Central government policy alone cannot ensure a green transition – cities, regions and communities can also be catalysts for environmental policy solutions. National, regional and local policy makers have pursued urban, regional and rural development through initiatives that seek to reduce greenhouse gas emissions, and increase resource efficiency while beginning to steer their economies out of the global financial crisis. Experimentation and learning at the local level can provide essential experience and, when successful, lead to bottom-up diffusion of approaches between cities and regions as well as to influence national and even international levels of actions. Co-ordinating governance issues can help achieve the most cost-effective option in attaining green growth, particularly in the areas of green investment and innovation.
In co-ordination with national, regional and local governments, the OECD has been working to bridge the current divide between achievement of ambitious environmental goals and economic development.
Cities are home to over half of the world’s population and characterise many of today’s environmental challenges. The OECD’s Green Cities Programme seeks to assess how urban green growth and sustainability policies can contribute to improve the economic performance and environmental quality of metropolitan areas and thus enhance the contribution of urban areas to national growth, quality of life and competitiveness.
Urban action is a cornerstone of efforts to limit or avoid climate impacts on infrastructure, people and economies. With their in-depth knowledge of the local landscape, urban policymakers are at the frontlines of efforts to adapt and reduce vulnerabilities to climate change. Focusing on the economic costs and benefits of action, the OECD has identified strategies to increase cities’ contribution to adaptation in both developed and developing countries.
As regions often have significant populations and economic activity, and have a bigger natural asset base than cities, they provide another opportunity to implement green growth initiatives on a practical scale. Local and regional governments have a key role to play in the implementation of national green growth strategies because:
Renewable energy in rural areas
What is the impact of renewable energy deployment in rural areas, in terms of economic development? The OECD has organised an international research project, encompassing 16 case studies in Europe and North America to answer this question.
Preliminary findings demonstrate that renewable energy deployment can positively affect the development path of rural areas. For instance, royalties and taxes paid by developers to local communities help them to improve service delivery. New resources are used to build schools, senior residences, or increase broadband access in sparsely populated areas, for instance. Renewable energy installations can also create some employment opportunities in maintenance and operation activities and, under certain conditions, spur self-employment and entrepreneurship.
Yet, the research shed also light on important challenges that can impinge upon policy outcomes. For instance, national and regional renewable energy policies, under the influence of the “green growth narrative”, have set very ambitious targets and high incentives for renewable energy production that have caused distortions. Incentives have triggered rent-seeking behaviours, and installations have started competing with agriculture and tourism for the use of land or landscape amenities. In this context, many local communities have started opposing further deployment. Potential links with rural industries such as forestry or manufacturing are not developed due to the lack of an integrated approach to renewable energy deployment. Reducing the use of spatially blind incentives, and taking into account the characteristics and specific needs of hosting economies could be a way to capitalise on the investment in renewable energy in terms of economic development.
By empowering local governments, national policies can leverage existing local experiments, accelerate policy responses, foster resource mobilization and engage local stakeholders. A multilevel governance framework is needed to successfully manage the coordination of green growth strategies at national, regional and local government levels, as well as with civil society and the private sector. The working paper Cities, Climate Change and Multilevel Governance shows that advancing governance of climate change across all levels of government and relevant stakeholders is crucial to avoid policy gaps between local action plans and national policy frameworks, and to encourage cross-scale learning between relevant departments or institutions in local and regional governments.
Local economic and employment development
Most national and local governments have made ambitious commitments to mitigate climate change and to adapt the new environmental and regulatory conditions, while combating unemployment. Cities, regions and communities need to pursue economic strategies with a flexible approach to labour market, environment and economic policies, while ensuring their coordination. Building capacity on local economic and environmental policies will be essential to effectively support job creation in the transition to a green economy.
Measuring the potential of green growth is a project that aims to define key indicators of area-based transition to a low-carbon economy. The objective is to define measurable indicators at regional/local level that can inform over time of transition to low-carbon economic and industrial activities addressing the two aspects of the green growth economy: fostering job creation and economic development in new areas of growth and sustainable development.
The Climate Change, Employment and Local Development project aims to help national and local authorities put in place good quality greener jobs by developing lower-carbon activities. The final report Enabling Local Green Growth: Addressing Climate Change Effects on Employment and Local Development provides guidance on policy interventions and actions to develop quality employment in the greener economy, to meet the needs for new skills, and to manage the transition of local labour markets to a low-carbon economy.
For 2012, a follow-up project on improving the effectiveness of green local development initiatives will analyse in further detail some of the aspects arising from the report. It will notably identify approaches to support the adaptation of the public sector to the green economy in view of removing the barriers to the emergence and expansion of greener practices and activities in the private sector.
OECD work on adaptation to climate change