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Which EU policy for smart cities?

January 28th, 2011 by Leonardo Meeus, Florence School of Regulation

Currently, about four out of five Europeans live and work in a city, with the share of energy use in cities being about the same. A global solution for climate change, even if achievable, would rely on the participation of these citizens so that it is essential to have policies at multiple levels, including at city level. Therefore, if the EU is to meet its energy and climate objectives, cities will need to become “smart”.

What makes a city smart?

The term “Smart City” is commonly used, and depending on the sources, the term is associated with friendliness towards the environment, use of information and communication technologies as tools of (smart) management, or sustainable development. With regard to the achievement of the EU energy and climate objectives, cities can be “smart” in three ways (see figure below).

• 1// cities are actors themselves that can lead by example, e.g. public buildings and public procurement at the local level.

• 2// cities are policy makers that can govern the actions by private actors, e.g. via building codes, city entrance or parking charges, and land-use regulations.

• 3// cities are coordinators that can conceive and manage the implementation of an integrated approach, e.g. by working with urban infrastructure service providers and promoting the use of innovative services.

Thanks to a combination of local circumstances and interventions by higher levels of government increasing the awareness of local governments, enabling action by local governments, or requiring action by local governments, several examples exist of city pioneers that have already implemented the different levels of city smartness.

What makes a city initiative smart?

A city initiative is smart if it 1// addresses the institutional disincentives of cities to act; 2// accounts for the heterogeneity of cities in Europe; and 3// harmonizes the reporting methodologies that are currently being used by city pioneers.

1// Cities’ institutional disincentives

Cities have institutional disincentives to take action, which can be simplified into “not in my term” and “not my business”. And if they do take action, cities are confronted with private urban actors that are reluctant to follow. Considering that most of the initiatives part of the Strategic Energy Technology Plan and the European Economic Recovery Plan are already focusing on addressing the reluctance of actors to research, develop, and demonstrate sustainable measures, the Smart Cities Initiative fills a gap by focusing on city authorities as institutions and support them to become institutions that will accelerate rather than slow down the uptake of sustainable measures in the urban environment.

2// Heterogeneity of European cities

European cities are heterogeneous in their fundamentals that determine the consumption of energy services in a city and the associated emissions (e.g. the urban form, the climatic zone, the availability of local natural resources and the socio economic conditions); their political economy (e.g. presence of a harbor, heavy industry, or car manufacturing industry); and their institutional capacities (i.e. human and financial resources, and legal and regulatory powers), which depend on the size of the city and on the multi-level governance structure the city is subject to.

It is therefore not enough to support existing pioneers for what they are already doing. The Smart Cities Initiative should encourage existing pioneers to conceive and implement integrated approaches, for instance combining city-scale infrastructure demonstrations that enable a smarter use of energy with actions by city authorities to ensure the use of the associated services (third level of city smartness), while the initiative should also support cities in clusters of groups of European cities where pioneers have not yet emerged.

3// Reporting methodologies

With the Covenant of Mayors, Europe is successful at voluntarily committing cities to follow an integrated approach using a common methodology to reduce their carbon dioxide emissions with 20% by 2020, but this is only for cities that are willing to move, and the methodology allows cities to maneuver in how they measure and report progress so that it is difficult to compare performance and derive good practices.

It is a known problem that cities use different approaches in defining what sectors to include in their reporting, in establishing the city boundaries, as well as in aggregating data so that it is difficult to compare cities and replicate their achievements.


Despite differences across the EU in institutional capacities, local governments currently have in common that they are not yet using their capacities, as they have institutional disincentives to act towards a more sustainable future. While if they do act, they might be confronted with urban actors that are reluctant to follow.

We then recommend that a portfolio of smart cities should be carefully selected and supported by the Smart Cities Initiative: to increase the excellence of the current pioneers, while also giving opportunities to groups or clusters of cities with a promising potential, but where pioneers have not yet emerged.

We also recommend establishing a strict performance reporting methodology, which would allow the creation of a good-practice forum or register. An EU level legislative initiative to require all cities to report about their progress or lack of progress would later improve the impact of the initiative. This would allow cities with a large potential that are not yet moving to be identified.

Leonardo Meeus, Erik Delarue, Jean-Michel Glachant, Florence School of Regulation (European University Institute)

Note: This post is derived from THINK project report (funded by EU’s 7th framework programme).

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