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Ahead of a sustainable urban development conference next week in Ecuador, the World Bank warned that climate change may push up to 77mn urban residents into poverty worldwide by 2030 if cities don't make significant investments.
The report by the World Bank and the Global Facility for Disaster Reduction and Recovery, Investing in Urban Resilience: Protecting and Promoting Development in a Changing World, says 1bn people, or one in seven, currently live on less than US$1.25 a day.
The Washington, DC-based multilateral recommends that governments invest in projects to protect cities against rises in sea level and other impacts of climate change. It says significant financing is needed to make cities more resilient against climate change, as the global need for urban infrastructure amounts to between US$4.5n and US$5.4tn per year.
The report added that global average annual losses stemming from tropical cyclones, earthquakes, tsunamis and floods may increase to US$415bn by 2030 from the current figure of US$314bn.
In a previous report, the WB said Latin America and the Caribbean is vulnerable to these natural disasters, but praised some of the region's innovative climate policies, including green growth strategies and carbon tax on fossil fuels in Mexico and sustainable forest management in Brazil.
The WB, nevertheless, has itself been criticized by development charity Christian Aid for providing more financing for fossil fuel exploration than for clean energy.
Earlier in the month, the WB along with United Nations announced a public-private partnership with insurance sector leaders to adopt a risk management strategy that uses insurance to promote resilience to climate hazards and disasters.
The Insurance Development Forum (IDF) will contribute to achieving the G7 'InsuResilience' target of providing 400mn people in developing countries with increased access to direct or indirect insurance coverage against the impacts of climate change and related natural catastrophes by 2020.
The Third UN Conference on Housing and Sustainable Urban Development (Habitat III) will be held in Quito on October 17-20.