Inter-municipal Cooperation is the key to better environments in our cities.

Victor Osei Kwadwo

The 2021 United Nations Climate Change Conference (COP26) aims at “Uniting the World to Tackle Climate Change”. While the technical aspects to addressing climate change is more evident in the goals of COP 26, it is time attention is equally paid to the governance of climate change at the metropolitan scale made up of our major cities.

Due to rapid urbanization, the world is increasingly becoming metropolitan. Cities have expanded outwards and have become more interdependent with their immediate peripheries. Cities occupy only approximately 2% of the world’s total land yet host 54.5% of the world’s population. Cities are responsible for 70% of the world’s GDP, over 60% of global energy consumption, 70% of global greenhouse gas emissions, and 70% of global waste.

As cities agglomerate, the footprint and interdependence within and between cities blur existing administrative boundaries to the extent that development issues in one local government jurisdiction have spillover effects on neighbouring jurisdictions. These spillover effects have led to a call for cooperation on functional grounds, making metropolitan areas a salient scale for public policy interventions. Metropolitan areas such as Cape Town, London, Mexico City, São Paulo and Tokyo are mainly characterised by densely inhabited functional urban areas and their surrounding interconnected lower-density areas.

In the management of metropolitan areas, for instance, many cities in the USA, Greater London, Brussels, Dar es Salaam and Greater Accra, the joint provision of metropolitan-wide services or jointly addressing a cross-boundary problem is an explicit choice of local governments that make up the metropolitan area. This voluntary nature of cooperation poses a collective action dilemma when local governments have to address problems jointly.

The dilemma arises from the externalities of environmental outcomes that drive low incentives for cooperation and a high risk of free-riding. To find joint solutions to cross-boundary problems in metropolitan areas, inter-municipal cooperation (IMC) is identified as critical for better economic and environmental outcomes in service delivery. There is empirical evidence that inter-municipal cooperation saves costs but does it also improve environmental outcomes?

Governments tend to be reluctant to cooperate when environmental outcomes are at stake, and this is partly due to the limited evidence on the impact of cooperation on environmental outcomes. It is therefore important to provide an evidential basis on which local governments can justify and initiate cooperation arrangements to address environmental concerns jointly.

In a study I co-authored with Tatiana Skripka, we provide this evidence using data covering 229 metropolitan areas in 16 OECD countries. The study tests the impact of cooperation in transportation on CO2 transport emissions. We did this by estimating a three-level mixed-effects model that takes into account both national and metropolitan-specific characteristics.

The results demonstrate that if local governments cooperate, better environmental outcomes can be achieved. Metropolitan areas that worked together on transportation issues were able to reduce CO2 transport emissions.

The findings give an indication of what needs to be done to effectively fight the environmental challenge. More significantly, beyond normative predictions, the findings provide a basis for local governments to justify and pursue local to local partnerships to address environmental issues.

What we measured

We used “working together on transportation” as a measure of cooperation and “CO2 transport emissions” for environmental outcomes to estimate the impact of cooperation on CO2 transport emissions reported in 2000, 2005 and 2008 for 229 metropolitan areas in 16 OECD countries.

We accounted for factors such as the year of observation, economic status, socio-cultural, geographical, technological and governance measures such as mitigation policies, enforcement, and metropolitan structure. The factors covered both the national and metropolitan area-specific characteristics: socio-cultural conditions, level of technology, geography, and metropolitan governance structure. We used data from the OECD metropolitan governance database, the OECD Metropolitan Governance Survey, the World Bank, among others.

Key findings

We found that metropolitan governance structures, whether fragmented or consolidated, are equally inefficient in delivering reduction in CO2 transport emissions. The finding contrasts with an increasing trend of scholars advocating for fragmented metropolitan structures that favour voluntary cooperation, compared to consolidated structures that address collective action problem through coercion.

We also found that countries with a higher GDP were more efficient in reducing CO2 transport emissions. In contrast, metropolitan areas with higher GDP recorded increases in CO2 transport emissions. While national funding can dictate climate-related interventions and standards, metropolitan wealth is more flexible in taking on such obligations. As metropolitan areas are mainly production centres, investments in environmentally-friendly interventions may be more easily sacrificed at the metropolitan level for economic gains.

We further found that CO2 transport emissions increase despite the mere presence of environmental mitigation policies. This is consistent with empirical observations. For example, while the Paris Agreement has 196 Parties adopting to limit global warming to less than 2 degrees Celsius, emissions have continued to rise globally by 1.4 per cent per year on average since 2010. Environmental policy effectiveness lies in the ability of the cooperating parties to ensure widespread policy implementation and enforcement.

The crucial factor explaining the reduction of CO2 transport emissions in metropolitan areas is inter-municipal cooperation that facilitates coherence and widespread enforcement of mitigation policies. The impact of cooperation on CO2 transport emissions is magnified in metropolitan areas within countries that have stringent environmental mitigation policies.

Next steps

Inter-municipal cooperation (IMC) is critical in the governance of metropolitan areas if better environmental outcomes are to be achieved in our cities. Cooperation ensure policy uniformity, facilitates the possibility of widespread enforcement and reduces incentives for free-riding irrespective of governance structure. It is recommended that scholars and policymakers emphasise how to incentivise effective cooperation regardless of the metropolitan governance structure. Also, efforts must be geared toward uniform mitigation policies and their subsequent enforcement across local jurisdictions in metropolitan areas.

Read the full paper here

https://www.tandfonline.com/doi/full/10.1080/03003930.2021.1958785

Victor Osei Kwadwo is a PhD fellow in Economics and Governance at UNU-MERIT and Maastricht University. He has broad expertise in political science, economics, and public policy with a special emphasis on urban governance and development. For his PhD, he explores how and why independent local governments cooperation arrangements emerge to address transboundary issues in metropolitan areas.

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