As Europe races to meet its climate targets, cities are taking on a critical role in leading the way. This year, the Eurocities Environment Forum will gather urban leaders, policymakers, and academics to discuss “A European urban deal for climate and environmental justice: planning with and for citizens.” The conversation will kickstart with Sigrid Stagl’s keynote speech, Professor of Environmental Economics and Policy and Founder of the Institute for Ecological Economics at the Vienna University of Economics and Business. Her message is clear: effective climate action requires a fundamental shift in how we understand the economy, with cities at the forefront, empowering citizens along the way.
The foundations of ecological economics
Professor Stagl’s field, ecological economics, rethinks traditional economic models by viewing the economy as part of both society and the natural world it relies on. Unlike conventional economics, which often considers environmental issues as external factors, ecological economics assumes that all economic analysis must inherently account for environmental impact. “All economic analysis requires taking account of environmental impact,” Professor Stagl explains, stressing that “dealing with environmental impact as an economist is not some sort of specialisation,” but a foundational approach to understanding economic activities. “All economic analysis requires accounting for biophysical impact,” she adds.
This shift necessitates interdisciplinary collaboration. Economists alone cannot tackle the complex questions of our time, she argues, because addressing climate change requires insights from all sorts of disciplines, such as environmental science, sociology, engineering, public health, etc. “We need to collaborate with natural scientists and other social scientists systematically,” says Stagl, to fully understand and address the physical and environmental effects—like pollution, resource depletion, and ecosystem changes—caused by economic activities.
All economic analysis requires taking account of environmental impact.
Participatory climate action
In her work, Stagl has witnessed the significance of citizen participation in the climate transition. In her 15 years of experience, she has come to realise that citizen involvement is transformative. “When citizens are enabled, given the opportunity to ask questions, and the space to exchange ideas, it is amazing how productive and constructive they become, how much they want to be part of the solution,” she notes. Cities hold a unique position to foster this engagement.
Her research team conducted a study on the social acceptance of 27 climate and energy measures, surveying both 1,500 respondents from a cross-section of the Austrian population at national level and a representative group of the Austrian population that was part of the Climate Advisory Council to Vienna’s municipality. The results showed that the second group was significantly more supportive of climate measures than the first, “not because these were specifically selected people,” stresses Stagl. “But because they had, over the years, participated in forums were issues around climate and energy were discussed. They had the opportunity to learn about the challenges and the possibilities of how to address them.”
Acceptance is higher for those who have an opportunity to participate.
This finding underscores the powerful role that local governments and cities can play in creating spaces for civic engagement. “Acceptance is higher for those who have an opportunity to participate,” she explains, adding that these engaged citizens often act as “multipliers,” spreading awareness and encouraging others in their communities to support necessary climate policies.
Why cities are key to the climate transition
Stagl sees cities as uniquely positioned to lead in the climate crisis. “Many cities are the avant-garde of the transition. They hold a lot of potential for leading the way in the climate transition,” says Stagl. Urban areas are often the first to feel the direct impacts of climate change, from extreme weather phenomenon to pollution and waste management challenges. They also house concentrated populations and infrastructure, making them prime locations for piloting new solutions and policies. Many cities are already stepping up as pioneers of change, a trend that will be showcased at the Eurocities Environment Forum inspiring others to be at the forefront of the climate transition.
However, local action alone is insufficient. Professor Stagl highlights the importance of an EU-level framework that allows smaller economies to implement impactful policies without sacrificing competitiveness. “Especially for smaller economies, it’s difficult to take steps that could hurt the competitiveness of economic actors without coordination with major trading partners,” she notes. As the main economic area, the EU’s involvement, is crucial in ensuring that efforts at the city level are bolstered by a cohesive regional strategy and a more systemic perspective.
Many cities are the avant-garde of the transition. They hold a lot of potential for leading the way in the climate transition.
Expanding the focus beyond climate
While climate change is often the environmental issue that dominates media coverage, Professor Stagl argues that it’s essential to adopt a broader perspective. Addressing the climate crisis alone overlooks critical interrelated issues such as biodiversity loss, biogeochemical cycles, water and land use, etc. “We need to expand our lens,” she says, “to account for all these other really important dimensions.” Balancing these priorities, however, is no easy task. It requires a comprehensive approach that acknowledges the interconnectedness of ecosystems and the economy. “It’s difficult, but it’s necessary,” insists Stagl.
The dual challenge of mitigation and adaptation also complicates the picture. While reducing greenhouse gas emissions is essential, cities and regions must simultaneously prepare for the impacts that are already inevitable. It “requires funnelling funds into both directions,” says Stagl.
Until recently, climate mitigation has monopolised the discourse on the climate crises. Though slowly changing, the landscape of climate adaptation across European cities is characterised by the lack of a more clearly defined adaptation goal at the EU and member states level, the need for an improved system of multilevel governance, and the generalised lack of access to financing. For example, according to the UNEP Adaptation Gap Report, the annual finance gap for adaptation sways between USD 194 billion and USD 366 billion, while in comparison, 91% of tracked climate finance goes toward mitigation efforts.
Stagl stresses that only a multi-faceted approach can provide the depth and flexibility required to address both current and future environmental challenges.
Rethinking growth
Professor Stagl also advocates for a shift in how decision makers account for costs, calling for a “true cost accounting.” Traditional economic models often ignore social and environmental costs, leading to unsustainable practices. “If we work towards including all the implications of our economic activities, we will have a fairer, more sustainable, and in the long run, more economically successful way of undertaking activities,” she explains.
Incorporating all costs into economic planning would prevent exploitative practices and set a standard of sustainability that is “generalisable,” meaning it could be implemented worldwide without causing harm to other regions or creating exploitative models. This principle aligns with her call “to do economic activities as if there was a tomorrow.”—with today’s actions taken in full awareness of their future impact. True cost accounting may sound simple, but it presents a profound challenge to the status quo, particularly in economies where growth is assumed to be essential.
If we work towards including all the implications of our economic activities, we will have a fairer, more sustainable, and in the long run, more economically successful way of undertaking activities.
Growth isn’t always the answer
Recently there’s growing openness within economists to the idea that growth may not always be possible—or even desirable. Stagl notes that new integrated assessment models are emerging that accommodate both pro-growth and no-growth scenarios, offering policymakers a more flexible tool for understanding economic and environmental dynamics.
“This is challenging,” she acknowledges, “because institutions such as the labour market, the pension system, the Social Security systems, have growth at their core, but it doesn’t help to define the problem away.” By creating models that allow for pro-growth and no-growth scenarios, economists can offer more nuanced policy advice. Rather than relying on growth as the default answer, they can tailor strategies to the unique demands of different environmental and economic contexts.
Cities and citizens as catalysts of change
Professor Stagl’s insights offer a powerful vision for the future of climate action—one in which cities take the lead in creating participatory spaces for citizens, building resilience to the interconnected challenges of climate change, and setting new standards of sustainability through true cost accounting. The Eurocities Environment Forum will serve as a platform for urban leaders to discuss these ideas and share their challenges and strategies to implement solutions.
As Professor Stagl’s work demonstrates, the transition to a sustainable future is complex but achievable. It requires not only a change in policy but a shift in mindset—towards an economy that serves people and the planet, values resilience over unchecked growth, and is accountable for all of its impacts. With cities and citizens at the helm, Europe has the potential to pioneer this essential transformation and set an example for the world.
–
Follow the Eurocities Environment Forum plenary live on Thursday 14 from 9. Stay tuned for more stories and outputs from the event.
If your city is not a member yet, become one.
