Public-private partnerships must be replaced by public-community collaborations for wellbeing and the climate.
In July 2021, the European Commission presented its plan to deliver the European Green Deal (EGD). The commission envisages the transformation of the European Union into ‘a modern, resource-efficient and competitive economy’, while ensuring greenhouse-gas emissions are reduced to net-zero by 2050, economic growth is decoupled from resource use and ‘no person or place will be left behind’.
The EGD puts heavy emphasis on private-sector financing, encouraging large-scale climate investments which channel financial flows. It thereby relies on the failed model of public-private partnerships (PPPs), socialising the risk of climate investments while privatising the gains.
By the same token, it falls short on investing in communities and recognising the vital role of public investment and planning in the energy transition. The policy-makers tend to overlook the important contributions municipalities and community organisations are making to reduce emissions in real terms—from the introduction of more climate-friendly urban transport to house retrofitting programmes in their towns.
The 40-year neoliberal experiment (compounded by the austerity of the last decade) was long enough to prove in Europe that not only are PPPs more expensive but they require the sacrifice of transparency on the altar of ‘commercial confidentiality’. They also atrophy public-sector capacity to co-ordinate public policies, from climate to social exclusion.
According to the Transnational Institute (TNI) database of de-privatisation of public services, these are the top reasons why local authorities are abandoning PPPs and bringing services back in-house. To date, there have been 1,556 successful de-privatisations.
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Public-community collaborations
We need radically to rethink our approach and a new paradigm should simultaneously address climate safety and social equality. Public commitment and financing are starting points and municipalities can partner with local residents and organisations, instead of global consultants and private investors.
Public-community collaborations are innovative approaches to co-produce ideas and policies or jointly deliver public goods and services. They allow exploration of democratic forms of public provision, underpinned by the core principle of empowering communities to address the complex social and ecological challenges of today. TNI’s recent report examined 43 public-community collaborations to understand how ownership, governance and finance work, scrutinising ten cases more closely.
Especially in energy, a great diversity as well as number of experimental collaborations can be found, tackling poverty and working against the climate crisis. Municipalities are better equipped than private energy monopolies to detect local problems and can find solutions, working together with communities on the ground. They can not only address challenges proactively but also commit to strategies for just transition.
Co-ownership in Wolfhagen
The collaboration between a citizens’ co-operative and the municipal government to produce renewable energy in the small town of Wolfhagen in Germany, following remunicipalisation of its grid from the multinational E.ON, provides an excellent example of co-ownership, co-financing and co-decision-making. The model has proved successful since 2005, when the co-operative, BEG Wolfhagen, purchased 25 per cent of the municipal energy company. Wolfhagen’s citizens were empowered through joint ownership to become co-decision-makers in energy production and supply.
Membership of the co-operative has since grown to 814 (7 per cent of the town’s residents) and working-class families reap the benefits of lower energy costs. Co-ownership of the local energy infrastructure means new financial resources are entirely retained within the community—to support local kindergartens, for example.
Through this public-community collaboration, Wolfhagen’s citizens also play an active role in the transition to 100 per cent renewable energy—a commitment made by the municipality in 2008. Local co-ownership of renewables is a vital component of a citizen-centred, just transition.
Involving citizens in Cádiz
Involving citizens to co-produce policies for a just transition can help municipalities understand their needs and give communities a voice in tackling the climate crisis. An outstanding example can be found in Cádiz in Spain, where the municipality responded to overwhelming calls for a 100 per cent renewable-energy model.
To involve its citizens seriously, the city set up two working groups, on energy transition and energy poverty. The mission of the first is to help transform Eléctrica de Cádiz, the energy company majority-owned by the city, into a 100 per cent renewable supplier. Its membership draws upon the local energy co-operative, environmental organisations, the University of Cádiz and Eléctrica de Cádiz.
The working group on energy poverty was given the finite task of designing a subsidy which the municipality provides to families facing financial challenges. The social-discount programme (Bono Social Gaditano) created by the committee offers financial relief and energy literacy.
These two working groups in Cádiz have kickstarted a process of participatory co-production of policy. They have allowed diverse groups—from the community, academia and others with technical expertise—to come together and work on local challenges to tackle the climate crisis.
Innovative solutions
Public-community collaborations have the power to throw up innovative solutions to the social and ecological challenges we face. They are living proof that public money invested in communities creates the change we need.
The EGD represents a historic opportunity. There is simply no time to repeat the mistakes of the past by over-relying on private-finance leverage and PPPs—or, relatedly, on overly-optimistic predictions about non-proven technologies, such as carbon capture.
Instead, precious public finance can be directly invested in local communities, facilitating real emissions reductions and just transition in the here and now. Cities and citizens can effectively work together to ensure no person or place is left behind.
Tackling the climate crisis can thus be transformed into a positive agenda of rebuilding communities for social wellbeing—with the values of solidarity, justice and democracy at its core.
Satoko Kishimoto is a co-ordinator of the Public Alternative programme in the Transnational Institute.
Louisa Valentin is a graduate student at Lund University, focusing on economic history and development in the global south. She is a freelance researcher and writer for the Public Alternatives programme at the Transnational Institute, where she works on economic and social justice, deprivatisation and remunicipalisation.