Funding greener and more just cities

20 March 2023

Three years of dealing with the impacts of Covid19, and more recently, the effects of a Russian war in Europe, have brought new complexity to urban governance. As such, making the most out of the options available for post-recovery spending, while ensuring a green and just pathway towards future sustainable urban development are currently at the top of city agendas.

With a focus on implementing the European Green Deal, the 5th Cities Forum, held in Turin, centred debates on the EU’s cohesion policy funds, as the most important investment tool into people and place. The forum also saw the launch of the European Urban Initiative, which boosts funding for cities and groups the instruments for urban areas together under one heading.

EU funding is essential for cities and their capacity to deliver EU objectives on the ground and has a central role in promoting innovation and tackling rising inequalities inside our cities. For example, without further support, many cities report they do not have the means to provide adequate housing and tackle rising urban poverty.

Cities at the forefront of managing crisis

Given the current context of high energy prices and inflation, even more pressure is being put on city budgets. In an exchange with European Commissioner Elisa Ferreira, responsible for cohesion and reforms, local leaders from Gdansk, Lodz, Turku, Brussels Capital Region, Bologna and Thessaloniki, expressed that this makes the cohesion funds even more important today. Moreover, they shared a hope that the mid-term review of the EU budget, expected later this year, will help bring even more focus on the current environment that cities are faced with.

Already, as demonstrated throughout the pandemic, cohesion funding has proven itself more agile and able to respond to crisis than might have been expected. For example, for many cities, access to the EU’s cohesion funds proved to be an invaluable lifeline throughout the pandemic.

Additionally, the door was opened to reuse existing funding via the European Social Fund and European Regional Development Fund, which fall under the cohesion remit, in a more flexible way, to support Ukrainian refugees.

Yet, to tackle the huge challenges ahead, EU funding is only part of the solution. “We need national support to develop tools and funding schemes that will help us deliver a just, green and digital transition. This is why it is so important for cities to be part of the debate on the future of economic governance,” commented Anna Lisa Boni, Deputy Mayor of Bologna during the mayors’ debate.

To this extent, Boni further mentioned that, “we must ensure the new EU budget rules consider the needs of local authorities, and promote adequate fiscal decentralisation and public investments at the local level.”

From a city point of view, this is a crucial means to finance the just transition, and to invest in the administrative capacity of municipalities across Europe, as partly outlined in a recent position paper from Eurocities.

For her part, Commissioner Ferreira said in her opening speech that in each crisis, “cities have been Europe’s spearhead, at the forefront of the action, as providers of public services, from hospitals for those suffering from Covid, to welcome centres for refugees.” And, in the mayors’ roundtable she pointed to the need for large urban areas to continue to work closely with smaller cities and their surrounding rural areas.

At the same time, Boni pointed out that we need to make sure EU funds available for cities are properly distributed and implemented respecting the principles of multi-level governance. Across Europe we are witnessing a centralisation trend regards funding, with the EU recovery plan being one recent case, and as signalled by the experience of many cities implementing cohesion funds.

Shaping up for future demands

The Cities Forum also put a spotlight on other recent developments regards initiatives for cities to help them reach international goals, such as those outlined by the European Green Deal, including the 100 climate neutral and smart cities mission. In fact, there is an increasingly rich offer available for cities to pick and choose from, and one of the challenges for urban practitioners is to find ways to build stronger connections between the New European Bauhaus, Living in EU, Green City Accord, the Covenant, Civitas – and more.

With this in mind, Minna Arve, Mayor of Turku, noted the concrete actions taken by the European Commission to create stronger synergies between EU initiatives for cities. “For example, connecting the Mission on climate neutral cities and the New European Bauhaus with the next cycle of cohesion funds is a very positive step that goes in the right direction.”

Dorthe Nielsen, Executive Director, Eurocities, spoke about how two tools, the European Urban Initiative and the Urban Agenda for the EU, can help deliver on these goals.

As a new instrument the European Urban Initiative can complement and add value to the work of cities, and of city networks like Eurocities, by identifying and testing innovative solutions that can help urban systems deal with current and future challenges.

“In our network, cities work together to share innovative solutions and to scale them up. But there is a need to do much more to respond to the challenges around climate change, social equity, digital transformation, and sustainable urban governance,” remarked Nielsen. Adding that, “the European urban Initiative will offer a great lift in this area”.

Nielsen also pointed to a desire to see a reinforced capacity in city administrations across Europe to tackle global challenges locally, which is another area where she suggests the EUI can add value.

The Urban Agenda is part of the EUI framework and focusses on collaboration across levels of government via partnerships on specific topics of concern to cities, such as migration and housing, and has shown some good results, including the launch of new partnerships last week on greening cities and sustainable tourism. Going forwards, Nielsen stated that she hopes the good practice of first finding out the needs directly from cities will inspire new partnerships.

On what specifically? “The built environment? Scaling up renovations and dealing with the impact of renovations? Energy production and storage. Green skills and wider future skills needs,” she mused. This list of current urban challenges is no doubt long, and cities will undoubtedly have to develop new competences in the coming years to deal with them, but with a partnership approach, between levels of government, and by working within their local innovation ecosystems and wider metropolitan areas, cities are getting in shape.

At the closing plenary Pascal Smet, State Secretary of the Brussels-Capital Region, highlighted that the debates about the green and just transition will continue in June at the Brussels Urban Summit.


Alex Godson Eurocities Writer