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From words to action – how municipalities and cities can finance climate transition

Climate transition requires more than visions – it requires action. Across Sweden, several municipalities and cities are leading the way with concrete measures that reduce emissions, strengthen resilience and create sustainable communities. The transition needs to happen on a large scale and at a rapid pace. But how should the transition be financed and how should we solve the major challenge of increased consumption?

- Municipalities and municipal companies have a great opportunity to be part of the transition to a circular economy, from procurement and investments to risk assessment and long-term planning, says Carolina Andrén Eriksson, senior expert in circular financing at RISE and chair of the Nordic roadmap for circular financing.

For a circular economy to become a reality, business models based on long life, reuse and high utilisation of products and resources are required. But for these models to grow and become competitive, financing solutions that support circular activities are also needed – including in the public sector.

Cities currently account for around 70% of global carbon dioxide emissions, which puts extra pressure on cities and municipalities to take action on climate change.

Together with the city's transition team, we analyse what measures and changes need to be made. It is simply a matter of working on what will have the greatest impact.

The public sector has a key role to play

Municipalities and municipal companies have great potential to drive the transition by demanding circular solutions in procurement, developing reuse strategies, and implementing governance models that promote long-term value preservation. However, there are challenges here as well.

- Circular value chains require a greater degree of planning and the involvement of more actors throughout the chain, but they also offer many opportunities to create a local economy that is environmentally, socially, and economically sustainable. For a municipality, it can be crucial to receive support during the initial phase—to learn from previous experiences and to get help in creating a system tailored to the municipality’s resource flows and operations,” says Carolina Andrén Eriksson, and continues:

- Through experience from both businesses and municipalities, we can draw the best lessons from each sector to create solutions that meet the municipality’s needs while complying with applicable laws and regulations.”

A clear example of a city that is accelerating this work is Malmö. 

- Here at RISE, we support them with our expertise in climate change, including through partnerships. One example is a project where we focus on private consumption. Together, we are working on prioritising measures based on Malmö's ambitious goal of achieving net-zero emissions by 2030. Together with the city's transition team, we are analysing what measures and changes that need to be made. It's simply a matter of working on what has the greatest impact, says Ulrika Vejbrink, Innovation and Process Manager at RISE..  

She explains that the transition team in Malmö is showing great commitment and involvement in the work, which is particularly important for success.  

- When we work together, it also becomes clearer to them what measures are needed and how they can successfully implement them. 

Climate investments in cities or municipalities can add value by covering the entire sustainability area, but also society in general.

Data and statistics as a basis

Ulrika Vejbrink explains that there is a difference in how municipalities can act in different areas of climate change.  

- If we look at sustainable construction and mobility, these are areas over which the city has some control and can make more direct efforts compared to, for example, private consumption. But consumption is an important part of climate work, as greenhouse gas emissions from household consumption are around 5.5 tonnes per person per year, depending on what you include. In order to achieve the Paris Agreement targets, global emissions should be reduced to 1 tonne per person per year by 2050*, says Ulrika Vejbrink.  

In its work with the City of Malmö, the team uses various data sources and the Consumption Compass tool to obtain the best possible basis for decision-making and to identify which target groups should be prioritised in the work. The Consumption Compass is an interactive tool that enables municipalities and authorities to analyse, compare and reduce emissions at the local level. It shows emission levels at different geographical levels, from counties down to specific postcodes.

- Together with the team in the city, we are working on workshops and analyses where we look at Malmö's potential to create maximum benefit in the transition,’ explains Ulrika Vejbrink.  

Carolina Andrén Eriksson and Ulrika Vejbrink see the challenges facing municipalities and cities, but also the opportunities this creates.

- Climate investments in cities or municipalities can add value by spanning the entire sustainability area, but also society in general. For example, if a city or municipality invests in smart infrastructure solutions to manage heavy rainfall and at the same time contributes to strengthening the positive impression of the city centre, then they have thought ahead, they both say, concluding:

- These are the kinds of things we also support municipalities and cities with. At RISE, we have expertise in the entire field of sustainability, for example circular transition, industrial transition, innovation management, business model development and a wide range of technology and technical innovation.  

*Consumption-based greenhouse gas emissions per area - Sweden's environmental objectives 

>> How your business can receive support in climate transition through RISE expertise: 

Climate transition in urban environments

Practical tips for accelerating climate change mitigation  

  1. Translate climate goals into concrete actions
  2. Create sustainable solutions in collaboration across the entire municipality/city
  3. Steer towards climate-smart buildings, smart energy solutions and sustainable mobility
  4. Engage residents and local actors in circular initiatives 

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