The manager of a $40 billion fund views city growth and climate change as twin threats.

• According to the World Bank, the number of city dwellers is predicted to double by 2050.
• An influx of city dwellers necessitates the addition of an entire New York City to the world every month for 40 years, marking the largest wave of building growth in human history.
• The global effort to reduce carbon emissions presents a significant investment opportunity, according to Sadek Wahba, founder and chairman of I Squared Capital, a company managing $40 billion in global infrastructure investments.

The upcoming decades are crucial for humanity to address climate change, while also witnessing a significant increase in construction and urbanization as populations shift to cities.

I Squared Capital founder and chairman Sadek Wahba says that the intersection of two major global trends presents numerous climate challenges and also offers significant investment opportunities.

Wahba stated in a May video interview with CNBC that the future lies in investing in infrastructure and climate-related technology.

According to the World Bank, currently, 56% of the global population, which is approximately 4.4 billion people, reside in cities. By 2050, the population of city dwellers is predicted to double, resulting in around 70% of the global population living in cities, says the World Bank.

According to Wahba, the largest increase in urbanization will occur in India, particularly in Asia.

To accommodate the movement of people, cities need to be built bigger and bigger. These cities are made of concrete and steel. They require air conditioning, heating, electricity, and a broadband connection. They also need cybersecurity. All of these things are necessary. Transport is also required.

"The construction of such infrastructure has a significant effect on the climate."

By 2060, Architecture 2030 predicts that 2.6 trillion square feet of new floor area will be added to buildings worldwide, which is equivalent to adding an entire New York City's worth of buildings every month for 40 years, representing the largest wave of building growth in human history.

With this significant expansion, various decarbonization obstacles will emerge.

The number of electric vehicle sales has been steadily increasing over the past ten years, as stated by the IEA. Unlike traditional vehicles, EVs do not rely on gasoline, a non-renewable resource that contributes to climate change.

Wahba informed CNBC that although they must travel on roads, these roads are constructed from bitumen, a product derived from oil.

"If we construct cities, we may have electric vehicles that do not emit pollutants, but the roads made from oil derivatives, which are inherently polluting, will still be present."

The mining, transportation, and processing of lithium for electric vehicle batteries present infrastructure and climate challenges at each stage.

"Have we considered the transportation of lithium through ports, containerships, bulk ships that use diesel, and then in trucks that use diesel for processing?"

As urbanization increases, it will be necessary to develop clean and affordable solutions to decarbonize. However, developing countries with high levels of food insecurity and hunger may not be able to afford more expensive climate-friendly solutions, according to Wahba.

That will require technological innovation.

Wahba believes that accelerating the pace of innovation requires political and cultural will.

My aunt is a vaccinologist at NIH and has been working in the field for 40 years. She stated that it would take at least two years on the fastest track to develop a vaccine. However, it took only nine months due to the full resources and attention of all of our top scientists being dedicated to the project.

Combating climate change requires a collective effort and money.

Wahba, a member of President Biden's National Infrastructure Advisory Council, commended the Biden administration for its investment in climate solutions. He believes that the administration's climate efforts have been "honestly under appreciated." Wahba stated that the money allocated towards climate mitigation efforts is "fundamentally transformative" for the economy.

He stated that the federal government is not allocating enough funds towards research and development, and investors are underestimating the potential market opportunity.

In 2022, global investment in energy transition technologies hit a record $1.3 trillion. However, annual investments need to increase fourfold to over $5 trillion if the world wants to stay on track to minimize global warming to 1.5 degrees Celsius, as stated in a March report from the International Renewable Energy Agency, a global intergovernmental agency for energy transformation.

"Wahba stated to CNBC that there are extremely appealing returns, and it's not just about generating wind and solar power. Entire cities will need to be reimagined and restructured using technology."

While some climate investments carry significant risks, such as investing in fusion which could result in either immense wealth or total loss, there are also safer options with promising returns for investors.

"Wahba states that the technology that enables charging, supplying electricity to homes, and selling it back to the grid exists. This technology has the potential to increase four times."