While the headlines from last year’s COP were dominated by commitments on fossil fuels, another important breakthrough was achieved: a recognition of the importance of local climate action.
The inaugural Local Climate Action Summit convened more than 500 mayors, governors, and other local leaders from 60 countries, while 72 national governments formed a new Coalition for High Ambition Multi-Level Partnerships (CHAMP), committing to partner with regional and local governments to drive ambitious climate action.
The focus on local climate action is welcome, and long overdue. Subnational governments account for 69% of climate significant public investment,1 and hold many more levers over emissions, including over planning and transport. However, we know that moving from ambition to action has proved a challenge in the past. What can national and local leaders do to make it happen?
Going granular
The first thing is to ensure that subnational strategies are underpinned by good evidence on local challenges and opportunities. To take two examples from OECD data,2 the Auvergne-Rhône-Alpes region (France) performs well in terms of low-carbon electricity generation and greenhouse gas (GHG) emissions per capita, while Bratislava (Slovakia), demonstrates strong performance in terms of land use efficiency and passenger vehicle electrification.
Climate change mitigation levers in California (United States) and
Auvergne-Rhône-Alpes (France)
Note: For a specific indicator, a value close to the centre corresponds to a poor performance, and a value close to the edges to a high performance.
There also needs to be a good understanding of local climate risks. While 2023 was the hottest year on record and many extreme events were recorded across OECD countries, temperatures have not increased equally across places. Northern Canada experienced a 3°C increase in air temperatures in 2023 relative to 1981-2010, whereas Nevada (USA) had a 1°C decrease. Climate impacts may also differ at a much more granular scale, across different neighbourhoods within the same city, for example due to a lack of vegetation and a high building density.
Air temperature increase in 2023 relative to 1981-2010.
Source: Copernicus ERA5-Land.
Embedding subnational climate action in national policies
Armed with a better understanding of subnational challenges and opportunities, national governments can begin to develop better policy frameworks that drive local action. At present, among 17 Nationally Determined Contributions (NDCs) for OECD countries (16 NDCs from national governments and the NDC from the European Union), only four countries (Australia, Canada, the United Kingdom, and the United States) mention city/regional GHG emissions reduction commitments. The CHAMP initiative provides an opportunity to make this the norm, rather than the exception when countries submit the next round of NDCs by the end of 2025. NDCs could also include joint climate actions, where local governments can engage as implementation partners (e.g. energy-efficiency retrofits and expansion of green areas).
National urban policies provide another mechanism to drive local climate action. Poland’s National Urban Policy 2030 includes concrete actions to address climate-related risks and proposes legislative reforms to underpin a blue-green infrastructure plan as a tool to monitor and co-ordinate its development.
Beyond (local) borders
Policy makers also need to ensure there are the right mechanisms to co-ordinate climate-related investments locally. In many countries, governance is fragmented geographically, leading to duplication and competition across administrative boundaries.
This can be minimised by aligning goals and targets across functional urban areas (essentially commuting zones) to ensure that subnational climate strategies consider the interconnections between places in making key investments and projects can be designed to address multiple local objectives, combining schemes to reduce GHG emissions from transport with efforts to facilitate access to local job and services. In Vancouver (Canada), the regional growth strategy “Metro Vancouver 2040: Shaping Our Future” aims to stimulate growth in centres and transit corridors, promote working and playing close to home by establishing mixed-use transit-oriented communities, while at the same time aiming to reduce GHG emissions by 80% below 2007 levels by 2050. It underpins the ten-year investment plans, as well as the municipal transport and economic development plans.
Scaling up funding and financing for scaling up local climate action
Of course, more ambitious local action needs to be matched with appropriate funding and financing. We still have a long way to go. Despite the key role of subnational governments in climate-significant public expenditure and investment this still represents only 1.1% of GDP (expenditure) and 0.4% of GDP (investment).3
Regions and cities should be supported to mobilise more funding for climate action. This can be through inter-governmental transfers with environmental conditionalities or grants that are earmarked to green projects, like the new Green Fund in France.
Regional and local governments must also have sufficient leeway to raise, adjust and manage their own revenues, such as taxes, user charges, fees, or land-based financinginstruments to respond to climate needs. To complement funding sources, it is also crucial to enhance subnational access to finance for green projects and to access capital markets, including green and sustainable bonds, in line with the principles outlined in the OECD-G20 report on Financing Cities of Tomorrow.
Another powerful and effective tool to align expenditure and revenues with environmental and climate goals is green budgeting. Using budgetary policy tools to help achieve green objectives is already helping many subnational governments better align their investments with their climate ambitions.
A territorial transition
COP 28 broke new ground by elevating subnational climate action to the top table. Now policymakers need to act urgently to accelerate local action – and align it with national ambitions. With only a year to go before Nationally Determined Contributions (NDCs) are renegotiated, there is no time to waste in doing so.
…………………
The OECD Programme on “A Territorial Approach to Climate Action and Resilience” proposes a policy framework of 9 recommended actions to help decision makers unleash more effective climate action and resilience through a “territorial approach”. It offers evidence from an extensive international sub-national database, as well as a compendium of 36 best practices from cities, regions and countries from all around the world.
