Nick Reece is Lord Mayor of Melbourne, Australia, and co-chair-elect of C40, a global network of nearly 100 major cities working to address climate change. Claudio Castro is Mayor of Renca, Chile. Both are board members of the Global Covenant of Mayors for Climate & Energy.
When we talk about the green economy, we often think nationally: industrial strategies, renewable-energy targets, subsidies and rules for electrification. But much of the investment needed to deliver the green transition will be decided closer to home – in our cities.
City authorities determine where and how buildings are built and renovated, how public transport develops, how land is used, what municipalities buy and what gets built in terms of infrastructure.
These decisions have the power to go beyond cutting emissions and strengthening resilience. They create new opportunities for businesses and investors.
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A new analysis by C40 Cities and the Global Covenant of Mayors for Climate & Energy (GCoM) shows just how large these new markets could become.
Across 151 cities, annual spending on key green products could rise from $293 billion in 2025 to $2.78 trillion by 2050, as cities implement the climate commitments they have made. That figure would place them among the world’s five most valuable companies by market capitalisation.
Reliable source of rising demand
The supply of these green products will need to increase dramatically to meet booming demand. With Smart City Expo in Barcelona, Spain, and COP31 in Antalya, Türkiye, on the horizon, these projections highlight an unprecedented investment opportunity that decision-makers cannot afford to ignore.
Beyond the global headline figure, it represents millions of local decisions and investments and, crucially, a growing source of market certainty. The analysis shows that fulfilling existing city climate plans could drive demand for key green products to eight times current levels by 2050, creating a reliable pipeline for businesses and investors.
Because these markets are shaped locally, the same national policies can produce very different outcomes from one city to another. But cities determine how quickly markets take off through planning, permitting, procurement, infrastructure and the targets they set.
Over the past decade, GCoM has brought together more than 14,000 cities and local governments across 150 countries under the premise that tackling the climate and energy crises head-on requires municipalities of all shapes and sizes to act – alongside their national governments.
And we have seen firsthand how local climate action can create new investment opportunities. Renca and Melbourne offer two very different examples of this dynamic in practice.
Greener future for city living
Melbourne is creating a pipeline of green investment across the city. In its 2025-2026 budget, Melbourne committed approximately $31 million to new parks, streetscape improvements and thousands of trees, while planning to electrify 11 municipal sites, including Melbourne Town Hall, and move its buildings towards 100% renewable electricity. Its 4-km Greenline project is also delivering promenades, parks, native planting and environmental renewal along the Yarra River – Birrarung. Together, these investments are creating demand across construction, clean energy, urban design and other green industries.
In Renca, climate investment is tackling local challenges while bringing public and private partners together. Between 2018 and 2025, about $7.6 million in public and private investment funded a reforestation effort that has planted more than 85,000 trees in the Renca Hills Metropolitan Park. An assessment supported by the Development Bank of Latin America and the Caribbean (CAF) now puts a number on what that investment returns: once the park matures, around 2035, its ecosystem services could be worth about $8.9 million a year.
A Water Master Plan, designed to reuse treated industrial water, will help sustain it. Renca has also attracted clean-energy investment through a 1.6-MW solar plant at a site run by manufacturer Tehmco. The project, which involved cooperation with the Japanese city of Toyama, includes more than 3,400 panels and expected annual emissions savings of about 1,000 tonnes of CO2.
Stepping up to meet cities’ climate needs
For us, as mayors, the lesson is clear: climate resilience is also economic resilience.
This is why the message ahead of COP31 should be straightforward: the world does not need a new market for climate action. It is already emerging in cities across the globe. What we need now is the push to take it to scale and turn local demand into a global investment boom.
COP31 has made implementation central to its Global Climate Action Agenda, with targets including raising the share of final energy demand met by electricity to 35% by 2035 and reducing building energy-consumption intensity by at least 25%. It has also highlighted green industrialisation, circularity and resilient cities.
Comment: Why the transition beyond fossil fuels depends on cities and collective action
These are ambitious targets and delivering them will require investment at a scale that matches the ambition. Cities are already putting projects into motion. The task now is to ensure that national policies and global finance scale up supply to meet demand.
But governments and global institutions cannot do this alone. The private sector must respond, too. The $2.78-trillion opportunity will be built on thousands of local climate and energy projects, like those in Melbourne and Renca. Companies need to look to cities as a source of long-term demand, while markets need products that can reach smaller projects and businesses, not only mega-infrastructure.
As members of C40 and GCoM, we strongly believe city and business leaders must work together to scale solutions faster. We need predictable, affordable finance and the capacity to turn local priorities into investment-ready projects. COP31’s Climate Implementation Bridge can help connect national commitments with these city-level investment pipelines and place local governments where they belong: at the centre of implementation and investment.
The businesses best positioned for the next decade will be those that see local governments not simply as stewards for climate solution deployment, but as the markets driving growth at speed and scale – from villages and towns to cities and metropolises. The opportunity is already there. Now we need to invest in it.
The post From Australia to Chile, our cities are driving a green investment boom appeared first on Climate Home News.
From Australia to Chile, our cities are driving a green investment boom
In the thick of the COP29 climate summit in Azerbaijan in 2024, the UN climate talks were rattled by what can only be described as a major PR disaster. The BBC, Reuters and The Guardian all carried headlines, attributed to leading climate policy experts, that the COPs were “no longer fit for purpose”.
The articles outlined a series of reforms called for in an open letter signed by 22 eminent scientists and politicians, including a former UN secretary-general and previous UN climate chief, with a further 150 lending their support. The headlines shook confidence in the COP process, just as governments were wrestling over a new climate finance goal.
The Club of Rome – which handled the media relations for the letter – hurried to say that its “constructive, supportive ideas” had been “misinterpreted”. Negotiators kept calm(ish) and carried on, in the end landing the finance goal after some high-stakes drama on the final day.
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To my surprise, when I went back this week to read the letter again, I could not find the offending line about the COPs not being fit for purpose. The Club of Rome has yet to respond to my query about its disappearance.
Whatever happened to the wording, that sentiment has been widely shared. COPs have ballooned in size while the importance of their outcomes seems to have diminished since the 2015 Paris Agreement (with the exception of the 2023 COP in Dubai where countries agreed to transition away from fossil fuels in energy systems).
The same on the surface
Two years on from those painful headlines in Baku, has anything changed for the better? You might be forgiven for thinking not. Official decisions are still made by consensus rather than the majority voting some have called for to stop blockers.
Tens of thousands of officials, activists and business execs still scurry around the halls to an ever-growing list of side events, roundtables and dialogues, while deals still come down to rows, all-nighters and jargon-filled texts adopted to rounds of applause.
But it would not be true to say that COPs have completely failed to respond to the very real need to translate the words of the Paris Agreement into action in the outside world.
Global warming is projected to be around 1.3C lower this century than it would have been if the world had not committed to tackle the climate crisis under that accord. Developing countries have a valued space at COPs in which their voices have equal weight in decision-making, unlike in many other international fora. And most importantly, perhaps, there has been a subtle shift, tipping the balance away from negotiating towards doing.
Brazil branded last year’s summit in Belém as the “COP of Implementation”, corralling the sprawling Action Agenda into six axes. This was a bid to impose some structure on the mushrooming efforts between governments, UN agencies, cities, businesses and civil society to set targets and spur faster results on their pet issues, from methane emissions to health and adaptation in conflict zones. COP30 alone saw the launch of 120 “plans to accelerate solutions”.
COP30 roadmaps off the cuff
Meanwhile, as the formal negotiations drew to a close, it was clear that consensus decision-making was evolving into something a little more improvised.
With only around half of all countries on board with the idea of a roadmap to transition away from fossil fuels, COP30 President André Corrêa do Lago announced his team would put one together over the coming year, along with another on how to meet a global goal to halt deforestation by 2030. Those roadmaps will be launched next week, presented and discussed at COP31, though it’s still unclear whether or how they’ll be incorporated into the formal negotiating agenda.
Some leading policy-makers don’t think that matters too much. Speaking to journalists before the Antalya summit, COP30 CEO Ana Toni and Dutch climate minister Stientje van Veldhoven said “coalitions of the willing” can move ahead without needing consensus from the COPs. This, they said, was evident this year at the first global conference on TAFF, co-chaired by van Veldhoven and attended by 60 countries.
“Consensus or no-consensus in the general COP doesn’t make a difference for the choices I have to make in my country to get my country to phase out fossil fuels,” said the Dutch minister. The Netherlands recently became one of the first to publish a national TAFF plan.
COP31 banks on flagship voluntary initiatives
This thinking has permeated the management and expected outcomes of this year’s COP too. Earlier this year, Türkiye, supported by international energy agencies, floated the idea of a voluntary goal to boost electrification to 35% of the world’s final energy consumption by 2035 – and this is now being touted as one of the main results to be expected from Antalya.
Türkiye is also championing a pledge on AI and climate, while co-host Australia is pushing to ease access to climate finance for least developed countries and small island states.
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None of these needs consensus. But with a political cover decision already in the works, as trailed by the COP presidents, they – and perhaps the fossil fuel roadmap – may find a home in the official text if language acceptable to most can be found, giving them them additional weight.
UNFCCC reform process in the shadows
Formal reform is underway too, if quietly. UN climate chief Simon Stiell is leading a review informed by ongoing consultations with a group of 15 well-respected climate policy experts, three of whom signed the open letter in 2024.
Among them is leading Swedish climate and sustainability scientist Johan Rockström who has strong ideas about how to make COPs function better, including a switch to majority voting. He told the same press briefing nothing stands in the way of this, because the rules of procedure for making decisions at COPs have never been formally agreed.
Still, to get away from the default setting of consensus would require agreement on a new system that may be impossible to achieve given the rise in bullying tactics by fossil fuel heavyweights.
Comment: The UN climate process was built for negotiation – now it must support implementation
The deliberations with the high-level policy gurus, as reflected in a summary of June’s session in Bonn, largely echo what’s already happening organically, calling for stronger partnerships and accountability both in and between the Action Agenda and negotiations. It doesn’t mention voting.
A general overview of the reform exercise says that “improving and optimizing the [UN climate] process over the medium to long term… will be critical to fostering trust, enhancing collaboration, and catalyzing increased ambition”.
In the short term, don’t hold your breath for anything concrete on reform at COP31 but watch for signs in what ends up dominating the headlines from Türkiye.
The post Editor’s Desk: COP reform is happening quietly, behind the headlines appeared first on Climate Home News.
Editor’s Desk: COP reform is happening quietly, behind the headlines
With the COP31 climate summit in Turkey looming, all eyes are on China to see what the country will push for in the negotiations.
At COP30 last year, China helped to secure a “dialogue” on climate-related “unilateral trade measures”, as well as a two-year “work programme” concerning climate finance.
The nation also championed south-south cooperation throughout the conference and co-led a summit on methane, alongside Brazil and the UK.
In a recent press conference, China’s environment vice-minister Li Gao noted the need to “uphold multilateralism” and send a “clear political signal” that the global community is united around climate action.