Making the most of the Recovery Fund: Cities as engines of a green-social recovery in the EU

On the 23rd of April, the European Council agreed on a 'Roadmap to Recovery' to support member states facing the economic recession the EU has entered as a consequence of the pandemic. At the moment, the announced Recovery Fund of €1 trillion is being designed by the European Commission, which is working on a proposal to define the economic sectors that will be prioritized and the form that this extraordinary financial investment initiative will take.

In the present scene, many voices have pointed out the relevance and the opportunity of the Recovery Fund because it can contribute to face the economical negative consequences of the corona-crisis integrating, at the same time, pending social and environmental issues that are explicit objectives of the Social, Cohesion, Environmental, and Climate Policies of the Union. Addressing them emerge even as more crucial in the present situation.

The capacity of the Recovery Fund to take into account in an integrated manner all these EU policy dimensions, avoiding the temptation of delivering a financial mechanism focused only on the economic recovery, assigns it a timely and relevant transformative capacity. As it is an extraordinary instrument, it is not determined by the path dependence that normally obstacles the necessary evolution of existing programmes and funds within Cohesion Policy and other frameworks. Consequently, it can embed a holistic-strategic approach capable to fit the complex present circumstances but also to make the most of the opportunities that such a relevant financial investment can bring.

[Con la colaboración de Red Eléctrica de España]

It is worth noting that acting in all the policy areas mentioned in an integrated manner is substantial to advance to more sustainable futures, but it is also the condition that will allow the EU to take a further step. This is because an integrated policy vision allows adopting a regenerative approach aimed at the same time to create prosperity and restore the negative environmental and social effects caused by the externalities of the economy (and reinforced by the corona-crisis). Maybe it is too ambitious to think about the Recovery Fund in regenerative terms, but if it is designed to cope with the urgency of the moment considering, at the same time, the challenges of the medium-term, it can start an ambitious policy path concerning environmental, climate, poverty/social exclusion, and demographic challenges, etc.

But how can the Recovery Fund be implemented to adopt such a transformative green-social approach in the Southern countries of the EU? To identify the first reply to this question it makes sense to look to the places where the negative effects of the corona-crisis are being 'territorialized' with more intensity in those countries, affecting negatively many European citizens: These places are the EU cities and towns, where more than 80% of the Europeans live. At the same time, EU cities are responsible for around 70% of CO2 emissions, account for about two-thirds of primary energy demand, and concentrate social vulnerability and urban poverty. Because of all these issues, cities emerge as crucial to fight climate change and to make the just energy transition that will take Europe to be the first continent in achieving carbon neutrality. It is good news that this transition can be made by improving cities (their buildings and public space, their services, their mobility systems, their tourism model, etc.) and, thus, the daily life of all their citizens.

Looking at the Southern countries of the EU under this lens, we see that they are the most vulnerable to Climate Change. Observing the urban policy action has been anticipated by many municipalities in collaboration with the industry, the local communities, and other local stakeholders, we identify that the cities of those countries offer a range of specific sectors (urban regeneration, housing, mobility, tourism, etc.) in which decarbonization and adaptation to climate change can become the route-map for the creation of new green jobs, and fighting social vulnerability from a regenerative approach.

It is worth noting that cities in the Southern countries have a lot of experience in working within EU programmes. Because of this, they could deliver a rapid administrative response to the urgent action needed to implement seamlessly the Recovery Fund. Moreover, they count on an accurate diagnosis of their built environment, their society, and their most relevant vulnerabilities. Thus, they can identify where, under specific conditions, the funding can generate more added value. Because of all this, cities are the governmental and administrative level in which the action of the Recovery Fund can be green and social at the same time, as well as effective and rapidly implemented to vitalize local economies. The action to be undertaken by the Fund at local level provides different concrete opportunities. We highlight the following:

• Recently the member states have submitted their route-maps to meet the EU’s energy and climate targets for 2030, the so-called National Energy and Climate Plans (NECPs) introduced under the Regulation on the governance of the energy union and climate action (EU/2018/1999). These plans provide a solid framework to guide local action towards decarbonization in each country. In this regard, the Recovery Fund could support measures implemented in cities and villages fully coordinated with the NECPs, contributing to align the climate action of the national and local levels (that is insufficiently coordinated in the Southern EU countries).
  
• Research shows that in the Southern EU countries cities are less active than those in Central and Northern countries concerning climate action (and particularly adaptation). Because of this, the Recovery Fund could incentivize the development of adaptation and mitigation local plans fully aligned with the NECPS as a condition to accessing the funding. This leverage action could be crucial to incentivize medium and small cities to develop their climate route-maps and to create climate capacity.
  
• The integrated urban regeneration of the deprived neighbourhoods of cities from a regenerative vision emerges also as a relevant opportunity in which the Recovery Fund could create synergies with the Cohesion Policy Funding post-2020, and particularly with its urban axis.
  
• Introducing a research mechanism aimed to test new solutions at the neighbourhood scale. It can make advance knowledge and experience about the implementation of new specific measures for a just energy transition in the field of clean energy (e.g. boosting energy communities); adaptation of the public space and buildings to climate change; urban mobility; sustainable tourism; training in green jobs for specific vulnerable groups; updated services for the elderly and other social groups; etc. In this regard, the Fund brings a good opportunity to provide cities with a budget and a policy framework that can boost innovation and replicability.
  

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By undertaking this and other synergic paths, the Recovery Fund could provide the framework to implement and test an approach and a range of solutions considered necessary but that for a long time have been put off in the EU, and particularly in the Southern countries. Maybe, could this crisis open a policy window (in the sense pointed out by Kingdon) aimed to deliver a sound green-social development in the Union?