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Why New York and London are betting on climate budgets

As mayors of two of the world’s largest cities, we believe this powerful tool can help us reach net zero.

By Sadiq Khan and Eric Adams

Last month, New York City released its strategic climate plan, PlaNYC: Getting Sustainability Done, to protect New Yorkers from climate threats, improve our quality of life, and build the green economy. With this plan, we will create an equitable, healthy and resilient future together.

The challenge, as mayors and city officials around the world can attest to, is turning commitments into funded and measurable actions. The speed and scale of change needed to meet our targets requires a fundamental shift in the way cities function.

The threat climate change poses to cities cannot be overstated. By 2050 New York City could have over 60 days per year with temperatures of more than 90°F, and increased flood risk from severe rain events. We had a preview of our climate future in 2021, when Hurricane Ida inundated neighbourhoods across our city and claimed the lives of 13 of our neighbours. London is also experiencing more intense and frequent weather events due to climate change. Last summer the city experienced both drought and heatwaves with record breaking temperatures, which caused wildfires and led to the London Fire Brigade’s busiest day since the Second World War.

Addressing this crisis will require us to think creatively about how we use the budgetary resources and powers at our disposal. As mayors of two of the world’s largest and most diverse global cities, we are championing climate budgeting to make sure that we immediately act on the climate crisis.

Climate budgeting is a governance system and ongoing process to integrate climate commitments and considerations into budget decision-making and to develop new actions that will move our cities towards climate goals. Through the climate budgeting process, climate measures are proposed, evaluated and adopted in line with the budget cycle; responsibility is assigned for implementation across city government; and the city’s investments and progress against long-term climate targets, such as achieving net-zero emissions by 2050, are regularly made public.

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Budgets are moral documents. And climate change is not only an environmental challenge; it is also a moral one. Climate budgeting is a significant shift to ensure we consider the climate impact of every budgeting decision we make, and a process to bring our climate ambitions to life.

We’re drawing on Oslo’s experience as the pioneer of this approach, which reduced the city’s emissions by 30 per cent between 2009 and 2021 despite a population increase of more than 100,000.

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In July 2022, London was the first megacity to incorporate the concept of climate budgeting into its budget guidance for 2023-24, spelling out for the first time how the Greater London Authority’s planned expenditure of over £16bn would be linked to the commitment to make London’s government operations net zero by 2030.

Similarly, New York City will be the first big city in the United States to implement climate budgeting. New York City oversees a multi-billion-dollar capital portfolio that shapes its buildings, transportation, recreational spaces, energy supply and infrastructure. We will use the climate budgeting process to equitably achieve net-zero emissions citywide by 2050 and bolster resilience to extreme heat, intense rain and coastal flooding. As outlined in PlaNYC: Getting Sustainability Done, we’ll launch our first climate budgeting cycle in 2023 and publish our first annual Climate Budget document to demonstrate our progress with the city’s budget in 2024.

We’ve already made great strides in greening our cities: the planned expansion of the Ultra Low Emission Zone (Ulez) into outer London boroughs will ensure that five million more people can breathe cleaner air, in addition to the four million Londoners covered by the existing Ulez zone, and will achieve further important reductions in carbon emissions. London’s planning policies are making sure new developments save 50 per cent more energy than national building regulations require and drive the uptake of renewable technologies such as heat pumps.

In New York, we are implementing the groundbreaking Local Law 97, which requires large private buildings to reduce their emissions and will drive a once-in-a-generation investment in New York City’s clean energy economy. We’re also electrifying boilers in public schools, prioritising schools in environmental justice neighbourhoods, communities disproportionately harmed by pollution and other environmental ills. Climate budgeting will look like this – decision-making that is informed and forward-looking.

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As proud members of the C40 global network of mayors, we are committed to taking urgent action to confront the climate crisis. This means changing the way we make decisions, demarcating clear roles and responsibilities, and prioritising the budget for immediate, cost-effective action as part of a joint effort.

What we’ve learned is that a climate budget is universally applicable, flexible and adaptable and can accommodate any policy instrument, at any scale. The work we are doing can serve as a model for other cities and countries.

Climate budgeting is a powerful tool for decision-makers. In our cities, it will help us efficiently and transparently manage climate actions, ensuring that they are identified, prioritised, and costed, and impacts are measured and reported.

It’s pushing us as leaders to show how city governments will deliver, month by month and year by year, on our longer-term climate targets, and champion bolder action today.

From more intense heatwaves to more catastrophic storms, the devastating effects of climate change are already being felt in our cities and across the globe. The impact and cost of these extreme weather events will continue to mount, which means we cannot afford to delay.

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