Helping Policymakers and Stakeholders Understand Risk and Design Effective Policies for Urban Resilience

According to a report developed by Economist Impact and supported by the Tokio Marine Group, "The world is facing unprecedented challenges. Extreme weather events, from hurricanes and wildfires to flooding and heatwaves, are becoming more frequent and their effects more devastating." Furthermore, "Emerging risks like cyber-attacks loom larger as technology dependence deepens. Our cities are exposed to all of these risks and more. Lives and livelihoods depend on our ability to understand and mitigate the evolving threats to our urban centers."

The Resilient Cities Index highlights three phases to resilience. "Preparation and mitigation come first. Understanding the risks, how they are evolving and taking steps to minimize their impact is essential if cities are to avoid the worst. The second phase is response, necessitating swift reactions and timely assistance to save lives and diminish the impact when disasters occur. Last is recovery, emphasizing the need to learn from tragedies and rebuild stronger, better-equipped communities for future shocks and stresses."

Aiming to help policymakers and stakeholders understand risk and design effective policies for urban resilience, Economist Impact developed a benchmark of 25 cities. To gauge the resilience of these cities, the report's authors took measurements across four pillars: critical infrastructure, environment, socio-institutional and economic. This white paper combines index analysis with expert commentary to identify patterns, common strengths, deficits and best practices across index cities.

Key findings from the inaugural edition of the Resilient Cities Index include:

• Cities performed well in the critical infrastructure pillar of the index, but there are some weak points that require strategic focus. The cities with the highest scores were Dubai, Shanghai, New York and Singapore. These capital-rich market locations have greater opportunities to develop new infrastructure, compared with European cities constrained by decades- or centuries-old systems. Within this pillar, digital infrastructure and transportation were a drag on cities' resilience.
• Cities that use data and technology to create operational efficiencies and share information with their citizens—i.e., smart cities—are better at dealing with shocks. Patchy internet quality, which can impede access to digital services, pulled down the overall resilience score in the critical infrastructure pillar. Digital technologies and advanced data analytics can help to predict risks, optimize existing systems and keep the public informed. Greater digitalization comes with risks, especially to critical infrastructure, but most cities in the index have built safeguards against this.
• Most emerging economy cities lack adequate regulatory frameworks, strategies and incentives for futureproofing infrastructure. Only a few cities in the index achieved high scores for future-proofing, which involves ensuring infrastructure preparedness for shocks while managing current and future emissions. One way cities can future-proof is by incentivizing sustainable designs for buildings, such as installing green roofs, incorporating modularity and retrofitting for energy efficiency—a practice only found in high-income cities in the index.
• Efforts to achieve environmental resilience are led by innovative solutions. Cities are employing a variety of nature-based solutions to adapt to flooding and heat stress, from planting rooftop vegetation and mangrove forests (green infrastructure) to rehabilitating wetlands (blue infrastructure). Cities are also decarbonizing by adopting renewable energy and negative emission technologies, such as carbon capture, storage and removal. However, the scalability of these technologies is likely to be challenging for resource-constrained emerging market cities.
• Cities demonstrated poorer performance in the socio-institutional pillar, mostly due to income inequality and poor health and well-being metrics. Only nine cities have a single, comprehensive plan to support vulnerable groups. However, one bright spot is that cities are promoting a culture of readiness to act in the event of a disaster. The majority of cities scored highly on this or are working to improve their readiness.
• Cities had the lowest average scores in the economic pillar, dragging down some cities that performed well in other areas. The low penetration of financial safety nets hinders safeguards against threats and undermines a city's ability to recover from shocks. Another aspect of economic resilience is a city’s ability to incubate innovation, which can foster solutions to a range of problems, from congestion to water stress. Unfortunately, most cities scored poorly on the indicator for start-up ecosystems.

The report's conclusion points out that "A resilient city is not only prepared for shocks but has the ability to bounce back and thrive. Recognizing both existing and looming threats will help cities better understand their vulnerabilities and design targeted actions. However, building such cities requires stakeholders from government, businesses and communities, as well as individual city-dwellers, to engage in holistic resilience thinking at community and municipality levels."

Moreover, "While resilience needs to be tackled in myriad ways, a number of critical strategies have been identified in the course of this research and are summarized below."

• Empower the community to be active participants. This is contingent on the democratization of information. All city-dwellers should have equal access to government information, including what to do in an emergency. Some cities, like Singapore, do this very well, using digital channels to disseminate information to everyone simultaneously. Fostering a culture of readiness and the ability to manage hazards will require investment to train and educate people at governing and grassroots levels to be stewards of their city. Recognizing that information is key, municipalities could consider partnering with a digital platform to minimize misinformation and ensure the city moves in one direction, despite disruption.
• Social cohesion efforts need greater advancement across the board. Cities are nothing without the people who inhabit them. Greater attention to social cohesion will help to ensure cities are less fragmented, adaptive and better prepared for shocks. City governments should overlay resilience efforts with initiatives that aim to improve the lives of urban residents. This process should be driven by city leadership and engage civil society. The majority of cities in the index have some way to go to strengthen social cohesion through integration programs for society's most vulnerable.
• Early warning systems (EWS) are vital for safe cities but investment is needed to hit the 2027 target. National governments and municipality leaders will have to collaborate to ensure universal early warning systems coverage by 2027. There are two challenges that need to be met. First, capital is needed to bridge the investment gap for technologies with a greater push for the development and adoption of frontier and horizon tech–from drones to AI. Second, governments need to facilitate the necessary legislation to connect these EWS to emergency and response plans to ensure there are protocols and resources in place to deal with climate extremes and hazards. Community acceptance and responsiveness to early warnings are essential in the effectiveness of EWS. This can be achieved through systematic training and education and awareness programs.

What do you think of the report's findings and conclusions? Do you have additional recommendations on how policymakers and stakeholders understand risk and design effective policies for urban resilience?

​Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Report Calls for Urgent Support to Developing Countries to Attract Massive Investment in Clean Energy

In its 2023 edition of the World Investment Report, the United Nations Conference on Trade and Development (UNCTAD)  called for urgent support to developing countries to enable them to attract significantly more investment for their transition to clean energy. Through this report, the Swiss-based agency of the United Nations, which promotes inclusive and sustainable development through trade, investment, finance, and technology, shows that much of the growth in international investment in renewable energy, which has nearly tripled since the adoption of the Paris Agreement in 2015, has been concentrated in developed countries.

In writing the report's Preface, António Guterres, Secretary-General of the United Nations, explains that the report "has an important role in the biggest battle of our lifetime: keeping temperature increases below the agreed limit of 1.5°C. By monitoring global, regional and national investment trends and developments, this report supports policymakers by showing where investment is on track, and where more is needed. The report's recommendations are an important guide to boosting climate finance and investment in developing countries – one of the most important factors in combating the climate crisis."

The report presents three key messages:

Global FDI retreats, but new project announcements show bright spots

"Global foreign direct investment (FDI) declined by 12 percent in 2022, to $1.3 trillion. The decline was mainly a result of lower volumes of financial flows and transactions in developed countries. Real investment trends were more positive, with growth in new investment project announcements in most regions and sectors. FDI in developing countries increased marginally, although growth was concentrated in a few large emerging economies. Inflows in many smaller developing countries were stagnant, and FDI to the least developed countries (LDCs) declined."

The report also notes that "Industry trends showed increasing project numbers in infrastructure and industries that face supply chain restructuring pressures, including the electronics, automotive and machinery industries. Three of the five largest investment projects were announced in semiconductors, in response to global chip shortages. Investment in digital economy sectors slowed after the boom in 2020 and 2021."

In addition, "Investment project numbers in energy remained stable, allaying, for now, fears of a reversal of the downward trend in fossil fuel investment due to the energy crisis. Oil majors are gradually selling fossil fuel assets to private equity firms and smaller operators with lower disclosure requirements, which calls for new dealmaking models to ensure responsible asset management."

The SDG investment gap widens despite the growth of sustainable finance

"International investment in sectors relevant for the Sustainable Development Goals (SDGs) in developing countries increased in 2022. Infrastructure, energy, water and sanitation, agrifood systems, health and education all saw increased project numbers. However, compared to 2015 when the SDGs were adopted, progress is modest."

Moreover, "A review of investment needs at the midpoint of the 2030 Agenda for Sustainable Development shows that the investment gap across all SDG sectors has increased from $2.5 trillion in 2015 to more than $4 trillion per year today. The largest gaps are in energy, water and transport infrastructure. The increase is the result of both underinvestment and additional needs."

The report also explains that "The growing SDG investment gap in developing countries contrasts with positive sustainability trends in global capital markets. The value of the sustainable finance market reached $5.8 trillion in 2022. Sustainable funds had positive net inflows while traditional funds experienced net outflows. Sustainable bond issuance also continues; it has grown five-fold over the past five years. Key priorities for the market are increasing exposure to developing countries and addressing greenwashing concerns."

Developing countries need vastly more support to attract energy investment

The report points out that "International investment in renewable energy has nearly tripled since the adoption of the Paris Agreement in 2015. However, much of this growth has been concentrated in developed countries." What is more, "More than 30 developing countries have not yet registered a single utility-sized international investment project in renewables. The cost of capital is a key barrier for energy investment in developing countries. Bringing in international investors in partnership with the public sector and multilateral financial institutions significantly reduces the cost of capital."

The report also importantly says "Most developing countries have set targets for the energy transition in nationally determined contributions. Only about one third of them have translated those targets into investment requirements, and few have developed the asset specifications that are needed to design targeted promotion mechanisms and to market bankable projects. As a result, many developing countries use generic fiscal and financial incentive mechanisms that are less effective for the promotion of energy transition investment."

Lastly on the topic of developing countries needing more support to attract energy investments, I strongly support UNCTAD's assertion that "De-risking support to lower the cost of capital for energy transition investment in developing countries must be vastly expanded. More technical assistance should be available for investment planning and project preparation. International investment agreements need accelerated reform to expand policy space for climate action and to strengthen investment promotion and facilitation provisions." Through this report, the Swiss-based agency of the United Nations, which promotes inclusive and sustainable development through trade, investment, finance, and technology, puts forward a Global Action Compac for Investment in Sustainable Energy for All with recommendations for national and international investment policies, global and regional partnerships, financing mechanisms and capital market involvement.

Writing the Forward, Rebeca Grynspan, Secretary-General of UNCTAD, insightfully notes that "Armed with the data and insights this report offers, it is imperative that stakeholders approach investment with a strategic mindset. The complexities and disparities highlighted demand astute decision-making, as the road ahead is fraught with challenges. Together we must navigate this landscape with resolve and intelligence, shaping a more sustainable and equitable world for generations to come."

What are your recommendations for developing countries can attract investment to bolster their clean energy sector?

​Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Indonesia's Opportunity to Leverage Digital Assets and Wireless Technology Infrastructure to Address the Climate Emergency

If there is any chance of meeting the goal set forth in the Paris Climate Accords, an international treaty on climate change that was signed in 2015 that aims to keep the rise in mean global temperature to well below 2 °C (3.6 °F) above pre-industrial levels, various industries will need to make efforts to employ climate technology help achieve this ambitious goal to substantially reduce the effects of climate change. Having both extensive experience working in Indonesia and within the mobile industry worldwide, a report by the GSMA caught my attention that explores the potential for mobile-enabled technology solutions to enhance Indonesia's climate mitigation and adaptation efforts.

Funded by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the report notes, "Indonesia faces a unique set of climate change challenges, from extreme flooding to extended drought, changes in rainfall patterns and temperature and sea level rise." Moreover, "These risks are intensified by a dense population of 270 million people living in hazard-prone areas, and approximately 60 percent living in low-lying coastal cities. Indonesia is the world's eighth biggest emitter of greenhouse gases (GHGs). Forestry and other land use practices, energy and waste are key contributors."

The GSMA, a UK-based organization that represents the interests of mobile operators worldwide, explains that its report "presents an overview of the main climate challenges facing the country and examines the potential role of mobile-enabled technology in unlocking novel and innovative responses to climate change. All this centers around three focus areas for climate action in Indonesia: energy, waste and natural resource management."

What is more, "To create a clear picture of the distribution of climate technology in Indonesia, including where investment is primarily focused, the Mobile Innovation Hub Indonesia team reviewed publicly available literature and compiled a list of 48 examples of technology-enabled climate solutions currently deployed, piloted or in the proof-of-concept stage in Indonesia’s energy, waste and natural resource management sectors." The report also points out that "The highest concentration of climate technology was found in the energy and waste sectors, with just under half of climate solutions relating to waste. Technologies for sorting and recycling in the waste sector, as well as energy management and natural resource management are some of the most prevalent solutions."

"Interviews with stakeholders, including MNOs, mobile infrastructure organizations, government officials and ministries, revealed technical, political and behavioral barriers that are limiting the uptake of mobile-enabled solutions for climate mitigation and adaptation."

Three key barriers that is slowing uptake of mobile-enabled solutions in Indonesia include:

Technical barriers: The availability of mobile and digital infrastructure and access to affordable and connected devices. Although robust government approaches are making strong headway, there are still regional and remote island locations without sufficient connectivity. When it comes to implementing climate technologies these are important considerations.

Political barriers: The political, social and ecological decisions and actions affecting climate change decision-making or uptake of mobile-enabled technologies.

• Collaborative environment: Limited collaboration between governments, the private sector and communities
• Data sharing and management: Lack of data integration and reliance on manual data collection processes
• Policy and regulation: Lack of policy incentives and weak regulations that hinder industry
• Investor appetite: Investments in Indonesia focus on technology in general rather than climate technology specifically
• Access to capital: Weak appetite for investment has left innovators with low access to capital
• Talent: Limited access to talent to develop, roll out and monitor mobile-enabled technology solutions

Behavioral barriers: The individual and collective assumptions, beliefs, values and worldviews on climate change responses:

• Unclear value propositions: Inability to demonstrate the value proposition to end users, coupled with cultural barriers
• Digital literacy: A barrier for end users that lead to suboptimal use or the need to embed manual back-up methods when rolling out solutions

To address these barriers, the GSMA recommends an ecosystem approach in which mobile-enabled solutions would provide a clear path to achieve Indonesia's climate goals. This would include:

1. Investing in mobile-enabled connectivity and digital and climate literacy to reach the most rural areas and offer innovative climate technologies.
2. Building trust between stakeholders operating in the same ecosystem, creating forums to share lessons, building on successful innovations and developing science-based narratives to strengthen coordination.
3. Building the capacity of the public sector and communities to implement or use mobile-enabled climate technology to increase uptake.
4. Using a human-centered design (HCD) approach to ensure climate technology is relevant and the value proposition is clear to end users.

I appreciate how this report explores the potential for mobile-enabled technology solutions to enhance climate mitigation and adaptation efforts in Indonesia. It also presents a useful overview of the main climate challenges facing Indonesia and examines the potential role of mobile-enabled technology in unlocking novel and innovative responses to climate change.

What are you recommendations for how emerging markets like Indonesia can leverage their digital assets and wireless technology infrastructure to address the climate emergency?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

Supporting Innovative Solutions on Climate Adaptation

The World Bank recently announced its Development Marketplace competitive grant program (DM09). "The Development Marketplace is a competitive grant program administered by the World Bank. The 2009 global competition is funded by the Global Environment Facility (GEF) and additional DM partners." An award pool of more than US$5 million will support 20-25 projects. DM09 aims to identify "innovative, early-stage projects addressing climate adaptation. The DM is a unique opportunity to turn your idea into reality; if selected your project could receive up to US$200,000 in grant funding for implementation over two years."

The grant competition on climate adaptation focuses on three sub-themes:

1. Resilience of Indigenous Peoples Communities to Climate Risks--promote Indigenous Peoples communities' and organizations' development of innovative ways to conserve agriculture, land, water and soil management practices; apply innovative adaptation plans and communication strategies based on Indigenous systems to accelerate learning and knowledge sharing on climate change adaptation;
2. Climate Risk Management with Multiple Benefits--empower poor communities to test innovative, low-cost strategies to spread climate risk and forge innovative partnerships that increase vulnerable communities' access to climate risk management knowledge, information, and services that produces multiple social and environmental benefits; use innovative means to help educate communities on climate risks that leads to empowerment for action.; and
3. Climate Adaptation and Disaster Risk Management--develop innovative arrangements that diffuse climate-related disaster risks faced by the poor and vulnerable; create innovative low-cost approaches for spatial planning for climate resilience and for construction of housing and local infrastructure resistant to climate-related disasters; improve the capacity of local communities to access and use multi-hazard risk information to enhance their early warning systems and other community-based responses to climatic extremes and climate change.

Who can apply? Special eligibility criteria apply to sub-theme one. For sub-themes two and three, non-governmental organizations, civil society organizations, foundations and development agencies based in the country of implementation may apply without additional partners. All other groups such as the private sector must partner with at least one organization; the type of partnership varies across types of applicants. Individuals cannot apply. Click here for more details on partnerships and eligibility criteria or check the guidelines. E-mail any questions not covered in the website to dminfo@worldbank.org.

All proposals must be submitted online. Proposals must be submitted through the DM online application form available on the DM website. Only proposals received before May 18, 2009 6 p.m. EST (20:00 GMT) will be considered.

The World Bank's official press release to launch DM09 explains that the "DM competitions attract nearly 3,000 applicants, from which about 100 finalists are selected. Finalists competing for grants will be invited to the Development Marketplace held November 3-5, 2009, in Washington, D.C."

I wish all the participants the best of luck and please feel free to share you innovative ideas on this blog.