Executive summary

Intermediary cities provide an unprecedented opportunity for advancing with climate mitigation and adaptation efforts. Increasing evidence, including the latest assessment of the International Panel on Climate Change, reaffirms that global anthropogenic greenhouse gas (GHG) emissions are not decreasing at the expected pace. The world is thus reaching a tipping point that could lead to irreversible damage to ecosystems and our societies. In parallel, intermediary cities in developing countries are transforming. Many are rapidly expanding, sometimes outpacing the capacity of governments to reduce vulnerability to climate shocks, invest in low-carbon infrastructure and establish plans, mechanisms and institutions that limit climate-risks and GHG emissions. If adequate actions take place now, many of these small and medium-sized cities can experience a green transition by design, i.e. they can be planned and organised to grow in a sustainable way that avoids the “grow now, clean later” strategy followed by many larger cities.

Yet intermediary cities – defined in this report as those with 50 000 to 1 million inhabitants – are often overlooked in national, regional and urban development policies. Given the urgency of the climate challenge, they deserve increased attention. First, these cites encompass a large share of the urban population most at risk from a changing climate. Cities with fewer than 1 million inhabitants accounted for 58% of the urban population in less developed regions in 2020, and will still account for 53% by 2035. Second, these cities generally play an intermediation role linking rural and metropolitan areas, which allows them to contribute to development efforts at the regional and national levels, including efforts to build climate resilience. Third, rapid urbanisation is hindering the capacity of authorities in intermediary cities to provide public services and an environment safe from increasingly frequent extreme climate events.

This report studies the complex relationship between intermediary cities and climate change. It uses multiple datasets to better understand how climate change affects intermediary cities, and how these cities are contributing to GHG emissions (Chapter 2). The report also explores how climate shocks that affect rural areas can indirectly affect intermediary cities due to the disruption of food systems and rural-to-urban migration (Chapter 3). Understanding these interactions is fundamental for more effective policies. Yet little is known about the strategies of intermediary cities in developing countries for coping with climate change. The report aims to address this gap by analysing climate strategies across intermediary cities in Africa, Asia and Latin America, and by identifying factors that led to the implementation of these polices as well as major challenges (Chapter 4). The report recognises that without adequate financing mechanisms, the policies necessary for addressing climate change across intermediary cities can end up being a set of green good intentions. For this reason, it analyses the mechanisms that can help to boost the financial resources for climate action across intermediary cities, as well as showcasing key areas for reform (Chapter 5).

Overall, this study shows that there is no single narrative regarding the way in which climate change affects intermediary cities in developing countries. Certain climate shocks have a greater effect on intermediary cities than on larger cities, and vice versa. For instance, based on the sample of cities analysed, 63% of the built-up area in intermediary cities with a population of 50 000 to 100 000 inhabitants in 2015 was potentially exposed to riverine flooding. In contrast, in cities with more than 1 million inhabitants, the share was lower, at 38%. In the case of heat waves, a different pattern emerges. Overall, heat waves have a negative effect on gross domestic product (GDP) in the sample of cities studied. However, these effects increase with city size, i.e. extreme heat events have a greater effect on the GDP of larger cities. This is particularly the case of cities in cooler climates.

As the urbanisation of intermediary cities continues, and their economies transform accordingly, their emission levels will increase, too. Not surprisingly, big cities produce most of the urban CO2 emissions in developing countries. In 2015, cities of more than 1 million inhabitants produced almost five times more CO2 than the average amount produced by cities with 500 000 to 1 million inhabitants, 37 times more than cities of 100 000 to 500 000 people and 132 times more than cities of 50 000 to 100 000 people. However, this is not a static process. As intermediary cities grow, their contribution to GHG will increase, too.

The report analyses existing climate policy strategies for intermediary cities in Africa Asia, and Latin America. In many of the cities studied, entry points for climate action have included disaster risk management, the upgrading of informal settlements and territorial development. However, it is not an easy task to consolidate multiple development agendas and anchor climate policy in local strategies. For climate policy to survive political cycles, local champions who can develop local capacity and promote participatory processes are often required. Yet, as noted in this study, local authorities cannot address the complex challenges brought by climate change alone. National governments are key for developing coherent climate strategies and scaling up effective policies, while international organisations can help by piloting innovative climate actions and supporting peer learning processes.

Financing is a critical aspect of the climate agenda, yet the lower overall fiscal capacity of intermediary cities can limit their access to adequate finance. They may have limited ability to raise the fees and taxes required to provide needed revenue streams and debt service capacity. Improving the financial capacity of intermediary cities to implement climate policies requires addressing constraints on both the demand and the supply sides of finance markets. Another issue is neglect of intermediary cities in broader development policies, which can leave them with poor infrastructure and weak urban governance.

The report highlights key areas for advancing the climate agenda in intermediary cities:

  • Climate mitigation policy is still pending in many intermediary cities. Reducing GHG emissions can be perceived as an additional cost, both financially and politically. Yet the climate agenda overlaps with many critical development goals. Robust analytical tools, like systems thinking, can help to identify actions with strong mitigation potential that can also address other development priorities.

  • Spatial planning is a critical aspect for building climate resilience and avoiding carbon lock-in. This includes integrating infrastructure, housing and transport policies into spatial planning, while accounting for the needs of vulnerable populations in informal settlements. Timing is critical, however, since these interventions will be more effective at an early stage of development.

  • The underlying socio-economic conditions of urban populations must be addressed when considering the vulnerabilities of intermediary cities to climate change. This includes taking account of the linkages of intermediary cities with neighbouring towns and rural areas.

  • National authorities and development partners have a key role to play. This not only requires setting up multilevel governance co-ordination mechanisms within countries, but also establishing platforms that bring intermediary cities onto the international development agenda.

  • Accessing the climate finance market presents major difficulties for intermediary cities. To overcome these constraints, it is important that the supply and demand sides of the climate finance market be strengthened together, as strengthening financial institutions will be of limited use if cities do not have the fiscal space or capacity to utilise the available finance.

Intermediary cities have the potential to contribute to the reduction of global GHG emissions and to act as a laboratory for innovative solutions if they are endowed with adequate resources and targeted policies. However, the report argues, this calls for a shift in policy approaches.

Disclaimers

This work is published under the responsibility of the Secretary-General of the OECD and the Executive Director of UN-Habitat. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD, its Development Centre or UN-Habitat.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

Photo credits: © Cover design by Mélodie Ly Descours (OECD Development Centre) on the basis of images from Doggygraph, Rendyfrmn/Shutterstock.com.

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