consequences like droughts, flooding, and heat waves.

The study emphasizes streamlining financing procedures, incorporating informal settlements into national strategies, and enhancing collaboration with regional organizations. By addressing these issues, climate funding can more effectively reach those in need. This is especially critical as the urban poor receive just 3.5% of global climate finance, leaving significant gaps in adaptation and mitigation efforts aimed at these vulnerable populations.

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