COP29 Highlights: Key takeaways for cities and the built environment

Advancing urban resilience to climate change through financing

For the first time in 15 years, COP29 established a long-term climate finance target, paving the way for transformative urban investments. Nations agreed to mobilize $1.3 trillion per year by 2035, including a short-term target of $300 billion per year to support vulnerable nations. These funds are intended to help cities and regions build resilience to climate risks such as flooding, extreme heat and sea level rise, while promoting sustainable urban development. However, there remains a lack of clarity over how much of this funding will go directly to urban initiatives, as the agreement does not specify allocations to sectors or regions. Additionally, regions that are rapidly urbanizing, particularly in developing countries, require much greater resources to modernize their infrastructure and protect their residents from increasing climate impacts. Overall, the COP29 funding agreement represents a crucial starting point and must be strengthened to truly meet the needs of urban areas.

Carbon markets as a tool for urban innovation

A major step forward at COP29 was the adoption of a global framework for the international trading of carbon credits under Article 6 of the Paris Agreement. This mechanism allows nations and entities, including cities, to offset their emissions and attract financing for climate projects. For urban areas, carbon credits represent a new financial avenue to support sustainable development efforts. These markets can help finance initiatives such as energy-efficient building renovations, low-carbon public transport systems and urban green infrastructure. While this framework is a positive step, detailed guidelines for registries and reporting are still being developed, determining whether carbon markets will generate the scale of financing needed. Still, proponents say these markets could attract billions of dollars into urban sustainability projects, providing cities with the resources they need to innovate and adapt.