Foreword

The OECD Development Centre and UN-Habitat formed a strategic alliance in 2018 to investigate the role of intermediary cities in development. The first step was an expert meeting held in Paris comprising a diverse set of stakeholders including international organisations, local and national governments, and academics from around the world to discuss the main challenges and opportunities facing these cities. The meeting resulted in a set of strategic insights including the untapped transformational potential of these urban centres. Also identified were three interrelated gaps that systematically affect intermediary cities in developing countries: gaps in knowledge, policy and financing. It was agreed that these gaps are interrelated and should be addressed simultaneously. To do so, local governments, national authorities and development partners need to work together to develop coherent development strategies.

Cities Connect was created to respond to this call. The OECD Development Centre and UN-Habitat contribute to this initiative, which was funded thanks to the financial support of the Swedish International Development Agency (SIDA). This collaboration aims to advance a policy dialogue on intermediary cities and their transformative potential in the international arena.

To achieve this, the initiative supports both local and national authorities in sub-Saharan Africa, Southeast Asia and Latin America in addressing the main constraints faced by intermediary cities and provides guidance on how to leverage their potential for local and national development. Cities Connect elevates the profile of intermediary cities by providing a space for international policy dialogue, carrying out empirical analysis and drafting policy-oriented reports.

This is Cities Connect’s first report, developed by the OECD Development Centre and UN-Habitat. Building on the expertise and comparative advantages of both institutions, this report is the first attempt at an international level to analyse climate change and intermediary cities together.

Climate change and rapid urbanisation are increasingly recognised as two of the most daunting challenges faced by our generation. What is less known is that intermediary cities are at the forefront of both processes. These cities play a critical role in urbanisation dynamics as they are central to the flow of population, goods and services between urban and rural areas. As such they are pivotal to guiding the rural-urban continuum towards an innovative development model that is more inclusive, sustainable and resilient. In most developing countries, however, intermediary cities face systematic constraints that limit their climate adaptation and mitigation capacity. These constraints include lack of data, a persistent financing gap, weak governance and limited capacity. These constraints are exacerbated by the fact that intermediary cities are often overlooked in national and urban development strategies, as well as in international co-operation programmes.

This report provides evidence and policy guidance to help local and national authorities, as well as development partners, in designing more effective climate strategies. To this end, the report builds on innovative datasets and original empirical policy analysis to identify key areas for reform. It presents evidence on the different channels through which climate change affects intermediary cities in developing countries and on how these cities contribute to greenhouse gas emissions. It also describes how intermediary cities in Asia, Africa and Latin America are currently coping with climate change, and provides guidance on how such cities can reduce the financing gap hindering climate action.

Intermediary cities present an unprecedented opportunity for improving climate resilience and reducing emissions across developing countries. These cities can be climate-proofed as they develop and avoid a “grow now, clean later” path, which ultimately costs more financially, socially and politically. However, since many intermediary cities are urbanising very quickly, the window of opportunity is narrow.