How municipalities can adapt to the climate change?

Five perspectives on climate change & cities

Municipalities and cities have a significant impact on climate change. According to UN estimates, cities consume 78% of the world’s energy and produce 60% of greenhouse gas emissions, even though they cover just under 2% of the earth’s surface.

Typically, municipalities have taken a narrow approach to climate change from the perspectives of mitigation and adaptation, an approach which pays less attention to innovation and the development of new practices. However, it is important to make this approach more holistic. With a more holistic approach, the reduction of the risks related to climate change and the potential for sustainable action – as well as other important aspects, such as governance, innovation and the fairness of climate action –will be considered.

Climate work requires the right operating models

Municipalities should adapt their governance and operating models to take better account of the complexity and extent of climate change. According to a survey conducted by Deloitte and ESI Thought Lab, cities often continue to play their traditional roles in sustainability and sustainability matters. The criteria related to these themes are used to some extent, for example, in procurement. However, it is equally important to set individual and hyperlocal targets related to climate change for a specific region or place. These may concern, for example, rising water levels or reducing climate pollution and may bring about concrete changes in the practices and processes of the municipality and its ecosystem.

For example, the city of Rotterdam has published Offices for Sustainable Development and Adaptation (Sustainability and Climate Adaptation Offices) to guide climate work. The cross-cutting offices of the city’s administration coordinate and develop climate, resilience and sustainable development measures. This contributes to the synergies of climate work within the city and prevents measures that weaken climate work across the government’s activities. In addition, the planning and decision-making of the city’s climate work are primarily hyperlocal and not sectoral; resultantly, the work is genuinely based on solving problems and considering local needs.

Identifying risks alone is not enough

The consequences of climate change are already being seen around the world, for example, as extreme weather events, rising water levels and environmental impoverishment. Climate risks are increasingly being highlighted.

Modern tools and technologies provide municipalities with new kinds of support in regard to reducing climate risks (such as pollution) and reducing the adverse effects of floods, for example. Cities especially invest in real-time air and water quality monitoring equipment: according to our survey: 93% of cities invest in air quality monitoring and 88% invest in water quality monitoring. In addition, 69% invested in various warning and alert systems aimed at preventing problems caused by extreme weather conditions.

According to a report published by the Finnish Climate Panel in autumn 2021, the implementation of adaptation policy and plans must be promoted swiftly. This means, for example, investing in funding for weather and climate risk management, human and information resourcing, regulation, monitoring and evaluation, legitimacy issues and strengthening synergies between adaptation and mitigation. Municipalities must therefore move from planning towards actual risk assessments and adaptation measures.

For example, the city of Helsinki’s climate work includes Carbon Neutral Helsinki in addition to the Action Plan and climate change adaptation policies for 20192025. These adaptation measures are to be integrated into the city’s land use and construction, education and teaching, nature management, recreation, social and health services, industrial policy, and preparedness and preparedness planning, and are part of Helsinki’s quality and environmental management system.

Sustainability is required

Municipalities must set ambitious targets for reducing emissions and using renewable energy. It is equally important to ensure that day-to-day activities support this objective. According to our survey results, globally, only 47% of cities have set their targets at the level required by the Paris Agreement on climate change. Nearly one-third of cities aim for carbon neutrality and 30 per cent plan to switch completely to renewable energy in the coming years.

Just over half of the cities surveyed apply environmental friendliness and sustainability requirements for new and significant renovations that are stricter than similar regulations at state or state level. Cities have developed financial incentives to encourage the introduction of energy-efficient solutions, including those for existing buildings. Nearly 35% of cities stick to ‘green building’ standards in government construction and renovation projects, and publish data on the energy consumption and performance of buildings.

According to Sitra’s report, the majority of Finnish municipalities have set ambitious climate targets: 206 out of a total of 309 municipalities have a climate target and 130 municipalities aim for carbon neutrality. The most common target year for carbon neutrality is 2030, but Joensuu and Lahti, for example, plan to be carbon neutral by 2025, while the municipality of Li has already achieved carbon neutrality.  

However, Finnish municipalities have fewer targets and measures related to nature loss: 64 municipalities have biodiversity targets, but only 26 municipalities have defined the measures. 

Biodiversity is an important objective, not only because of its independent value, but also because of ecosystem services and cultural ties in terms of the sustainability of municipalities’ activities.

For example, Montreal has included biodiversity as part of the city’s strategic planning, and the city has a number of initiatives and programmes designed to promote biodiversity. The city’s measures include, for example, the Natural Ecosystems Management Programme, the Coyotes and People Coexistence Programme, the Natural Trees Conservation Programme and the Wildlife Mobility Programme in the Urban Environment.

Empowerment to support innovative activities

Globally, the environment and sustainability will form the second largest investment targets in cities over the next three years. To improve the value of these investments, municipal leaders must find more effective ways of collaborating with actors in the growing climate and clean tech sector. Cooperation should focus on piloting, testing and scaling modern technology solutions. For example, globally, 78% of cities have invested in applications that track energy consumption, 69% have invested in so-called energy consumption smart water meters and 67% have invested in smart grids.

Municipalities must also use their influence and resources to combat climate change, promoting innovative technologies and financial partnerships. To support the development of supply, municipalities can help innovators to overcome the obstacles they typically face, such as regulatory requirements and financial challenges. This, in turn, supports the scaling of innovation activities towards the level needed for the climate. For example, based on our survey, nearly a third of cities encourage their partners to proactively hold ‘pitching sessions’ in which they present their ideas to the city.

Municipalities, on the other hand, can support and demand the development of innovative financing methods. The cities involved in the survey said that they would seek to soon move from traditional funding models towards sales finance models and vendor collaboration concepts in order to support various smart urban development projects.

For example, the city of New York has implemented experimental co-creation projects for new innovations outside traditional administrative practices. These projects have contributed to the development and uptake of innovations related to governance practices and new approaches and solutions.

The fairness of climate action must be at the heart of municipalities’ climate work

Although the effects of climate change are global in nature, they are perceived differently in parts of different populations. When deciding on climate change-related measures, municipalities should consider their measures comprehensively from different aspects of responsibility and consider the environment in all decision-making  about social, health and economic impacts. To increase the well-being of residents and their participation in measures designed to combat climate change, it is also important that municipalities form strategic partnerships with local communities and involve them in decision-making.

Combating climate change requires wide-ranging cooperation

Municipalities will play a key role in the fight against climate change in the coming decades. 

Increasingly importantly, municipalities act as role models in this vast ecosystem by creating a common understanding, enhancing coordination and developing cooperation. This can reduce the emergence of conflicts of interest between different stakeholders and can ensure that the measures taken contribute to the achievement of key climate objectives.

Text: Anne-Maria Flanagan, Partner, Climate & Sustainability, Deloitte and Nita Korhonen, Government & Public Services, Deloitte