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The EU's Cities Mission can speed up the development of climate-neutral cities in Sweden

Cities are of decisive importance for the world's climate-affecting emissions. Large effects on climate change require purposeful investments. Business investments in real estate, transport and energy systems account for the majority of cities' investments. Cities' demand for climate benefit in these investments is therefore of great importance for innovation and competitiveness in the business world.

This web page has been machine translated. If there are any uncertainties, please refer to the Swedish text.

Successful climate change requires the development of new efficient cross-sector working methods in cities. At the same time, it requires new forms of collaboration between actors at municipal, regional and national level as well as at EU level. In this development, the EU's effort Cities Mission will play a central role.

Cities mission

Of greatest importance for climate-neutral cities is the development of new structures and processes for "governance" in cities. This is because climate investments cut across different municipal administrations, with many connections to value chains in the business world. The interaction between cities and national policy is also a necessary condition for success. This, in turn, requires changes in structures and processes for "governance" in national policy and in national authorities. The word governance is used here for the new model where the municipality leads, controls and implements the climate transition by going beyond what it has direct control over. It collaborates with business, academia, regional and national actors as well as citizens, some of whom have control over activities within the cities. The public financing of the climate transition is divided among a number of policy areas and authorities, which makes it difficult to achieve the necessary synergies and pooling of forces. The EU is now making major efforts to ensure that the Union becomes a leader in creating climate-neutral cities. In that context, Fit for 55 in Climate Contract 2030 is central, and the ongoing process within the EU with the green signal will be reflected in Swedish legislation in the coming years.

The role of cities

The importance of cities in climate issues is becoming increasingly prominent. I EU 75 percent of the population lives in cities. Globally, cities account for 65 percent of energy use and 70 percent of global carbon dioxide emissions.This means that their potential and capacity to change is critical for a rapid global transition to be achieved. They need to have high ambitions and innovative power, but above all an ability to change internal governance, coordination and organizations, i.e. "governance innovation".

The role of cities in climate change has been noticed by many countries, including Sweden. The EU has initiated research and innovation (FoI) programme targeting cities. One of the most important is Cities Mission, which aims to turn 112 cities into experimental and innovation hubs. These must be climate neutral as early as 2030. They must constitute models and show the way for how others can change in another 20 years, to 2050. A starting point for the program is that they apply a so-called mission-oriented way of working.This means that different social actors work together towards common ambitious objective. The instrument is based on a combination of top-down priorities and bottom-up initiatives and commitment.

Cities Missions – part of Horisont Europa

The EU's programme Climate neutral and smart cities, or as it is shorter, Cities Mission, is one of the EU's five missions. Missions or missions can be described as strategically targeted R&D efforts. These focus human and financial resources around important societal challenges that require many collaborative innovative solutions to achieve the necessary system effects, so-called system innovation. The other EU missions are cancer, the state of the soil, food and healthy seas, coasts and inland waters. They are all part of the European framework program for research and innovation Horisont Europa which runs during 2021 - 2027. Cities Mission is considered central to the success of the EU legislative package "Fit-for-55 for a faster climate transition".Of the 112 cities within Cities Mission, seven are Swedish, and twelve are located in associated countries to the EU. In 2021, the EU Commission's Mission Board defined what Cities Mission means. The European Commission has allocated 163 million euros for the years 2021–2022 and a further 75 million euros for 2023. An implementation plan has been drawn up with R&D investments that have a clear focus on climate change in transport and mobility, energy systems and urban planning.

The European Commission has allocated 163 million euros for the years 2021–2022 and a further 75 million euros for 2023.

Is there a transformative potential in the EU's Cities Mission?

An important question is whether the mission-oriented way of working that is developed and shaped within the framework of the EU's Cities Mission has potential to transform cities for a faster climate transition. The process is still at an early stage. But we can state that the EU Commission's implementation plan for Cities Mission expresses a clear ambition to develop an innovative and transformative way of working. Below are examples of important elements in the implementation plan that indicate that the EU really wants to enable and drive climate change in cities. These are: the needs of cities must be the basis for the conversion work, project traps must be avoided through new working methods, climate contracts and project portfolios instead of individual project and digitalisation.

The mission-oriented working method focuses on needs that the individual cities identify when working with climate change. What cities demand will look different depending on size, local conditions, geography and national policy context. Concrete and business-related needs analyzes require that different sectors work together with conversion strategies. Citizens also need to be involved. Needs analyzes are important for dialogues between citizens and businesses on the one hand and actors at regional and national level on the other.

However, in most cities, organizations and working methods have limitations and are not initially suitable for adjustment processes that cut across different sectors and policy areas. The global climate problems are too large and complex to be managed within the traditional downpipe-based and short-term structures of cities. Therefore, one of the most important criteria in Cities Mission is that the mission cities invest in innovations that lead to changes in their organizations and working methods. In order for the research and innovation results to be able to support the cities, they must be integrated into the operations. A major advantage of new working methods could be that cities can avoid the so-called project trap: that research and development (R&D) investments stay in selected and specific project without spreading into the cities' core operations, organization and ordinary processes.

A typical example of a mission-oriented way of working that puts the needs of cities in focus is Cities Mission's "climate contract" tool. Cities that are part of the program sign contracts and build up a collaboration with government authorities and other organizations. Central elements are governance and an investment plan for climate action. Primarily, the contracts are drawn up at national level, but 112 cities have, as mentioned, also been selected to participate in the EU programme. The goal is for the cities' highest political leadership to sign the contracts, and the needs the cities have to achieve faster climate change. The needs must then be met by coordinated support from both the national level and from the EU.

Cities Mission's implementation plan also states that the cities should work strategically with project portfolios instead of individual project. A project portfolio combines different types of support for research and innovation, both technical and organizational and policy/regulatory. The portfolio approach needs to be based on objective of the cities and is based on system understanding and coordination. Governance and organizational dimensions are central, as are connections between different systems, such as energy, real estate and transportation. To a large extent, it is about breaking fragmentation and instead creating synergies and large system effects. Purposeful cooperation must take place between Cities Mission, under the Directorate for research and Innovation, and Smart specialization, whose support is financed through the structural funds under the Directorate for Regional Development. With project portfolios, the EU also wants to strengthen the effects of investments in research and innovation, by strengthening the conditions for R&D results to be applied and scaled up.

In order to cope with climate change, the mission-oriented cities need to make use of digitization. The Cities Mission cities are to be testbeds for climate change through digital transformation, so-called twin transition. To facilitate this, the EU has, among other things, launched the program Data Space for Smart Communities. By using the program's IT environment, which integrates fragmented data from energy use and production, water and waste supply, traffic information and more, cities could accelerate the pace of climate change.

Currently, the EU is also developing working methods so that Cities Mission can better cooperate and achieve synergies with other EU programme within its own directorate for research and innovation. The examples below all advocate a mission-oriented way of working and are all important for Cities Mission to be implemented. Innovation Communities (KIC's) brings together business, research centers and universities. Mission Plattform is there to develop national structures and implementation capacity. Other programme are CapaCITIES and the partnership initiative Driving Urban Transitions (DUT). Sweden actively participates in all programme.

Swedish FoI-insatser supports cities that work mission-oriented

If we turn our gaze to Sweden, we can first note that cities and municipalities are included in the basis for the new climate policy action plan. According to the Climate Act, the plan must be submitted to the Riksdag every four years, most likely in 2023. The purpose is to show how Sweden can achieve the climate goals that the Riksdag has decided on. The county administrative board in Uppsala county, together with the relevant authorities, has been tasked by the government to produce documentation for how this should be done. Analyzes and ten proposals for policy instruments have been reported. The County Administrative Board highlights, among other things, the importance of leadership and collaboration between authorities at both national, local and regional level. In order for a transition to be carried out, it is also necessary that cities acquire knowledge that they currently lack and that they have a well-developed ability to drive change work. The County Administrative Board's proposal resonates well with national R&I initiatives that Sweden already has experience with. Since the beginning of the 2010s, several Swedish programme have been based on a mission-oriented way of working. Thus, Sweden also has good conditions to be a leading and driving force within Cities Mission. For example, Swedish experts have already participated for several years in the European Commission's Mission Board.

Swedish experts' proposals for how the missions should be designed.

Below, some important national initiatives are discussed. Among the Swedish cities that participate in Cities Mission - Helsingborg, Lund, Gävle, Gothenburg, Malmö, Stockholm and Umeå - several have been active in programme that were aimed at the public sector's ability to innovate. The goal has been to drive system innovation to achieve sustainable transformation in cities, and to create new forms of cooperation between municipalities, business and research organizations. For example, Gothenburg, Lund, Malmö and Stockholm have been active since 2013 within Vinnova's investments in Innovation platforms for sustainable and attractive cities.The aim was for the cities to become central arenas for the development of innovation capacity and system innovation.

All seven "mission cities" have been active to varying degrees since 2011 within Vinnova's programme Challenge-driven innovation. The program aimed to strengthen various actors' funding for the various sustainability goals in Agenda 2030. One of the program's most important challenge areas has been sustainable and smart urban development. The focus has been on the cities' needs and driven by actors around them. The ambition was to test how innovation can contribute to changing different systems in a real environment. All mission cities, apart from Gävle, also participate actively in three ongoing Strategic Innovation Programs (SIP): Viable Cities, Drive Sweden and IoT Sweden, which are jointly financed by the Energy Agency, Formas and Vinnova. These focus on long-term and system-changing innovation development for sustainability and competitiveness.

So far, 23 Swedish cities and municipalities have drawn up and signed the Climate Contract 2030, which means national contracts with measures and financing plans for climate change. Seven of the cities also participate in Cities Mission. The Swedish strategic innovation program Viable Cities supports the climate contracted cities in various ways together with six government agencies, including Vinnova. Climate Contract 2030 is updated annually, with both new commitments from partners and updates on cities' progress and experiences. Tidigare Vinnovasatsningar has played an important role when the cities developed their needs analyzes and commitments before the climate contracts. For example, the way of working based on the municipalities' challenges has become a natural starting point. This is particularly clear in the climate contracts' so-called "innovation hubs for climate-neutral municipalities". The working method was already introduced in the Innovation platforms programme, which has been running since 2013.

Strategic challenges and opportunities in the future

Participating in the Cities Mission EU program means a number of advantages, both financial and new development and cooperation opportunities. But the program also requires the cities to increase their ambitions. The EU is in the process of deciding on new, stricter policy frameworks in the Fit-for-55 climate package and in the Digitization Strategy. This will lead to tougher demands on the cities, which will also have an impact on programme such as Cities Mission. This means challenges for Swedish cities, but compared to the cities of many other countries, the Swedish ones probably have significant advantages through the abilities and experiences that have been gradually built up. They can also exploit synergies between ongoing national programme, such as Viable Cities, Drive Sweden and IoT Sweden.

The most challenging part of mission work is probably not about technical aspects, but about changing the cities' governance, structures, organization and working methods. The changes must be built into the cities' core operations and driven across the cities' different administrations, which is a major administrative governance challenge. In addition, this management needs to be done in close cooperation with external actors, in particular with the business community, which in various ways has a decisive impact on the climate impact in and around the cities. The governance challenges are thus significantly greater than administrative governance. In that context, the concept of governance is used, which includes governance in cooperation between several different actors. In the same context, climate contracts can become an important institutional prerequisite for creating new expedient models for goal-oriented governance, organization and collaboration, so-called governance innovation. Over 20 Swedish cities and municipalities already have experience with national climate contracts. They receive strategic support from and collaboration with regional and national authorities, which increases their opportunities to change. When the cities remove and reform significant organizational and regulatory barriers, this in turn can simplify the work of linking FoI funding and other growth policy efforts.

Author

Nannan Lundin

Chief Analyst

+46 8 473 30 58

Last updated 5 May 2023

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