On February 20, 2025, Cidades pelo Clima hosted a plenary session dedicated to Climate Action Financing. The event, held online from 2:30 PM to 4:30 PM, was led by João Fachada, who holds a Master’s degree in Economics from Nova School of Business and Economics.
The session aimed to explore financing sources and tools, enabling municipalities to identify the best options for implementing climate projects. It fostered a rich discussion on strategies and financing opportunities.
The need for climate financing
Cities account for 70% of greenhouse gas emissions in the EU and consume 65% of global energy. To meet the Paris Agreement goals and achieve carbon neutrality by 2050, annual investments between €175 billion and €290 billion will be required in the European Union, and €2.1 billion to €2.5 billion in Portugal.
Given the complexity of the climate transition, municipalities must combine multiple financing sources and tools, ensuring that projects are both economically sustainable and socially viable.
However, not all municipalities have the same starting conditions when it comes to accessing funding. Some are larger or better equipped with technical resources, while others lack specialized expertise. Additionally, different climate risks create distinct local challenges. This makes the sharing of best practices and inter-municipal cooperation essential to overcoming these disparities.
In this context, the session emphasized the importance of municipalities adopting diversified financing sources and tailored financial tools suited to their specific needs and capacities, requiring an innovative and integrated approach.
The discussion reinforced that effective financing depends on cities structuring solid projects that are attractive to investors and aligned with sustainability goals. Collaboration between municipalities, financial experts, and citizens will be key to accelerating climate action and building a more sustainable and resilient urban future.
