By Michael Shank

Environmental budgeting processes in Oslo are introducing a new form of city governance featuring fewer silos, greater collaboration and more efficiencies and benefits across government.

This article is written by Dr. Michael Shank, Director of Engagement at the Carbon Neutral Cities Alliance.

The problem: There are often too many silos with too little coordination across city departments.
Why it matters: The missions and mandates of a city are inherently intersectional.
The solution: By de-siloing city structures and running everything through one department, we improve city performance.

The idea of a climate budget is not new for cities anymore. Many cities have introduced a climate budget, following in the footsteps of our member city Oslo in Norway. Oslo is the much-heralded inaugural leader of the concept, adopting a climate budget in 2016, they are on their road to achieving an emissions reduction goal of 95% by 2030.

Why more cities should join the movement

As the city continues to improve upon their climate budgeting process, it’s worth checking in to see why the climate budget is so beneficial and why more cities should join the movement.

A climate budget is a pretty simple concept. The core idea of Oslo’s budget is that it forces the whole city government to focus on where they can cut emissions. When budgeting for emissions reductions across each department or agency, it serves as a very helpful planning tool, which is why so many cities have already integrated it.

These efficiencies, competencies and missions are advantageous when the city has a strong and clear emissions reduction mandate that comes from the top.

But beyond the basic climate budgeting idea and the benefits that come from having every city department and agency adhere to this emissions reduction strategy, what are the additional benefits that come from coordinating across and above city silos in this way? And are city cultures and environments changing as a result?

Yes, it turns out the city culture is changing for the better. When you have to run every new proposal through the climate office, as the City of Oslo requires, there are a host of other benefits that stem from that reorganisation and streamlined workflow.

Let’s take a look at a few.

Efficiencies across the board

First, there are new efficiencies. With a well-staffed climate office, other departments and agencies can lean on, borrow from, or contract this expertise so that non-climate offices don’t have to hire up or staff up in this way. Those are substantial savings for a city. Additionally, the city organisation as a whole becomes a more efficient machine given the increased coordination and communication across all agencies. And since climate action brings with it so many socioeconomic and health co-benefits, which then touch and impact every aspect of city programming, it sets up a virtuous cycle of positive reinforcement across the organisation.

Second, there are new skills and competencies. Oslo’s climate office is required to liaise with every other city department or agency on every new proposal, so the climate staff quickly learn the diverse and varying cultures, capacities, languages and approaches intrinsic to other city offices. That learning curve and resulting competencies are not only good for a city staffer’s resume and professional development, but that’s also a win for the city.

The city’s talent just got smarter and more capable. Similarly, non-climate offices get a learning opportunity when witnessing how their department’s policies and programmes impact the planet and the important and creative ways to tweak those projects to emit less. This is all good knowledge to have going forward. It makes for a more resilient and adaptive city workforce as well.

Putting the environment at the heart of procurement and budgeting

Oslo’s new procurement practices are a good example. Procurement standards have been tightened to ensure the environment is weighted at 30% in all procurement processes. The city also changed its common tender criteria to signal that all municipal construction sites should have zero emissions by 2025.

Now, Oslo’s Agency for Improvement and Development, which previously focused mainly on price and quality and preventing worker exploitation and tax evasion when purchasing goods and services, has to pay close attention to environmental criteria. As a result, in all municipal construction projects, a large majority of vehicles owned by the city and deliveries made to the city are zero emission.

Third, there are new missions and models. In Oslo, up until recently, the climate budget primarily focused on direct emissions. The new budget for 2024 is the first that systematically includes indirect emissions. The same goes for energy with production, consumption and efficiency measures. That means that the parameters for what’s included in Oslo’s overall climate budgeting process widen significantly.

For example, desk or office furniture at city-run senior centres and schools become part of the climate budgeting process since greenhouse gases were emitted when manufacturing them. Concrete and steel building supplies at city-run construction sites similarly become part of the budgeting process given the embodied emissions in the built environment. These indirect emissions are as essential to the climate budgeting process as direct emissions because of their sizable carbon footprint. The built environment alone, for example, generates 40% of annual global CO2 emissions. Capturing that in the budgeting process, then, is essential.

It’s important to note that these efficiencies, competencies and missions are advantageous when the city has a strong and clear emissions reduction mandate that comes from the top and that has been adopted by the city government and the City Council. That’s essential for ensuring an all-agency commitment to this work so that the climate office, through which everything must run, has the agency and authority it needs to do its work effectively across city departments. Oslo’s city agencies have that mandate from above, which makes all the difference in the world in getting the good work done expeditiously.

Going forward, as these climate budgets continue to be improved, tweaked and perfected, all of this work has the potential to usher in a new form of city governance where there’s a more seamless working relationship across departments, fewer silos, more collaboration and coordination and more efficiencies and co-benefits. And that would be the big win.