Download publication

Policy Contribution

Going local: empowering cities to lead EU decarbonisation

Decarbonisation and digitalisation are reshaping the European energy system, which will become more decentralised and interconnected with other sectors. Cities have the opportunity to be the key drivers of decarbonisation, but this will require the implementation of a new bottom-up governance system. This paper outlines a four-step mechanism in order to achieve decarbonisation at city level.

By: and Date: November 30, 2016 Energy & Climate Tags & Topics

Four trends are reshaping the European energy system: decarbonisation, digitalisation and, as a result of the two, decentralisation and convergence.

Based on strong public policies, decarbonisation is reshuffling the European energy mix, while innovation in digital technologies is enabling disruptive change in the way energy systems are operated. This enables the European energy system to become more decentralised with increasing interaction between services (electricity, heat, transport, data) that used to be largely separate.

In this new context, cities are the key arenas of decarbonisation. However, European Union (EU) energy and climate governance is based on top-down policies that are not complemented by a solid bottom-up system that ensures consistency of EU, national and local measures and incentivises decarbonisation at city level.

This Policy Contribution proposes better integration of top-down energy and climate policy mechanisms with new bottom-up incentives that aim to promote decarbonisation at city level. This mechanism can be set up in four steps.

  • Step 1: understand a city’s carbon footprint and create a baseline scenario. A participating city should start by carrying out an emissions inventory that would quantify the amount of greenhouse gases emitted from energy consumption on its territory during a specific year. This should identify the principal sources of emissions and therefore enable prioritisation of reduction measures.
  • Step 2: understand a city’s carbon handprint and create a reference scenario. With an emissions inventory in place, each city can identify the areas of its economy with the greatest decarbonisation potential, and can prioritise its decarbonisation policies accordingly.
  • Step 3: create a city Climate Plan. The baseline and reference scenarios would form the basis of comprehensive city Climate Plans. To ensure consistency of national and municipal policies, Climate Plans could be developed as a sub-component of member state National Energy and Climate Plans.
  • Step 4: track progress and allocate financial support. City progress reports on decarbonisation should be used by the EU to determine the eligibility of local governments for EU grants. Grants would be key to the success of this scheme. If EU money is given to a city to implement a project listed in its Climate Plan, it should be paid in in biennial tranches, conditional on positive progress reports.

A grant-based system would give the EU some control over the effective implementation of cities’ decarbonisation projects. EU countries could use city progress reports to provide fiscal incentives to cities that implement in practice their Climate Plans. This premium system would make economic sense for member states considering that the better cities perform in terms of decarbonisation, the easier it will be to achieve national decarbonisation targets.

View comments
Read about event

Upcoming Event

May
30
11:00

Geo-blocking in the digital single market

Geo-blocking is a discriminatory practice that is wide-spread in EU. It prevents online customers from accessing and purchasing products or services from a website based in another member state

Speakers: Felipe Florez Duncan, Marine Elgrichi, J. Scott Marcus, Fabian Paagman, Bertin Martens, Georgios Petropoulos, Agustin Reyna, Werner Stengg and Roza von Thun Topic: European Macroeconomics & Governance, Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

Simone Tagliapietra

Global decarbonisation: a wake-up call for the Middle East and North Africa

Many countries in the MENA region are heavily dependent on oil and gas for exports and taxes. But global decarbonisation could undermine revenues, even though MENA exports are globally competitive. This threatens the MENA region's social contract, so economic diversification needs to start now.

By: Simone Tagliapietra Topic: Energy & Climate Date: April 11, 2017
Read article Download PDF More on this topic More by this author

Working Paper

WP 2017_05 cover

The political economy of Middle East and North Africa oil exporters in times of global decarbonisation

Middle East and North Africa (MENA) oil exporting countries are still not adequately equipped to prosper in a decarbonising world. Decarbonisation should therefore represent an incentive for MENA oil exporters to pursue structural processes of transition from rentier to production states.

By: Simone Tagliapietra Topic: Energy & Climate Date: April 11, 2017
Read article Download PDF More on this topic

Working Paper

WP 2017_04 cover

From start-up to scale-up: examining public policies for the financing of high-growth ventures

What are the challenges of financing scale-ups, and how can long-term public policies support the creation of a better scale-up environment?

By: Gilles Duruflé, Thomas Hellmann and Karen E. Wilson Topic: Innovation & Competition Policy Date: April 10, 2017
Read article More on this topic More by this author

Blog Post

Scott Marcus

High expectations for 5G confront practical realities

The next wave of mobile network innovation is provoking great excitement in the industry. And indeed, there is substantial potential for improvement. However, the exact form of the technology and the appropriate policy support are still far from clear. And we should beware of over-ambitious promises about the impact and uptake of new network technologies.

By: J. Scott Marcus Topic: Innovation & Competition Policy Date: March 14, 2017
Read about event More on this topic

Past Event

Past Event

Trump’s energy policy: America first, climate last?

This event seeked to discuss the potential way forward for the US energy and climate policy, and its implications for both global energy markets and global climate change mitigation efforts.

Speakers: Kristine Berzina, Tim Boersma, Connie Hedegaard, Simone Tagliapietra and Zhang Xumin Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 7, 2017
Read article More on this topic More by this author

Blog Post

Simone Tagliapietra

Trump’s Energy Policy: America First, Climate Last?

What will the new US administration mean for the fight against global warming? Climate change is not even mentioned in the ‘‘America First Energy Plan’’, and Simone Tagliapietra fears a reversal of recent positive steps.

By: Simone Tagliapietra Topic: Energy & Climate Date: February 28, 2017
Read article Download PDF More on this topic

External Publication

Screen Shot 2017-02-27 at 17.42.49

Extending the scope of the geo-blocking prohibition: an economic assessment

This paper was prepared for the European Parliament at the request of the Committee on Internal Market and Consumer Protection.

By: J. Scott Marcus and Georgios Petropoulos Topic: Innovation & Competition Policy Date: February 27, 2017
Read article More on this topic More by this author

Blog Post

Silvia Merler

Big data and first-degree price discrimination

What’s at stake: first-degree price discrimination - or person-specific pricing, had until recently been considered a theoretical case with unlikely real-world application. Yet the increasing availability of big data could make this possible. We review recent contributions on this issue.

By: Silvia Merler Topic: Innovation & Competition Policy Date: February 20, 2017
Read article More on this topic More by this author

Blog Post

Scott Marcus

How good a shield is Privacy Shield?

Privacy Shield was put in place in 2016 to ensure that transfers of personal data from the EU to the US would be in compliance with European Union privacy law, and thus permissible. The institutional framework of Privacy Shield was weak, and depended on the good will of the US administration. Recent actions by the new administration, including the famous executive order forbidding residents from 7 predominantly Muslim countries to enter the US, may have (presumably unintended) effects on Privacy Shield. To preserve the validity of Privacy Shield in European Courts, strong EU-US cooperation and potentially additional agreements may become necessary.

By: J. Scott Marcus Topic: Innovation & Competition Policy Date: February 7, 2017
Read article More by this author

Blog Post

Silvia Merler

Climate change and financial markets

What’s at stake: Ever since the 2016 Paris Agreement to reduce emissions was signed, researchers have been looking at the impact that moves towards a low-carbon economy might have on financial markets and financial stability. We review these contributions here. 

By: Silvia Merler Topic: Energy & Climate, Finance & Financial Regulation Date: January 30, 2017
Read article More on this topic More by this author

External Publication

9783319418445

Policy and Politics in the Era of the Industrial Internet: How the Digital Transformation Will Change the Political Arena

The digital transformation has already had an impact on policymaking, and this trend will continue in the years to come. How will the political process change and how can influencers guide this change?

By: Giuseppe Porcaro Topic: Innovation & Competition Policy Date: December 7, 2016
Load more posts