Cities and Businesses to Collaborate on Climate Goals
In 2016, 533 cities disclosed their climate-related data through the Carbon Disclosure Project (CDP). The report, titled, It Takes a City: The Case for Collaborative Climate Action, was sponsored by Bloomberg Philanthropies. The results suggest that a strong case exists for cities and corporations to collaborate on climate action.
“Action by cities will be essential to achieving the ambitious goals of the Paris Agreement – and cities will need to collaborate with a wide range of stakeholders to substantially reduce greenhouse gas emissions, adapt to the effects of climate change, and benefit economically and socially from a low carbon environment.”
Collaboration can provide opportunities to share skills, knowledge, and resources between cities and other actors to address climate change. As reported by Hardcastle in Environmental and Energy Management News, cities benefit from partnering with corporations on infrastructure projects because investment from private and public sources can improve their access to financing. These projects are also attractive to businesses because they are typically large — energy-efficiency retrofits or water and wastewater management efforts, for example — with long-term contracts.
Summary of Findings: The Case for Collaborative Climate Action
Without transformative action, the climate will warm around 2.7 degrees Celsius this century – considerably above the “below 2 degrees” goal reaffirmed in Paris at COP21 and the “1.5 degree” aspiration that emerged from the Paris Agreement. Cities have shown ambition but now need to collaborate with a wide range of stakeholders if they are to meet their targets and substantially reduce emissions, adapt to the effects of climate change, and benefit economically and socially from a low carbon economy.
- The world’s cities account for approximately three quarters of global greenhouse gas emissions.
- 75% of the challenges preventing future climate action in our cities cannot be resolved unilaterally by the city.
- The investment needed in cities into low carbon transport, energy, water, waste, and telecommunications infrastructure is estimated at U.S. $57 trillion between now and 2030.
- Nearly two-thirds of cities reporting to CDP are already collaborating with businesses, whether through knowledge sharing, business development, planning policy, project implementation, or financing.
- Out of the 190 cities that have a city-wide emissions reduction target, 74% also collaborate with businesses.
- Cities highlighted a total of 720 climate change-related projects, worth a combined $26 billion, that they want to work with business on.
The Challenges to Collaborate are Numerous
Yes, the idea that corporations and cities should collaborate seems as if it would eliminate many obstacles to achieving appropriate carbon goals. Yet the It Takes a City: The Case for Collaborative Climate Action did identify many challenges that permeate any private sector/ city collaborations. These challenges have the potential to derail progress toward climate action.
Challenges exist due to a lack of …
- Familiarity of cities with the solutions, services, and technologies that are available across the private sector globally, due to limited resources and expertise.
- Familiarity of cities with the business needs of private sector organisations in creating opportunities for collaboration.
- Familiarity of companies with the needs of cities. This results in companies not focusing on innovation to solve city’s needs, or the city being overwhelmed by large numbers of inappropriate solutions.
- Opportunity to form personal networks. There currently is limited cross sectoral engagement, no clear and easy identification of relevant contacts for each sector, and weak relationships between both sectors. Professionals need to know “who to go to.”
- Effective communication throughout procurement. This is a particular challenge around limits to pre-procurement communication, which can be seen as legislative risk by cities and a financial risk by companies.
- Policy certainty. When uncertainty arises about something like incentive schemes, there is a significant risk to the private sector.
- Improving city transparency and financial performance. These would be necessary to create an enabling environment within cities. A wide range of conditions within current city practice around levels of transparency increase the cost and risk of doing business.
- Confidence as an encouragement to market development. It will be necessary to give clear signals to the private sector of intent and to demonstrate a pipeline of projects that support investment to instill confidence and mobilize first movers.
- Respective image and mutual trust. It is important that cities see the private sector as a positive influences and vital partners, rather than to distrust their motives as commercial entities. Businesses must see cities as a dynamic focus of effective action.
Stockholm Mayor Karin Wanngård captures the essence of the city/ corporation dilemma: “The first step in addressing the challenge of climate change lies in understanding the nature of the problem, and the challenges faced by all the parties involved.” One important finding is that cities, which typically access public finance, are not as knowledgeable on how to engage with investors to attract private finance. Sharing such knowledge is just one component of the challenges to collaborations moving forward.
What It Will Take to Collaborate: New and Traditional Means
Meeting the challenge of carbon limits will call upon means of collaboration that are already familiar and accessible. City governments will continue to set strong policies. Businesses will develop new technologies. Investors will provide financial support for infrastructure projects.
But it will also require new means of collaboration. We might not now possess the language to describe what this type of collaboration will entail. Nonetheless, the disclosures by more than 500 city governments to the CDP cities program this year highlight the instrumental climate actions being taken by cities. They also point to the long process it will take to achieve a minimal climate change. If cities will step side-by-side with corporations, they can lead society toward implementation of the Paris Agreement.