Accelerating city transitions

EIT Climate-KIC partner Dark Matter Labs is exploring the role ‘dark matter’—the invisible structures and infrastructures that shape our systems, like regulation, procurement, contracting and financing mechanisms—must play in driving city transitions. Read on for a lightly edited extract from Dark Matter Labs’ original blog post detailing insights gleaned from its collaboration with EIT Climate-KIC’s Healthy, Clean Cities Deep Demonstration, and much more.

Looking back and forward on our work in cities

Dark Matter Labs has found itself involved in several collaborations where efforts to transition society in response to technological revolution and climate breakdown look to the city as a critical problem-space and tangible unit of change. From this work, including the development in 2019 of our Micro-Massive urban transition thesis with UNDP and EIT Climate-KIC and our involvement in the latter’s Healthy, Clean Cities Deep Demonstration, we’ve cultivated a deeper understanding of the critical role ‘dark matter’—the invisible structures and infrastructures that shape our systems, from regulation and procurement to contracting and financing mechanisms—must play in driving transitions in cities.

For example: How cities finance their transitions will be crucial in ensuring capital best serves the future, both in terms of what they invest in and how they invest. Dark Matter Labs has been working with partners across North America and Europe, including EIT Climate-KIC, to explore how the transition capital embedded in the coming Green Deals can be best deployed. As cities will be significant recipients of transition capital over the coming decade, they must develop new financial instruments that enable long-term investment; new mechanisms to capture and share the multiple spillover effects and value flows of a climate investment strategy, like better health and jobs; and new public governance models capable of limiting rent-seeking incentives traditionally structured into investment propositions. In short, we need to re-code capital so it privileges the shared public value of transition investment.

Why cities — revisited

These experiences and reflections have pushed us to refocus on the why, what and how of city transitions. Of all the problem and opportunity spaces our world has to offer, why do we choose to ‘lean into’ cities?

We’re seeing more and more clearly the urgent need to enable the deep institutional shift from incrementalism to transformative change. Cities are expressing that they see the need to accelerate this shift—but it is evident they currently struggle to provide the conditions for this to happen. They want systemic change—but can they change their systems? Siloed organisations; analogue-era regulatory approaches; resistance to policy-making that actively shapes markets; limited capabilities in blended finance and multiple outcome accounting; underdeveloped local innovation ecosystems; and rudimentary infrastructures for collaborating with citizens are just some of the critical institutional capacity gaps present in cities. At the same time, the Deep Demonstration in Healthy, Clean Cities has seen emergent progress in many of these fields: From Vienna’s success in bringing together a remarkably large number of departments around its decarbonisation agenda employing ‘ T-shaped’ team members to connect opportunities, to Amsterdam’s dynamic outcome-based regulation aspirations for last-mile logistics, cities are starting to embrace pathways to action that can match the ever-more ambitious target-setting.

What’s at stake?

Of course, institutional capacity is just one side of the equation. The other is where it takes us. Directionality matters. Intentionality matters. Values matter. So what are we trying to achieve with our work in cities?

At Dark Matter Labs, the aspirations of city transitions is to create a thriving urban everyday life with radically improved standards of civic agency and the opportunity for human flourishing afforded to all, within planetary boundaries, and alongside a regenerated natural realm. We see this manifesting across a range of domains and lived experiences in cities and peri-urban areas.

In the near and now, we aspire for ‘cities-as-commons’—places where participatory governance of civic assets shape our communities, public spaces and local economy. New institutional tools, such as multiple-level climate contracts and civic endowments for shared infrastructure and innovation investment, are building blocks for this. We see cities as carbon positive urban environments—not just because of decarbonised homes and transport, but also with vast urban nature capable of turning concrete jungles into their very own carbon sinks. We aspire for ‘caring cities’—places that privilege and properly invest in wellbeing and empathy, but also shared learning and active participation in deep democracy.

How might we get there?

As we’re often reminded, it’s not enough to have a clear case for change and a compelling vision for how things can be different. This is particularly true in the uncertain, complex and emergent times in which we live. So if there is no clear linear pathway to unlock such a city transition, how do we proceed?

Our thesis at Dark Matter Labs is that there are a set of key ingredients we must start with.

Strategic risk and future liability

A new relationship with foundational risk and liability at the urban level can have a ripple effect on some crucial practices that define the trajectory of cities, perhaps most profoundly in how we move towards strategic investment portfolios inextricably linked to the transitions we pursue. We are exploring a range of instruments and financial models such as smart and tradable perpetual bonds that can amplify the capacity of public sector and other public interest actors to raise capital for long term multiple outcome interventions; urban-scale carbon sequestration certificates as a pathway to broader ecosystem services investment certification; and a Settlement Risk-Innovation Facility to enable systemic innovations to resolve key liabilities (e.g. urban air pollution) with solutions that can only be proven over time.

Portfolios of interconnected interventions

As cities make this shift towards more co-beneficiary investment strategies, the necessity of a portfolio of interconnected interventions becomes clear. EIT Climate-KIC’s 2019 strategy document Transition, in Time lays out how, in the context of uncertainty, a portfolio approach is essential to discover options and pathways. What we have seen over the last year and a half working with EIT Climate-KIC and a range of other partners in fifteen cities across Europe is how the portfolio of interventions need to focus both on domain-based and on transversal approaches. The two intertwine to recognise the complex and adaptive nature of systems, but also to generate systems learning and mark out possible transition pathways, rather than seeking to simply validate whether a single point intervention has impact or not.

Read the full blog post on Dark Matter Labs’ Medium account.