13. Governing Urban Infrastructure in Developing Cities: The Role of Carbon Finance

One of the key issues in the post-Kyoto climate regime is to reach consensus on how to finance actions needed in fast-growing economies that will enable altering their business-as-usual emission pathways. Specifically, cities in developing countries will play a significant role in climate mitigation and adaption given their contribution to greenhouse gas emissions and inherent vulnerability to induced global change (e.g., sea-level rise, increased water scarcity and drought, forced migration, etc.). Changing their pathways and increasing climate resilience in these countries requires significant incremental investments in urban infrastructures today. However, financial and institutional capacities are much lower as compared to the developed world. International financial and technology transfer are bound to bridge the gap under a well-designed institutional framework. This chapter discusses different climate finance mechanisms, possible improvement and instrumentalization in light of enhancing urban infrastructure governance in developing cities, in conjunction with their policy relevance, implementability, and economic and environmental effectiveness. Also, we posit institutional implications for using carbon finance to facilitate the development of climate-resilient urban infrastructure in fast-growing cities in developing countries.