Home to 80% of EU citizens and 70% of greenhouse gas emissions, urban areas play a key role in fighting climate change; but cities' access to funding for green policies is proving a major stumbling block.


The EU does not have direct competence in urban affairs, but its cohesion policies and sectoral policies in the areas of transport, environment and social affairs, for example, can have a significant impact on cities and their capacity to deal with these challenges.

The European Commission launched a 'Thematic Strategy on the Urban Environment' in January 2006 to underline the importance of cities in both adapting to climate change and mitigating greenhouse gas emissions. The policy was one of seven thematic strategies in the Commission's 6th Environmental Action Programme (6th EAP) and called for action in four priority areas: urban management, sustainable transport, construction and urban design.

On 24 May 2007, ministers responsible for urban and spatial development signed the Leipzig Charter on Sustainable European Cities (EurActiv 24/05/07), laying the foundations for an integrated urban development policy.

Moreover, the EU's legally binding objective of slashing greenhouse-gas emissions and boosting renewable energies by 20% by 2020 have sprouted legislation whose successful implementation hinges partially on cities.

In December 2008, EU lawmakers agreed on an ambitious energy and climate change package to deliver the bloc's 2020 climate targets. It is also currently reviewing the Energy Performance of Buildings Directive, as well as the Energy Labelling Directive, as part of its Second Strategic Energy Review (EurActiv 14/10/08).

On 10 February 2009, over 350 European cities committed to becoming frontrunners in the EU's fight against climate change by signing the Covenant of Mayors, pledging to exceed the Union's climate targets for 2020 (EurActiv 11/02/09).


Climate change

The Intergovernmental Panel on Climate Change (IPCC) has established that global warming must be kept below 2°C to avoid catastrophic and irreversible consequences for the planet. The target was endorsed by EU heads of state and government in March 2007 (EurActiv 13/03/07).

The EU acknowledges that cities, which consume a disproportionate share of natural resources, are key to solving global climate problems. They are uniquely placed to implement effective climate policies as they have the capacity to plan and are in charge of key elements of environmental infrastructure, including transport, water, energy and waste. Moreover, they own a large number of public buildings, where energy-efficiency measures can make a real difference.

Moreover, city councils are the closest to the citizen that public administration gets. They therefore have the best chance of steering consumer behaviour towards less wasteful energy use and raising public awareness of energy efficiency measures.

The world is urbanising at a fast pace. According to the UN, only 29% of its population lived in cities in 1950, but the figure presently stands at around 50% and is predicted to rise to 70% by 2050.

Matthew E. Kahn, a professor at UCLA's Institute of the Environment (University of California, Los Angeles), argues that urbanisation contributes to climate change because city dwellers with larger incomes than the rural population opt for private cars instead of public transport. On the other hand, cities are "hotbeds of innovation", meaning that urban nations are more likely to develop green technologies such as hybrid vehicles, reducing greenhouse gas emissions per dollar of national income, Kahn says.

London taking the lead

Cities have been slow to take action, though, but they are now starting to rise up to their responsibilities. The Greater London Authority announced in early 2005 that it was developing the first climate adaptation strategy for a world city.

"London is already feeling the effects of climate change. Sea-level rise relative to the land is now widely accepted as occurring at 6mm/year at high tide in the London area. A significant proportion of future development will be in East London, which could be increasingly at risk from tidal flooding. Preventative and adaptive measures will therefore be needed, including the construction of appropriate flood defences in new developments," it argued.

Most recently, mayors from over 350 European cities united in a pledge to reduce their CO2 emissions by more than the EU's 20% target (EurActiv 11/02/09). They plan to achieve this by producing sustainable energy action plans and reporting on progress in order to share best practices.

Energy-efficient building

One of the cornerstones of greener cities is reducing their energy consumption, as buildings represent over 40% of the EU's total energy consumption. The Commission acknowledges in its draft recast Energy Performance of Buildings Directive that buildings are a key matter of competence for local authorities and crucial to meeting climate objectives at the lowest cost to society (see EurActiv LinksDossier on 'Green Buildings').

The public sector's position as a frontrunner in energy-efficiency standards for buildings is promoted both by the EU and the most environment-conscious cities. If adopted, the EU law would oblige authorities to display energy performance certificates in public buildings in a visible place. The Commission believes extending existing legislation can generate energy savings of 5–6% in the EU by 2020 (EurActiv 14/11/08).

Many cities have started to explore ways to control energy waste from their buildings. Berlin, for example, has a pioneering programme whereby public retrofitting tenders include a requirement for average CO2 reductions of 26%. So far, 1,400 buildings have been upgraded, saving the city 60,400 tonnes of carbon every year.

Decentralised energy

Local energy production is another area where cities could make a real contribution to the fight against climate change. A significant amount of the energy generated in large centralised power plants gets lost when transported over long distances, and the most innovative cities are now exploring ways of producing energy where it is consumed.

Since the endorsement of new EU renewables leglislation in December 2008, which set down rules for the bloc to reach a 20% share of renewable energies by 2020, 'microgeneration' has become a serious option (see EurActiv LinksDossier on 'Microgeneration').

Microgeneration refers to an array of small and medium-sized generators of electricity, including solar, wind, hydro, biomass and waste. Combined heat and power (CHP) or cogeneration facilities, which feed the heat produced during electricity generation either directly into homes or into a local district heat and power network, are also included.

The technology would practically allow buildings to function as small-scale power stations, where solar panels mounted on roofs can produce energy, not only for the buildings themselves but also to feed energy into a local electricity grid.

France is currently preparing new environmental legislation, which would among other things allow individuals to install renewable energy microgeneration devices in their homes (EurActiv 08/01/09).

London Mayor Boris Johnson, on the other hand, announced a series of measures in November 2008 to make the city greener, including an "unprecedented ramp-up in investment in decentralised energy," which is set to deliver 25% of the city's energy locally by 2025.


Innovative technologies are also being developed to manage waste by turning it into energy. The EU's new framework directive promotes the use of waste as a secondary resource and introduced EU-wide recycling targets (EurActiv 21/10/08).

Some companies are now developing innovative technologies to produce renewable energy from household waste, which would power cities while reducing their landfill waste and emissions and increasing recycling.

Finnish energy company St1, a major producer of bioethanol, is building a pioneer plant in 2009, using waste from households and shops to produce transport fuel as well as heating and electricity for community needs. In the future, it plans to construct plants that can use industrial packaging and straw as raw material.

In the UK, renewable energy business New Earth Energy and waste management company Biossence are developing facilities in the North West of England to produce energy from municipal and commercial waste. 

Gothenburg in Sweden has cut its CO2 emissions from energy consumption by 25% by generating energy from waste. The city carries only a small fraction of total waste to landfills as its integrated waste system collects, sorts and burns rubbish, producing energy for heating and electricity through incineration.

Greener transport

Road traffic in urban areas is the biggest single source of CO2 emissions in the EU. With 4.3 million extra cars taking to Europe's roads each year, CO2 releases from transport could be 40% higher in 2010 than in 1990 (see EurActiv LinksDossier on 'Urban Transport').

London has been pioneering a congestion charge on vehicles entering Central London during peak hours. According to the authorities, since the introduction of the policy in 2003, 70,000 fewer cars enter the charging zone every day. At the same time, the volume of passengers travelling by bus has risen by 6% during charging hours.

Clean fuels and hybrid technologies for city buses, rubbish collectors and other public vehicles can provide further emission reductions. The EU has agreed on a clean vehicle procurement plan, requiring public authorities to include environmental criteria when acquiring vehicles, including life-cycle costs for fuel consumption, CO2 and other pollutant emissions as of 2010 (EurActiv 23/10/08).

Pooling procurement capacity is a cost-efficient way of supporting greener transport. Hamburg, for example, is teaming up with other cities to support the development of hydrogen buses (EurActiv 12/02/09).

Funding scarce

If cities are to make progress in combating climate change, sufficient funding will have to be made available.

The European Investment Bank (EIB) is developing a financing facility to help cities improve their energy efficiency and buy cleaner bus fleets. An initial 15 million euro is foreseen to assist cities in developing projects that can deliver the EU's climate objectives for 2020, but actual financing could reach "billions", according to the EIB's Mario Aymerich (EurActiv 12/02/08).

Last year, the EIB lent more than €10 billion to the energy sector, with more than 20% going to renewable energy projects. An additional 2.6 billion euro was granted to urban public transport systems.

This planned investment will go some way towards providing funding for green projects in cities. The Commission originally envisaged earmarking €500 million for smart energy cities in the EU's economic recovery plan, but the plan was dropped amid fears that the plan did not propose enough funding for energy projects and the distribution of funds to multiple actors would have taken too long (EurActiv 11/02/09).

Some MEPs argued that in the current financial climate, facilitating access to cheap loans would be the best means of delivering funds to the projects that EU cities have in the pipeline, which will require billions of euro.

workshop gathering mayors and high-level policitians in October 2008 concluded that an integrated approach linking member states, cities, policy development and access to financial instruments was the way to ensure that climate change could be addressed effectively. The participants stressed that cities were currently left out of EU decision-making processes, exacerbating the problem of finding suitable funding.


The European Commission maintains that cities are key to fighting climate change. "The main challenges facing humanity such as public health, economic development, poverty, energy, resource depletion and environmental quality are urban-based. And these challenges will continue to grow as the world's cities grow," Margot Wallströmvice-president of the European Commission, said back in 2007.

Ahead of the 2009 European Urban Day conference, Regional Policy Commissioner Danuta Hübner stated: "The urban dimension is especially important in the current downturn because the policies developed by cities have consequences for surrounding areas, the region and often the entire member state. Cities need to be encouraged to take the lead in this process of making the Union more competitive, more innovative and more ecologically and economically sustainable."

Energy Commissioner Andris Piebalgs said the battle against climate change "will have to be fought and won in the cities," which consume most of Europe's energy. "This is why the commitment shown by mayors across Europe by signing the Covenant of Mayors sends us a strong message of hope, particularly in the difficult times that we are facing," he concluded.

According to Fabrizio Barbaso, deputy director-general of the Commission's energy and transport department, cities have limited access to financing instruments to address climate change challenges, due to governments' privileged access to EU decision-makers. He hopes that initiatives like the Covenant of Mayors will act as catalyst, providing for both exchange and competition between cities.

The European Investment Bank (EIB) supports cities' efforts to reduce emissions. EIB President Philippe Maystadt said urban areas could contribute significantly to combating climate change, as they account for 70% of EU energy consumption. "Most of this is related to buildings, urban transport and small firms. We believe that cities have a substantial potential to both reduce this consumption and to make significant progress in the adoption of renewable energy solutions, such as solar photovoltaic technologies," he argued.

The European Parliament, however, has been calling for more EU money to cities. Luxembourg Green MEP Claude Turmes applauded the EIB's initiative, saying the 15 million euro of technical assistance will be "crucial" for cities. "What the EIB is doing right now is really good," he said, because local authorities did not have the financial means to support "bankable projects". "What is lacking now is proper Commission backing," Turmes added.

cross-party group of MEPs, including Claude Turmes (Greens), Umberto Guidoni (GUE), Fiona Hall (ALDE), Mechtild Rothe (PES) and Anders Wijkman (EPP), stated: "EU cities already have projects in the pipeline worth several billion euro and funding could be easily available with regular calls for proposals and short deadlines. Making these happen by facilitating access to cheap loans would deliver much faster relief in the current crisis situation than the measures proposed in the Barroso plan," they argued, criticising the Commission's economic recovery plan.

German Green MEP Gisela Kallenbach criticised member states for their failure to take into account the needs of cities when developing their strategic programmes for the use of structural and cohesion funds. She said a link between sustainability and EU aid is still missing, calling for common indicators to guarantee that European funds will only be allocated to projects that comply with EU environmental policies.

The transport industry emphasises the role of public procurement in driving development of green vehicles. Roman Meininghaus, environmental policy director at ACEA, the European carmakers' association, said the main driving force behind bringing cleaner vehicles to the mainstream is "customer and market demand". Public procurement, he added, "can be a driver", but only if implemented in the right way. Above all, he said, clean vehicles need to become "affordable and harmonised" for demand to increase.

Speaking on behalf of the City of Hamburg and UITP, the international organisation for public transport authorities, Heinrich Klingenberg said greener public procurement is needed to improve transport in Europe's cities. Cities, he said, can provide examples through benchmarking and sharing of best practice. But he also believes there is a need to raise awareness of public procurement rules. "There is a lack of practical tools, information and training," he said.

European cities are increasingly building alliances to support cooperation to reach climate objectives. Eurocities President Gérard Collomb said: "With this Declaration [on Climate Change], we are sending a strong message to the EU and national governments that cities are profoundly engaged in combating climate change. But we need to consider the different levels of capacity existing in different cities. And we are looking to other levels of governance to work together to support cities' actions."



  • 11 Jan. 2006: Commission launched 'Thematic Strategy on the Urban Environment';
  • 24 May 2007: Adoption of Leipzig Charter on Sustainable European Cities;
  • 27 Oct. 2008: Eurocities signed Declaration on Climate Change;
  • 13 Nov. 2008: Commission published proposed recast of Energy Performance of Buildings Directive;
  • 17 Dec. 2008: Parliament endorsed Renewables Directive;
  • 10 Feb. 2009: Signature of the Covenant of Mayors;
  • 28-30 June 2009: Urban Research Symposium 2009;
  • Sept. 2009: Commission to publish report on the state of European cities.