Scientific urgency meets urban responsibility
The science is clear: human activity is pushing Earth's systems beyond critical planetary boundaries, with climate change representing one of the most urgent threats. The Paris Agreement calls for limiting global warming well below 2°C, aiming for 1.5°C. Achieving this requires rapid, deep, and sustained reductions in greenhouse gas (GHG) emissions across all sectors. Cities, as hubs of population and economic activity, are central to this challenge, and their built environment – buildings infrastructure and their embedded and operational emissions – account for nearly 40% of global energy-related CO2 emissions. Simply put, we cannot address the climate crisis without transforming how we plan, build, and operate our cities. Furthermore, cities may have a legal obligation to take action to reduce emissions owing to national commitments - even when there is no explicit law saying they have to - and risk legal challenges if they don’t.
For decades, policy has focused on improving efficiency through performance standards – setting targets for energy use per square meter or emissions per capita. While valuable, this approach has a fundamental flaw: it doesn't guarantee absolute reductions. A city could be constructed out of highly efficient buildings, yet if construction booms and sprawl continues unchecked, its total emissions can still rise, pushing us further away from climate safety. It is akin to celebrating a fuel-efficient SUV while ignoring a growing fleet of large vehicles; individual performance improvements don't always translate to better aggregate outcomes. We need a mechanism that directly addresses the cumulative limit of emissions the atmosphere can tolerate, in other words, we need absolute carbon budgets.
Empowering Local Governance Through Carbon Budgets
An absolute, science-based carbon budget sets a finite cap on the total GHG emissions permissible over a specific period, consistent with climate goals. It shifts the focus from rate of emissions to the total quantity, aligning policy directly with climate science. Integrating these budgets into urban governance moves climate action from a peripheral environmental concern to a core administrative function, often best managed alongside financial budgets, as pioneered by cities like Oslo.
This integration empowers decision-makers at all levels by providing clear boundaries. It operationalizes the principle of subsidiarity, giving devolved departments and agencies the steering tools – the emission limits – needed to manage their impact effectively within the city's overall cap.
Crucially, a budget forces explicit trade-offs. Should we demolish and build a new, highly efficient structure, or refurbish the existing one, saving significant embodied carbon? What materials offer the best balance between performance, cost, and lifecycle emissions? Should investment prioritize new road infrastructure or integrated public transport and active mobility solutions? A carbon budget framework that covers the whole life cycle of activities brings these choices, and their climate consequences, to the forefront of decision-making.
Furthermore, budgets incentivize system-level thinking that simple performance standards often miss. They encourage integrated design concepts that yield greater savings - and that have long been part of progressive planning orthodoxy - such as planning for compact, mixed-use development to reduce transport needs and infrastructure costs and impacts. Strategically incorporating nature-based solutions, like urban forests and green roofs, not only sequesters carbon but also reduces building energy demand for cooling. The most significant savings are often locked in early – decisions about land use, infrastructure placement (avoiding complex groundwork), and prioritizing refurbishment over new builds have profound, long-term emissions implications that a budget framework helps illuminate.
Cities Leading the Charge: The Rise of Shadow Budgets
In the absence of comprehensive national carbon budget frameworks, many forward-thinking cities have taken the initiative, creating their own 'shadow budgets'. Oslo is a prime example. By integrating an annual climate budget into its financial processes, the city holds departments accountable for the emissions impact of their activities. This has driven tangible policies, such as ambitious targets for zero-emission construction sites (becoming mandatory for public projects), promoting material reuse through dedicated platforms, and investing heavily in sustainable transport. These city-level actions demonstrate the feasibility and power of carbon budgeting, even when higher levels of government lag behind.
Challenges and considerations for implementing carbon budgets.
Implementing carbon budgets, however, is not straightforward. One critical question that consistently returns is: how do we allocate the budget fairly? A common technical approach involves downscaling a global budget based on metrics like population and then disaggregating it by sector based on historical emissions. While seemingly logical, this process is inherently political and distributing a finite resource “the right to emit'” raises profound questions. Furthermore, approaches based purely on historical emissions (grandfathering) tend to reward historically high emitters. This potentially locks in existing inequalities, for example between western and non-western countries but also between sectors that have had large caps. For the built environment, which has long contributed significantly to operational emissions, this is a critical concern. What constitutes a 'fair share' should consider both historical responsibility, capacity to act, and basic development needs.
These challenges might explain why many jurisdictions currently opt for setting overall and sectoral reduction targets (e.g., a percentage reduction goal for the city and its subsectors) rather than implementing multi-sectoral budget caps. This leaves sectors to devise their own pathways. However, this approach obscures that cross-sectoral trade-offs are possible and perhaps necessary when resources – financial, material, and temporal – are limited.
Collaboration for Climate Action
Despite the challenges, carbon budgets offer a robust framework for aligning urban development with climate science. They provide a necessary compass for navigating the complex transition to a decarbonised built environment, forcing systemic thinking and making climate impacts tangible in everyday decision-making. Their successful implementation hinges on strong governance, sustained political will, multi-level coordination, robust data, and an unwavering commitment to equity.
