EU recovery plan is failing to meet cities’ climate ambitions

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The European Commission’s NextGenerationEU recovery plan offers a unique opportunity for the EU and its cities to achieve a just, green and prosperous future for the people of Europe. 

Launched in 2020, the plan is a short-term means of responding to the economic damage caused by COVID-19, with €720 billion provided through its main funding instrument, the Recovery and Resilience Facility. It also offers huge possibilities to invest in green infrastructure that can propel Europe’s transition towards climate neutrality.  

From the beginning, cities recognised the plan’s potential for stimulating public and private green investments at the local level. With local governments responsible for 80% of spending on environmental protection, we urged the EU and national governments to work with us to design national strategies incorporating local climate projects. 

However, four years on, it is clear that our calls have largely been overlooked. NextGenerationEU provides investments for some cities in key urban areas, but cities are not generally directly empowered with resources. A different kind of partnership is needed to accelerate Europe’s just and green transformation. 

With the plan’s investments ending by 2026, there are few opportunities for reform, but important lessons can still be drawn from cities’ experiences to ensure the EU better supports future public investments.    

Listening to cities’ needs

These experiences are outlined in a new report from Eurocities and the Global Cities Programme at CIDOB (Barcelona Centre for International Affairs), which highlights the absence of cities’ participation in the design and governance of recovery plans.

Despite strong calls from local leaders for an increased role in the plan, cities have reported ongoing bureaucratic challenges, such as a lack of consultation and the territorially blind distribution of funds. 

Added to this, the design and governance of member state’s plans have been centralised at national level, with a lack of consideration for local governments’ needs.

In Budapest, the green initiatives proposed by the city’s administration have largely been overlooked, including plans for the decarbonisation of public transport and energy independence.

This is due to a highly centralised national government that has prevented funding from reaching the local government.  

In addition, most national plans have focused on distributing resources through competitive calls rather than giving cities a say or empowering them based on their needs.

Funding instruments less fit for cities’ needs

In Barcelona, the city devised a plan to address green transformations, including cycling lanes, low-emission zone control mechanisms and initiatives to improve the energy efficiency of buildings.    

Barcelona, like other city administrations, would have welcomed the opportunity to co-design country recovery plans, but the role of city administrations has been reduced to executing projects and spending allocated funds, which has made funding instruments less fit for our needs.

However, when cities did receive funding, they delivered urban transitions focused on climate action. 

For instance, Bologna should receive up to €1bn, which is being used for city-wide projects focused on sustainable development. This includes building new green infrastructure and constructing two tramway lines.

But, despite some cities’ positive experiences, it is evident that not all the investments will be delivered by 2026.

As a result, we call on the EU institutions to take a pragmatic approach and to reallocate part of their unspent resources directly to cities that have ready-made projects aligned with the recovery plan’s climate objectives.

In parallel, we urge the EU and our own governments to help us implement already committed resources by reducing the bureaucracy related to urban investments through reforms at the national level.

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Recognising cities’ bold vision for climate action

Looking at the longer term, as city leaders, we continue to be concerned about the EU’s plans for NextGenerationEU. Some EU leaders have suggested that the plan could be a faster, simpler way to deliver EU cohesion funds. 

Thanks to the partnership principle, which requires the EU to work with territories to deliver cohesion investments, cities have a record of developing concrete investments that promote sustainable urban development. 

As cities continue to turn the European Green Deal’s ambitions into reality through partnerships like the 100 Climate Neutral Cities Mission, it is logical to strengthen, not weaken, the partnership with cities to deliver future EU programmes, including Cohesion Policy.

This is why we are particularly worried about ongoing EU discussions, where the Recovery and Resilience Facility’s centralised method is being put forward as the preferred delivery mechanism for future EU investment strategies. The facility cannot be viewed as an alternative to the cohesion policy’s distribution method, which puts territories at its core. 

At the same time, we do not believe a realistic EU climate investment strategy can be solved through the current EU budget and without seriously considering the implications of EU budgetary rules that often negatively affect local administrations’ capacity to deliver investments for climate mitigation and adaptation.

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Focusing on long-term solutions, we must raise our collective voice so that the EU institutions avoid the mistake of making the Recovery and Resilience Facility the model for future EU investment schemes. 

Considering the climate challenges faced by Europe, we need to reinforce action at local level to both mitigate and adapt to these effects. 

With the European elections approaching, the next EU mandate must trust cities to implement vital green initiatives that can save our societies from the potentially catastrophic impacts of climate change. 

Rather than taking away the current public investments available locally for climate action, the EU must double its efforts. Along with more public investment, this means improving private capital at the local level for climate investments via private investors and institutions like the European Investment Bank. 

One example, estimated by the International Energy Agency, is that 70% of clean energy investments will need to come from the private sector to reach net zero by 2050.

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As city leaders, we have great experience in building strong public-private partnerships to drive local change. If entrusted with the right level of funding and resources, we can be a critical ally to the next EU institutions, working together to ensure the green transition and build a better future for everyone.

Anna Lisa Boni is Deputy Mayor of Bologna, Laia Bonet is Deputy Mayor of Barcelona, and Benedek Jávor is Head of the Representation of Budapest to the EU.

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