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Climate Strategies and Sustainable Economies in Europe

Aspen Energy Forum
Florence, 02/07/2016, Public Event

Smart cities: drivers for energy management and quality of life

Cities are where many of modernity’s greatest problems emerge, but also where the most innovative solutions are being tried out. In effect, urban centers are a hotbed of social, economic and often technological innovation. A concentrated density of activity and productive capacity, however, necessitates strong creative responses to the challenges that accompany continuous change. Urbanization is a burgeoning phenomenon, especially in the developing world. It could thus be said that the impetus to redesign and disseminate sustainable development models is going to have to come primarily from cities. Hence the role of urban sustainability within the context of the UN’s Sustainable Development Goals, both as a goal in and of itself and as one that reaches across the board to touch on other more general ones (e.g. to “ensure sustainable consumption and production patterns”). There is growing awareness that quality of life is directly correlated with sustainability, and this is generating a convergence of environmental, energy-related, architectural and social aims (in that they are linked with both individual and collective lifestyles).

Various networks of cities are intensely active on these fronts, with the intention of sharing best practices and creating opportunities for exchange, in a spirit of both healthy competition and economic dynamism. Concerning certain age-old and obvious issues such as transportation and mobility, the evolution must be away from the logic of emergency: for instance, tackling reducing air pollution though a rational analysis of how large masses of people move, for work or other reasons, on a daily basis. Energy demands need to be confronted by adopting the clean technologies that have recently become available, as well as by encouraging simple energy-saving habits. At the same time, digitalization can truly make urban centers “smarter” and more resilient.

Local governance also faces the challenge of going beyond technical solutions to generate synergies at higher governance levels – national, transnational (Community in the case of the EU), and international. Effective management of local-level problems can contribute to rebuilding that faith in democratic institutions that the phenomena associated with globalization have so eroded.  Activating virtuous circuits between government and private interventions at sub-national level – primarily in the largest cities – would be a pivotal step. With resources ranging from the “sharing economy” to fairer and more effective fiscal policies for the management of common assets, city administrations and other local bodies will, in any case, be in the avant-garde in testing a mix of measures aimed at a more sustainable future and better quality of life.

Making economies more sustainable: the role of government and cities in climate change policies

The Paris Agreement has received mixed assessments, but it is widely recognized that it is indeed a step in the right direction. Major economies of the world, both from the developed and developing world are increasing their focus on climate change and energy issues. For instance, in the context of the UN 2015 Sustainable Development Goals, 2 out of 17 general goals are directly related to climate or energy. In reality, the best approach may be to view environmentally sustainable measures as the foundation of all the other goals, in order to make the entire package of policy measures sustainable.

Climate change is a global problem that requires the use of both market mechanisms and government interventions to create efficient markets, at different levels of governance ranging from local and national to international. Two factors were discussed in more depth, and these stand out as essential to the European efforts on climate strategies and on building a more sustainable economy: technological innovation and financing.

So far, investments in Europe have been hampered by the lack of a true single energy market – especially in light of the fact that energy is a very capital-intensive sector. Despite many uncertainties, global trends over the next decades are clear enough in one respect: all projections agree that growth in consumption will be very rapid, so this is the backdrop against which companies and governments can plan the best energy mix. Public grants are certainly not going to be sufficient to generate the amount of financing for clean energy over the next decades, and there is currently a large gap in the investments being made: public-private partnerships are thus crucial to encourage private investors and to send the correct market signals.