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5 Actions Cities & Entrepreneurs Can Take in 2016 to Bring COP21 Home

David Zipper

Managing Director, 1776

Geraldine Ide Gardner

Director, Urban and Regional Policy, German Marshall Fund of the United States

Emily Yates

Program Officer, German Marshall Fund of the United States

Last month in Paris, the United Nation’s COP21 climate negotiations ended with unanimous approval of a landmark agreement to limit global temperature rise to 2 degrees Celsius. While diplomats were negotiating the terms of the agreement, city leaders signed their own declarations signaling that they too are ready to act.

COP21’s Paris Agreement is a tremendous opportunity for entrepreneurs working in cutting-edge fields like electric vehicles or building-emission management. Public and philanthropic sources have pledged billions of dollars to support climate innovation, but no one knows — yet — how that money will be spent.

Will a new city-subsidized venture capital program mandate a minimum company size to apply? Will a city limit its clean energy program to local startups, or will it invite those from elsewhere to compete on a level playing field? A savvy entrepreneur will want to weigh in early and strategically to help local governments develop their answers.

With that idea in mind, here is a five-point COP21 to-do list for the new year, designed for both startups and cities. It offers a starting point for any mayor or entrepreneur ready to step up and help implement the 2015 Paris Agreement.

1. Figure out whether your city’s leaders have already voiced a commitment to combat climate change.

While the 2015 Paris Agreement understandably dominated headlines after COP21, there was another important accord reached at the same time: the Paris City Hall Declaration, signed by over 1,000 local and regional leaders from around the world. The declaration goes even further than COP21, such as requiring that cities either transition to 100 percent renewable energy or reduce greenhouse gas emissions by 80 percent by 2050.  Clearly, many city leaders are going to need tangible proposals to meet their goals — and they will need them fast.

For entrepreneurs targeting specific cities, it’s a good idea to do some research to determine whether local leaders have already shown enthusiasm for reducing climate change (and mayors, you want to be on those lists!). Here are a few places to check:

Compact of Mayors: Launched in 2014, the UN-affiliated Compact of Mayors is a coalition of 441 cities pledging to address climate change by reducing their greenhouse gas emissions.

International Council for Local Environmental Initiatives (ICLEI): Headquartered in Bonn, Germany, ICLEI is a network of over 1,200 municipalities worldwide that are committed​ to building​ a sustainable future. Roughly half ICLEI’s members are located in the U.S.

Energy Cities: This association of the European Union includes 30 cities committed to sustainable energy.

C40 Cities Climate Leadership Group: C40 is a prominent, global network consistent of 83 the world’s megacities committed to addressing climate change. The website includes many local initiatives within each city.

2. Decide what kind of “policy carrot” or “regulatory stick” you want your city to adopt.

As government officials implement the 2015 Paris Agreement, there are two ways they can incentivize behavior. If governments want to play nice, they can offer innovative companies “carrots” in the form of cash grants, below-market loans, or publicly funded venture capital in order to lower their costs of doing business. But that costs money.

A cash-strapped government may prefer to push costs toward the private sector through the “stick” of regulation, such as a tax on coal or a stricter car emissions mandate. Either way, the private sector is now incentivized to invest more in clean energy than it would otherwise.

If you are an entrepreneur, this framework can guide you toward specific recommendations for city leaders committed to combating climate change. For example, European startups like PlugSurfing and American ones like EverCharge stand to gain from increased adoption of electric vehicles. Each could benefit from a “carrot” in the form of local tax credits for new electric car buyers or from a “stick” that requires new commercial and residential buildings to be equipped with excess power capacity to serve future electric vehicle owners.

3. Keep an eye on non-traditional funding sources.

While many smart cities’ startups are accustomed to soliciting government for funding, the enthusiasm arising from the 2015 Paris Agreement may open new channels. For example, the UN has created the Green Climate Fund to help developing countries address climate change challenges, and the fund could offer grants and investment opportunities for startups ready to operate within those nations.

Philanthropists are showing growing interest as well: 26 billionaires including Mark Zuckerberg and Bill Gates established the Breakthrough Energy Coalition, a fund to support and accelerate innovation in the clean energy sector. There were so many funding announcements in Paris that the UN’s Framework Convention on Climate Change created a graphic to create a snapshot of diverse funding sources and funds.

It is too soon to know what these funding commitments mean for startups, but city leaders and entrepreneurs would be wise to keep a watchful eye.

4. Identify a group of entrepreneurs who care about climate change and are ready to help.

Many urban leaders will spend 2016 devising new policies, regulations, and programs to promote sustainability and mitigate climate change. Are there local clean energy or urban mobility entrepreneurs who can design initiatives to ensure startups respond in the intended ways? Plugged-in entrepreneurs can also help disseminate information about new city programs across national and even global startup networks that public sector leaders could not otherwise access.

If you don’t know whether such startups exist in your city, now is a good time to find out. Draw inspiration from the London Mayor’s Office, which created an interactive mapping tool that includes over 90,000 startups within the city. Such lists and maps can also be assembled at the grassroots levels, as has happened in cities like Baltimore and Austin.

5. Roll out the welcome mat for smart city startups.

For entrepreneurs to launch innovative products with your city, they need to first feel confident that they can easily set up shop and operate successfully. Take a hard look at your local agency and regulatory infrastructure and see if your city is ready to roll out the welcome mat to attract new startups.

Is the business registration process so cumbersome that startups have to hire outside help to navigate it? Are procurement rules unknowingly turning off entrepreneurs from bidding on contracts, perhaps because the selection criteria are too opaque or city payment processes take too long? Is there an office — or at least a person — responsible for making it easier for startups to do business in your city?  Many cities like Amsterdam, Louisville, and Pittsburgh have created chief innovation officer positions with this goal in mind.

The honest appraisal of local entrepreneurs can be very valuable here. For city leaders, now would be a great time to solicit feedback from your city’s startups.

Looking Ahead

Even if implementation of the Paris Agreement proves to be hugely successful, global temperatures are expected to continue rising. The challenges of climate change are intractable, and the urgency to address them will only grow —especially in vulnerable cities like Virginia Beach and Rotterdam.

To quote Anne Hidalgo, the Mayor of Paris, “It is not enough to just fix the problem; we must aim for a different model.” The world’s entrepreneurs are the most suited and comfortable to “different models.” If Mayor Hidalgo’s words aren’t a call to action for city leaders and startups alike in the wake of COP21, we aren’t sure what is.

David Zipper

Managing Director, 1776

David Zipper leads 1776’s work in the Cities and Transportation sectors, including venture investments into startups as well as strategic relationships with corporations, associations, and local governments worldwide. Prior to…

Geraldine Ide Gardner

Director, Urban and Regional Policy, German Marshall Fund of the United States

Geraldine Ide Gardner is the director of GMF’s Urban and Regional Policy (URP) program, where she leads the program’s transatlantic initiatives to convene policymakers and practitioners from U.S. and European…

Emily Yates

Program Officer, German Marshall Fund of the United States

Emily Yates is a program officer in the Urban and Regional Policy program and manages the Sustainable and Livable Cities programming.

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