Multi-level finance impacts on participation, inclusion, and equity: Bricolage and Fuzziness in NextGenerationEU-funded renaturing projects

Environmental Science and Policy 156 (2024) 103753 Available online 6 April 2024 1462-9011/© 2024 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/bync-nd/4.0/). Multi-level finance impacts on participation, inclusion, and equity: Bricolage and Fuzziness in NextGenerationEU-funded renaturing projects Julia Neidig a , b , * , Isabelle Anguelovski a , c , Aitor Albaina d , Unai Pascual b , e a Institute for Environmental Science and Technology, Universitat Aut` onoma de Barcelona, Edifici ICTA-ICP, Carrer de les Columnes s/n, Campus de la UAB, Cerdanyola del Vall` es, Barcelona 08193, Spain b Basque Centre for Climate Change (BC3), Scientific Campus of the University of the Basque Country, Sede Building 1, 1st floor, Leioa 48940, Spain c Instituci´ o Catalana de Recerca i Estudis Avançats, Passeig Lluís Companys 23, Barcelona 08010, Spain d Department of Zoology and Animal Cell Biology, Faculty of Science and Technology, Universidad del País Vasco (UPV-EHU), Barrio Sarriena s/n, Leioa 48940, Spain e Ikerbasque, Basque Foundation for Science, Plaza Euskadi 5, Bilbao 48009, Spain ARTICLE INFO Keywords: Climate finance Multi-level governance NextGenerationEU funds Vitoria-Gasteiz Urban climate action ABSTRACT We analyze a multi-level ad-hoc emergency fund (MAEF) – the European NextGenerationEU program – as an opportunity to advance ambitious municipal climate action. Presently, MAEF follow a vertical complex governance structure, including strict timelines, evaluations, and competencies spread across policy scales, which condition local aspirations for transformative governance in terms of participation, inclusion, and equity. Drawing on qualitative data (interviews with key actors, participant observations, and primary policy and planning documents), we examine the implementation of NextGenerationEU-funded naturalization projects in Vitoria-Gasteiz, Spain, 2012 European Green Capital. We offer an empirical analysis of how MAEF requirements challenge locally formulated values of governance meant to advance civic participation, inclusion, and equity. Findings indicate that the municipal dependence on multi-level financing schemes represents a trade-off with local democratic governance, whereby the need for slow-er and finance-detached civic engagement processes clashes with EU requirements for rapid project execution. Here, civic contestation against the projects’ processes reveals some of the core emergency funds governance weaknesses: a) a bricolage approach at the expenses of democratic governance, to ensure successful applications for climate finance projects and b) a fuzzy process without transparent communication of project selection and implementation. However, findings also reveal that the municipality failed to build up participation, inclusion, and consideration of social equity goals upstream, before and outside the context of MAEF. This reality calls for local decision-makers to develop more transparent governance models that help build up civic support when projects are in their early conception stage. 1. Introduction In May 2020, the European Commission released its recovery plan to boost its member states out of the COVID-19-pandemic, the so-called NextGenerationEU (NGEU). Only a few months later, Spain received notice of being disbursed 77 billion Euros in direct transfers and up to 140 billion Euros in loans, to finance national projects aligned with the European Green Deal to be executed by December 2026 (European Parliament, 2023). In July 2022, the then-mayor of Vitoria-Gasteiz, proud 2012 European Green Capital, declared “Today Vitoria-Gasteiz has earned again an endorsement from Europe. We are on the right track to become a European supercity, we are on the train of Europe, and we want to take advantage of it” (City-hall Vitoria-Gasteiz, 2022a), after having secured nearly two million Euros of Spanish NGEU funds for naturalizing one of its core mobility axes. As urban climate change adaptation and mitigation projects get rolled out under multi-level climate finance (Causevic and Selvakkumaran, 2018), including smart or low-carbon infrastructures, energy retrofitting of buildings, or renaturing programs, questions emerge as to the equity and justice impacts of financed interventions and governance processes (Knuth and Krishnan, 2021; Smeds and Acuto, 2018). In this rather fast-paced technocratic process, municipalities seem indeed to have little margin to develop inclusive, democratic, and socially innovative governance models that advance local climate action without * Corresponding author at: Basque Centre for Climate Change (BC3), Scientific Campus of the University of the Basque Country, Sede Building 1, 1st floor, Leioa 48940, Spain. E-mail address: [email protected] (J. Neidig). Contents lists available at ScienceDirect Environmental Science and Policy journal homepage: www.elsevier.com/locate/envsci https://doi.org/10.1016/j.envsci.2024.103753 Received 10 October 2023; Received in revised form 29 February 2024; Accepted 28 March 2024 Environmental Science and Policy 156 (2024) 103753 2 replicating multi-scale inequalities (Colenbrander et al., 2017). In addition, projects operate on strict timelines, complex administrative rules, and build upon a green growth narrative that has been shown to leave equity and inclusivity considerations aside (Garcia-Lamarca et al., 2021). The NGEU embodies a multi-level climate finance tool embedded in the context of the global rupture of the COVID-19-pandemic. Due to the high financial volume and quick disbursement of funds, those multilevel ad-hoc emergency funds (henceforward: MAEF) offer municipalities with tight budgets the sudden opportunity for immediate implementation of cost-intensive, transformative climate action towards lowcarbon and resilient cities (Crescenzi et al., 2021). Being integrated in a vertical administrative structure of competencies, from the European to the municipal level, they however require complex decisions over fund distributions, interventions being filtered by different government scales, and an efficient apparatus of multiple public and private actors allowing for a multi-level operationalization (Kern and Bulkeley, 2009). Despite their high potential for a broad-scale impact, MAEF are formulated around values of governance that condition or may even contradict local aspirations for transformative governance processes. We thus ask: To what extent do multi-level ad-hoc emergency funds allow for civic participation, inclusion, and equity in urban climate action? We embed our analysis in the critical body of literature that disentangles the role of nested green finance schemes in achieving inclusivity in local governance (Westman et al., 2019; García-Lamarca et al., 2022). The novelty, uniqueness, and financial volume of MAEF, such as the NGEU, make it particularly important to understand how they condition action on the ground. We hence contribute important insights on the impacts of such ad-hoc and vertical financing instruments on local climate action and governance. We follow two urban naturalization projects being implemented as of the beginning of 2024 in Vitoria-Gasteiz, a mid-sized city in the Basque Country, Spain, under the NGEU framework. Both projects aim for a naturalization of inner-urban public space yet follow different rationales to be eligible for NGEU funds. We chose Vitoria-Gasteiz as case city given its long-standing trajectory of greening efforts and participating in EU-led initiatives such as the Covenant of Mayors or the European mission of 100 climate neutral cities. The city has also attained international recognition for its successful climate actions (Kern, 2019; Neidig et al., 2022). We offer an empirical analysis of how MAEF challenge locally formulated values of governance advancing civic participation, inclusion, and equity in urban climate action. Prior to this analysis, we review the literature on equity and inclusion in multi-level climate financing, before contextualizing NGEU funds in multi-level governance processes. We then present our methodology and case study context of VitoriaGasteiz to help identify the dilemmas of MAEF for local democratic climate action. We pay attention to how civic-participation, inclusion, and equity are operationalized in the case study under the NGEU framework and analyze MAEF as a possible poisoned gift for local democratic governance. Lastly, we discuss our findings and call for a bricolage approach for funding to enable a shift from fuzzy towards more transparent and participatory processes. 2. Advancing urban climate action through multi-level governance and finance 2.1. Multi-level climate finance and the issue of achieving urban equity In the context of climate urbanism (Long and Rice, 2019), multi-level governance has shifted over the last few decades from hierarchical, top-down towards more horizontal and nested models, constituted by new networks of transnational and private actors (Bulkeley, 2005; Nielsen and Papin, 2021). This has seemingly attributed a higher degree of agency to municipalities to materialize locally innovative climate action (Cast´ an Broto, 2017). In this context, new forms of climate finance associated with projects falling under the broad umbrella of low-carbon transitions have allowed public agencies to advance projects difficult to finance through conventional public funding (Robin, 2022; Bracking and Leffel, 2021). Private climate finance increasingly offers public (credit-worthy) administrations access to financial markets by turning urban climate interventions into an investment asset for mostly private capital (Jones et al., 2020). By the same token, embedding public climate governance into private capital markets enables private investors to take advantage of rather minimal efforts undertaken to combat climate change (Long, 2021). Urban climate projects, whose objective is to increase societal resilience to climate-induced risks, are thereby being applied a logic of financial capture, which furthers an economic growth narrative of climate urbanism while hindering socially orientated actions aiming to reduce socio-ecological injustices accelerated through market logics (García-Lamarca et al., 2022; Hilbrandt and Grafe, 2022). Local climate action projects become then decontextualized, with the requirements of financial investors being prioritized over those resulting from local communities’ needs (Aalbers, 2020). In this context, an increasing body of literature focuses on so-called green bonds (Bracking, 2019), a debt instrument that offers low interest rates to the borrower, e.g., municipalities, and risk averse investments yet low return rates to the lender (Long, 2021; Jones et al., 2020). Projects financed through green bonds are meant to be labelled as “green”, either self-certified or relying on transnational certification schemes (Hilbrandt and Grubbauer, 2020). However, recent studies have shown that financed green interventions, contrary to their initial ambition to enable novel projects through daring investments, employ a business-as-usual “flashy” approach, paving the way for the greenwashing of conventional projects (García-Lamarca and Ullstr¨ om, 2022; Jones et al., 2020). In practice, the disbursement of multi-level (private) financial tools is also globally unequally distributed, as they require cities to be creditworthy which complicates access for especially Global South municipalities (Bigger and Webber, 2021; Robin and Cast´ an Broto, 2020). Internally, they have been shown to reinforce socio-economic exclusion within spatial boundaries of those cities successfully attracting private capital. For example, Christophers (2018) and Bigger and Millington (2020) found that drawing on green bond finance for novel transit and water infrastructures projects in Washington D.C., New York, or Cape Town has increased the burden of already vulnerable communities facing higher rates of public services through the need to produce financial returns for green bond investors. Such burdens call for the democratization of multi-level financing and governance processes, based on the values of transparency, accountability, and equitable and inclusive participation (Schalatek, 2012). 2.2. NextGenerationEU funds in the context of multi-level governance and finance The operationalization of NGEU differs from other conventional European multi-level funding schemes (e.g., EU Horizon, URBACT, or LIFE), by its significantly larger volume in form of a one-time payment, their strict timelines in the context of the COVID-19-pandemic and by decisions over project selection being highly political and strategic across policy scales (Crescenzi et al., 2021). With a budget of over 800 billion Euros, 723.5 billion Euros are being directly disbursed to EU member states (EC, 2023a). To be eligible for NGEU funds, by April 2021 each member state had to present a national recovery and resilience plan (henceforward: RRP) laying out pathways for an (economic) recovery from the pandemic. A minimum of 37% of each national RRP’s budget had to be dedicated to “green” projects and another 33% to the digital transition. Plans were ideally to be developed in collaboration with relevant sectors and contain actions with a final completion date of December 2026 and an overall aim for social and territorial cohesion and gender equality. In short, NGEU funds were sold as a win-win-win J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 3 situation “to boost jobs and growth, the resilience of our societies, and the health of our environment.” (EC, 2020). To finance NGEU, the European Commission became the largest issuer of green bonds aiming for a volume of up to 250 billion Euros dedicated to projects of the national RRPs’ green components with measures “compatible with internationally accepted social and environmental principles” (DG Budget, 2022) NGEU works under a vertical multi-level structure (Kern and Bulkeley, 2009). Member states are the official recipients of funds, yet they are then distributed according to the national RRPs to the regional and local scales, to both public and private sectors. To ensure efficient implementation and alignment of project goals with cross-territorial agendas, recipients must follow strict reporting, evaluation, and timeline guidelines (Dawidowicz et al., 2023). Some perceive this process as reinforcing neoliberal and technocratic governance dynamics since standardized project reporting consolidates institutional and private actors as evaluators and authority (Bracking and Leffel, 2021; Hilbrandt and Grafe, 2022). In this process, project credibility is depending on market mechanisms; thus, legitimizing a top-down governance approach (Hilbrandt and Grubbauer, 2020). In the case of Spain, the total of NGEU funds are distributed across ten policy levers divided into 30 components. Although municipalities are anchoring European green and digital strategies on the ground, once projects are executed, national level agencies are responsible for the adherence of local projects to EU policy goals (Spanish Government, 2021). So far, in the Spanish context, the impact of NGEU on local governance is only comparable to the 2009–2011 Plan-E (Spanish Economic and Employment Stimulus Plan), the governmental response to the 2008 financial crisis, which included the transfer of 8 billion Euros to Spanish municipalities to fight unemployment and increase infrastructure planning in a context of otherwise European austerity politics. Plan-E hence represented an unpredictable cascade of funds for cities as a free pass for any kind of project, yet also allowing for misuses of funds as evaluation processes were lacking (Carozzi and Repetto, 2019; Montolio, 2018). 3. Data and methods 3.1. Data collection and analysis We followed Charmaz’ (2006) Grounded Theory approach drawing on multiple data sources (Fig. 1): First, we used participant observation at six public events between 2022 and 2023, such as participatory and informatory sessions regarding both naturalization projects, city-hall organized conferences about its long-term green vision, and the 2023 European Conference of Mayors in Brussels. Second, in 2023 we conducted, audio-recorded and transcribed 14 semi-structured interviews with Vitoria-Gasteiz’ key informants, i.e., decision-makers, urban planners, and representatives of neighborhood associations with a history of involvement in local governance to explore the conflicting values being expressed in multi-level financial governance operations. Lastly, we conducted an analysis of policy documents on the city, regional, national, and European scale regarding the multi-level execution of NGEU funds and complemented those with local media articles concerning the two urban naturalization projects. We coded these three data sources as we collected them, using the software Nvivo. This process helped to continuously refine our initial research questions and data collection (Charmaz, 2006). Codes emerged around the context, history, and project phases of both naturalization projects; relationships between (non-institutional and institutional) actors; controversies surrounding the European finance and overall project framing; different values of governance across policy scales, including efficiency, equity, inclusion, green innovation/ experimentation, economic growth, multi-level administration; and framings of nature/- naturalization. After a triangulation of those different data sources, we narrowed the analysis on the challenges of local governance under a multi-level operationalization on equity, civic participation, and inclusion (see Fig. 2). 3.2. Case study context Following the 2012 European Green Capital award, Vitoria-Gasteiz successfully attracted competitive European funding, such as EU Horizon, Life+, and Interreg, that helped finance small-scale green infrastructure and mobility interventions. In addition, recent MAEF, i.e., the Spanish Plan-E, have enabled large-scale urban transformations, including a complete redesign of the public transport network through a comprehensive participatory process, and a pilot superblock (with a cost of five million Euros). Fifteen years later, NGEU funds are expected to have a similar impact, as the city has secured funds for multiple projects, such as the implementation of low-emission zones, pedestrianized areas, and a fully digitalized parking system. In this paper, we focus on two NGEU-funded projects that follow the same objective of greening public space yet are administered under different components of the Spanish RRP. The Los Herr´ an Street project aims for the naturalization of a main urban traffic axis and falls under the Spanish RRP’s second policy lever of resilient infrastructures and ecosystems and its component #4 of ecosystems’ conservation and restauration. The Old Town’s naturalization project through microgreening interventions belongs to the fifth policy lever of modernizing and digitalizing Spanish industries and its component #14 targeting the competitiveness of the tourism sector. Both projects are in neighborhoods with fewer greenspaces and lower ecological quality compared to the rest of the city (Aznarez et al., 2023) and were already part of the city’s 2014 Urban Green Infrastructure Proposal 1 (henceforward: UGIP) aiming for an inner-city green belt and network of green corridors. On paper, the UGIP builds on an inclusive governance approach, “requiring a consensus on [project] needs and associated benefits” through shared information, raised awareness, and widespread citizen participation as for design and implementation (UGIP 2014). Of great importance is the alignment of local green infrastructure projects with European biodiversity and climate goals (Maranon, 2020). 4. The Dilemmas of multi-level governance for local democratic climate action Our analysis of the deployment of large-scale EU funds in VitoriaGasteiz reveals the challenges of multi-level governance for building climate action in ways that can further local democratic practices. Next, we present the two urban naturalization interventions and their multi-level operationalization within the NGEU framework (summarized in Table 1). We focus here on how civic participation, inclusion, and equity are challenged by the nature of NGEU funds mobilized for the projects (Fig. 2). We use these three components of democratic local governance as our analytical lens to examine the conflicting visions of “green” embedded in the projects. We explore the tensions between institutional visions associated with shallower meanings of green (i.e., investing in aesthetic green elements) under an economic growth paradigm, and a vision of deeper socio-green transformations (e.g., the retrofitting of low-quality housing and health care services). We refer to civic participation as a process of involving noninstitutional actors such as neighborhood residents and collectives throughout the different phases of a given urban climate project, and of co-governance of the projects and associated plans (Listerborn, 2008). Inclusion refers to the recognition of residents´intersecting needs in the project designs, with specific emphasis on those historically marginalized in planning processes (Amorim-Maia et al., 2022; Calder´ on-Argelich et al., 2023) and to the plural meanings linked to a green 1 Original name in Spanish: documento de propuesta de la infraestructura verde urbana de Vitoria-Gasteiz J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 4 city (Neidig et al., 2023). Lastly, equity refers to the justice components of the projects, focusing on the consideration of broader socio-economic needs of urban residents in the naturalization projects (Anguelovski et al., 2020). We then deepen the analysis by examining the governance tensions embedded in those funds in which municipal dependency on MAEF translates into a bricolage approach driven by a fuzzy governance, e.g., through lacking transparent communication. 4.1. The challenge of civic-participation, inclusion, and equity in MAEF 4.1.1. Case 1. Naturalization of Los Herr´ an Street 4.1.1.1. Project context. Los Herr´ an Street is one of the city’s major South-North traffic axes. The project entails several green interventions, including mobility transformations (via traffic calming, pedestrianization, and prioritization of bike and public transport) and the implementation of urban green infrastructures (e.g., a multi-use park with play equipment, small forest and water areas, urban gardens and green corridors, and the recovery of an underlying stream for rainwater drainage and cooling system in heat waves). The project is framed in terms of climate change adaptation, local retail revitalization, and the provision of inclusive greenspaces while reducing inner-city traffic and associated emissions (City-hall Vitoria-Gasteiz, 2022b). Projects under the RRP’s second policy lever of resilient infrastructures and ecosystems fall under the Spanish Ministry of Ecological Transition and Demographic Challenge that transferred the management of urban naturalization and resilience projects to the governmental Fundaci´ on Biodiversidad (henceforward: FB), a national foundation campaigning and supporting projects to counteract biodiversity loss. FB is responsible for project selection and administration, ensuring that selected projects increase urban green infrastructure, through ecosystem restoration and reduced habitat fragmentation (BOE, 2021). Recipient administrations are encouraged to take charge of most project components inhouse, especially the implementation of the required participatory process. 4.1.1.2. Civic participation, equity, and inclusion. Early drafts of the Los Herr´ an Street project first appeared in the city’s flagship green strategies, including the 2007 Sustainable Mobility and Public Space Plan which proposed a city-wide implementation of “superblocks”. The project then became more specific under the 2011–2015 municipal government (led by the Spanish conservative Partido Popular) yet did not move forward due to the incapacity of securing funding. Only in July 2022 did the broader public, including the government’s opposition parties, became aware of the detailed new project. The institutional narrative of the project of the then-leading conservative Basque Nationalist Party (PNV) strongly marketed the initiative for its European NGEU funding as an opportunity to become a “European supercity” (City-hall Vitoria-Gasteiz, 2022a). However, the Los Herr´ an Street project remains limited in its civic participation components. Our document and interview analysis reveals that, coinciding with the municipal elections, PNV used the political campaign to announce the NGEU funding mechanisms and unravel the project in a quite centralized manner. The then-mayor and councilor participated in street actions (Photo 1) and an information session for Fig. 1. Data types and sources. J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 5 Fig. 1. (continued). Fig. 2. Analytical framework. J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 6 the broader public (attended by around 200 neighbors). This process was accompanied by street surveys to gauge residents’ opinion around the project – 68% of respondents were seemingly in favor, – and to collect “suggestions and complaints” (I06, city-council). While members of the city-council confirmed in interviews the importance of an informatory “participatory” process, they also stated that at times participation risks going against climate mitigation goals – a contradiction to the funding scheme that highlights the importance of civic participation. As an elected official explains: “The project is more or less defined; there can be limited participation, but most things will be like in the proposal. Some may say [the politicians] ignore participation. But you cannot start to listen to everyone who tells you they want to drive their car inside the city, (…), you must be brave and say we know, this is good for the city, this comes from an analyzed strategy confirming it will be positive. Even if [the citizens] complain, we must move forward. (I06, citycouncil) While other projects of this scale usually draw on cross-departmental collaboration, this project has exclusively been dealt with by the thenMayor’s Communications Office. In just a few months and by August 2023, contracts worth 12 M Euros were signed, to be executed within 20 months (City-hall Vitoria-Gasteiz, 2023). The centralized governance approach, absent of communication leading up to the project announcement and of citizens’ involvement in project design, led to strong internal criticism of technical staff and opposition parties: “Before you announce it to the press, you can inform that there may be a project like this, even if you don’t give all the details. But, well, there has been nothing (…). We would have liked to be involved and participate from the beginning and not have learned about it from the media. (…) The neighborhoods (…) also heard about it through the media. Yes, there have been street actions to explain the project, a few informatory sessions, but this is not enough. There must be meetings with the neighborhood to, together with them, propose the best options. Because if not, what can occur is resistance to this type of project and we are talking about something very crucial as fighting climate change.” (I08, city-council) Despite this criticism, the project outcome was not rejected by the municipal opposition, which highlights that greening tends to be a rather consensual post-political vision in local politics (Neidig et al., 2022). From a social equity standpoint, our analysis reveals that the project does not entail any clear measure to address socio-economic exclusion, especially the needed rehabilitation of the working-class neighborhood building stock and of a center for elderly residents, which many of the active neighborhood collectives see as a funding priority (I01, I11, E05). Los Herr´ an Streets is a traffic axis crossing several of the city’s mainly working-class neighborhoods developed in the 1950–60 s. Much of the housing stock in adjacent neighborhoods is classified as “degraded” due to problems of heat insulation, humidity, and accessibility. Those neighborhoods are characterized by an aging population, unemployment rates above city average, and a lack of retail options (Ensanche, 2018) Despite residents’ overall support for improving Los Herr´ an Street, civic critiques have emerged, especially framed around inclusion. Residents point here to the lack of consultation and consideration of specific local needs, which planners justify by lamenting the strict timelines and project requirements put forward by the RRP. This critique became exemplified by a petition initiated in September 2023 by a local sport journalist who called to preserve the campos negros (Photo 1), the black fields, an asphalted sports area being used by local, Latino and Pakistani communities and important identity-shaping space for the city’s historic first league Basketball club. Here, different ideas of inclusion are clashing as municipal planners envision a modern park in place of the degraded space, allowing for gender inclusivity and multi-uses instead Table 1 Summary of projects’ multi-level operationalization. Los Herr´ an Street Project Old Town naturalization project Spanish RRP components Policy lever #2: Resilient Infrastructures & Ecosystems Component #4: Conservation & restauration of ecosystems (through, e.g., urban green infrastructure or reduced urban habitat fragmentation). Policy lever #5: Modernization & digitization of industrial & tourism sectors Component #14: Modernization & competitiveness of the tourism sector (through greening and digitalization measures). Administration of RRP components Responsible entity: Fundaci´ on Biodiversidad (under the Spanish Ministry of Ecological Transition & the Demographic Challenge) Assessment of municipal project applications based on 1) an environmental impact assessment, 2) a long-term urban strategy, such as a green infrastructure, mobility, or sustainability plan & 3) a project-specific strategy for governance & participation, communication & awareness-raising, and monitoring. Responsible entity: Department of Tourism, Commerce & Consume of the Basque Government (under the Spanish Ministry of Industries, Commerce and Tourism) Assessment of local Tourism Sustainability Plan at Destination codeveloped by national, regional, and local administrations and local private actors. Two evaluation rounds: first by the respective regional ministry, second by the national ministry to assure alignment of local plans with the regional & national tourism strategies. Objectives of local projects Climate change adaptation, economic revival of local commerce, inclusive greenspaces, reduction of inner-city emissions. Added green aesthetic value, increased tourism sector, ecological connectivity, social cohesion through comaintenance. Interventions of local projects Mobility interventions (traffic calming, pedestrianization, prioritization of bike & public transport) & provision of urban green infrastructures (multi-use park with nature-based play equipment, forest, water areas, gardens, green corridors, recovery of an underlying stream for rainwater drainage and cooling system). Small-scale greening interventions in narrow streets & squares (e.g., green facades, green roofs, pocket parks, green furniture such as pots or trees, improvements to existing greenspaces) based on co-design and co-management by municipal technicians & neighborhood residents. Participatory process, inclusion, and social equity Although requirement by the funding scheme, only “informatory” participation. Lack of structural intervention to address poor quality housing and social services and lack of consideration of residents’ demands and historic place attachments in those areas. Not required by funding scheme yet embedded in the projects’ long-term vision (through co-design and -governance). Economic development for visitors prioritized over residents’ social identity and over their organizing for bottom-up greening. Financial contributions of NGEU to local implementation Projected costs of a total of 13.5 Mio € of which around 1.9 Mio € will be financed through NGEU funds (announced in July 2022). 2.8 Mio € for the first phase of the PSTD (announced in December 2021) of which 355.000 € are dedicated to the naturalization of the Old Town; 2.59 Mio € for the second phase of the PSTD (announced December 2022) J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 7 of designated areas for competitive and often male-dominated sports. However, the planners’ proposed design risks overrunning the neighborhood’s historic place attachment that grew around multi-cultural competitive sports. A member of the adjacent neighborhood association explains: “The campos negros usually gather immigrants, but also students from adjacent schools, who in their free time go there to play basketball and football. Then there is usually a South American group that plays a lot during weekends, and people of Pakistani origin who play cricket. It is a place used by all the people. We have no idea what they want to do with it, it seems they want to make it green, but with artificial grass. (…) And then, they don’t want to put games that are competitive. Please, it’s a big enough place so that all the people can be there, ….” (I01, neighborhood association) 4.1.2. Case 2: Naturalization of the Old Town 4.1.2.1. Project context. The Old Town’s naturalization is one of several interventions under Vitoria-Gasteiz’ Tourism Sustainability Plan at Destination (in Spanish: Plan de Sostenibilidad Turistica en Destino, henceforward: PSTD) developed under the RRP. It includes the naturalization of the Old Town’s emblematic narrow streets and squares through small-scale interventions such as green facades and roofs, pocket parks, green furniture, and improvements to existing greenspaces (Paisaje Transversal, 2022) (Photo 2). The intervention aims for added aesthetic value, ecological connectivity, and social cohesion, building upon a long-term process of space co-design and -management together with municipal technicians and neighborhood residents. Projects under the RRP’s fifth policy lever belong to the Spanish Ministry of Industries, Commerce and Tourism which then allocates funds to the 17 regional ministries of tourism and local recipient entities. The objective is to generate a competitive green and digital tourism sector by involving private actors and by naturalization initiatives contributing to the sectors’ economic growth. Special attention is further attributed to the administrative requirements of evaluating impacts of the local PSTD that helps generating “knowledge derived from the collection, analysis and interpretation of information, (…) and its effects on the tourism sector.” (Spanish Government, 2023). 4.1.2.2. Civic participation, equity, and inclusion. The initiator of the Old Town’s naturalization vision is the Environmental Studies Center (Spanish acronym: CEA), a municipal environmental think-tank with budgets approved by the city-council. Founded in 1995, the center has been the driving force behind most of the city’s green initiatives, which has guaranteed local-to-international recognition and support across political parties (Neidig et al., 2022). Our analysis of interviews reveals that, prior to securing budget, in 2020 the CEA started to work on the Old Town greening vision based on a project co-design and co-maintenance together with neighborhood residents. The first project presentation to the city-council received positive support across all political actors: “The reception was very good. (…) All the political parties told us: "it will be an ambitious project, but start doing things, even if you fail". In other words, everybody thought that it would be very difficult, Photo 1. left: Information booth presenting the Los Herr´ an Street project; right: the campos negros, (eng: black fields) with their current use as basketball fields, to be transformed (photos by the authors, May 2023). Photo 2. left and middle: project rendering for the Old Town project (from Paisaje Trasversal, 2022); right: one of the narrow Old Town streets as possible space for small-scale greening interventions (photo by the authors, June 2022). J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 8 that we are going to make many mistakes, but that we should start to intervene.” (I05, CEA) The project’s objectives fit well within the overall institutional greening discourse focusing on the value of greening through progressive urban experimentation (Neidig et al., 2022), in this case a new form of micro-landscaping within a constrained historic morphology. Nonetheless, the city-hall has thus far only minimally communicated the project to the broader public, especially in relation to the NGEU funds financing it. The project’s civic participation aspect has so far been limited in scope and attendance success. Following an initial assessment of possible green interventions by an external architecture studio in June 2022, the CEA and the architects organized two participatory workshops to foster trust with neighbors (E01, E03, I04, I05, I09). Despite being in a neighborhood with an established social fabric and tradition of activism, attendance was low, with only six non-institutional participants in the first and ten in the second workshop. Organizers acknowledged that the project budget was pending approval, despite the availability of NGEU tourism funds to be implemented by 2026 (E01, E03, I04, I05). Since then, the CEA has been planning campaigns to raise awareness, encourage citizen participation, and promote collaboration among actors, emphasizing the process-orientated nature of the project. Yet, without a clear timeline, the impact of specific actions remains quite poor, including planned initiatives such as a neighborhood competition of the “greenest balconies”, for which plants, pots, and growing instructions will be gifted to residents. Similarly to the Los Herr´ an Street project, the greening of the Old Town is focused on a limited definition of green interventions and a negligence of deeper social equity goals. The neighborhood faces poor housing quality, energy poverty, and limited accessibility. While many of the neighborhood’s Southern residential buildings have been upgraded, partly through a process of early gentrification, the Old Town’s North remains degraded, with a high percentage of lower-income foreign-born residents living in social vulnerability. In response, civic activism is directed against city-hall strategies that seemingly focus on the economic revival of the zone yet neglect urgent issues around the poor quality of especially immigrant families’ homes and of neighborhood health services, as a member of the neighborhood association relates: “There have always been tensions with the city-council, because they have always been more concerned about the neighborhood’s image than about residents’ actual needs, which are housing, the very old health center … (…) So, the city started proposing rehabilitation projects, but ignored our social needs for many years. There was a lot of networking of different local groups to denounce this and to create alternatives. We created a platform and made a very large diagnosis of the social needs. (…) In that sense, it is a very rich neighborhood with a powerful and vindictive neighborhood association.” (I09, neighborhood association) Neighborhood activists are framing a counter-green and -touristification discourse that prioritizes the inclusion of residents’ needs, emphasizing social cohesion, social organization, and neighborhood identity. They further denounce the institutional municipal focus on the economic re-valuation of the territory as a tourism site, centered around a beautification and museumification of the historic fabric. Their mistrust towards institutional processes is reflected in the poor attendance of the workshops initiated by CEA. During those sessions, residents expressed that they “did not want another botanical garden nor a touristic attraction park” (authors’ fieldnotes E01, E03) driven by a green aesthetic. This lack of trust intensified in the context of a bottom-up initiative emerging from several collectives, aiming to create a playground codesigned with children on a former Old Town parking lot. Back in 2018, looking for funding, neighbors had participated in an annual citywide competition, through which all residents could vote for one project submitted by other residents and collectives. The winning project known in Basque as “Haurren Auzoa” (kids’ neighborhood) was meant to receive municipal funding towards its execution. However, in 2021–22, the initiative became instrumentalized by the municipality which, under a marketed bottom-up project aiming for children-inclusive planning, framed a vision for the economic revival of the area. This process created much resentment among residents, who critiqued the lack of inclusion of residents’ social needs and of self-organized initiatives. An interviewee from the neighborhood association explains: “At that time, the [city-hall] decided to prioritize other projects and told us there was no money. Then the pandemic came. In the meantime, the PNV brought it up in the media as the star project for the Old Town´s rehabilitation plan. We were very angry, it’s not a project within the city’s rehabilitation plan. This is a project that arose from the neighborhood´s needs. (.). Then they also presented the project in some NextGeneration grants to promote sustainable tourism, and we were like, what do you mean, to promote sustainable tourism? Without asking us, they used our documents for the application. The park is now done and very nice, it is used a lot, (…) that part is fulfilled, but the process of the city-hall was a disaster.” (I09, neighborhood association) In sum, the project has two contradicting goals which stem from the way in which funds are framed and managed: On the one hand, NGEU funds are articulated to foment the economic growth of the tourism sector, in which naturalization contributes to the beautification of a historic neighborhood and is ultimately expected to translate into the economic re-valuation of the area. On the other hand, the naturalization through an envisioned slow participatory process is on paper supposed to enhance environmental awareness, quality of life for residents, and social cohesion across neighbors. Yet, residents’ organization against the touristification of the city’s emblematic historic center, partly financed by NGEU funds, means that they are feeling “forced” to leave the environmental benefits of the project aside to defend the traditional identity of their neighborhoods. 4.2. The poisoned gift of receiving multi-level ad-hoc emergency funds for local democratic governance? Drawing on this analysis, this second sections examines the governance tensions articulated by local planners and technicians. Results find trade-offs between a) a municipal need to produce an efficient funding bricolage that may hinder co-produced urban climate projects and b) a prioritization of transparent justification by institutional actors over a fuzzy governance approach to ensure residents’ support for project implementation under MAEF. First, as NGEU funds are being disbursed, local governments find themselves trapped between MAEF requirements and compromising localized visions of a “slow-er” governance that would prioritize democratic climate action. During several interviews, the city political and technical leaders shared their dependence on NGEU funds and the need to creatively harness their capacity to obtain them through a “bricolage” approach, even when projects might first be unpopular, also to achieve their ambitious climate goals. Access to MAEF such as NGEU is facilitated by municipal agencies grabbing on to strategies and project proposals ready to be pulled out for calls with short application timelines, as respondents explain. “This is a strategy that comes from Europe. Europe is telling you what to do and how to do it (…). It is an opportunity for us, otherwise our rate of investment would have been much worse, we would not have enough money to invest. As small local entity, we must always be connected to higher institutions that give you sufficient funding.” (I06, city-council) J. Neidig et al. Environmental Science and Policy 156 (2024) 103753 9 “They are saying the NGEU funds are for politicians to show off. The projects that we have done are sometimes unpopular. But of course, when Europe gives you money, you must take advantage of it. You don’t know if it is going to benefit or harm you, but you must do it.” (I07, city-council) The structure of this multi-level funding environment also increases an already existing gap in access to formal funding sources between cities with a lower economic and technical capacity, often more vulnerable to climate impacts, and those more greatly prepared to apply to funds (Knuth and Krishnan, 2021; Robin and Cast´ an Broto, 2020). Although such new finance sources are praised for their ability to support projects otherwise difficult to fund, Vitoria-Gasteiz’ planners express that both projects would have been funded eventually due to the city’s leadership in climate urbanism: “When there are plans, it is easier to obtain financing. And we knew that the [Old Town] project would be funded. Then, NGEU appeared. Those who have something prepared, even if at the level of an idea, have it easier.” Respondents further highlight the bricolage funding approach, by folding greening goals into tourism projects: “One of the NGEU is associated with tourism, it emphasizes the historic center, so that was a possibility for us to include our green infrastructure project” (I05, CEA). Accessing MAEF, although an opportunity to materialize ambitious climate goals, poses hence the risk of being a poisoned gift for local democratic governance. Their support to achieving local climate objectives may not be seen by residents and might even be undermined by civic action which would otherwise be more supportive. This dynamic ultimately challenges the successful outcome of local climate action. Local decision-makers, viewing cross-scale governance as progressive policymaking, expressed this dilemma of obtaining citizen support for goals that might be ambitious for a city (climate-wise), but might not stand within residents’ priorities. “The local adaptation of this European discourse with its much more global vision is really complicated. You have to transmit it to the citizens, so they understand why we are doing things, that it is not just an overnight idea. Sometimes, we may have a discourse a bit closer to this European vision, we are brave. At a political level, being brave has the risk that you may lose. Adapting these objectives that Europe is transferring and trying to insert them in the city’s culture with its complications that may arise during the project execution (…) may even be separating you from residents. (I06, citycouncil) Second, from a communications standpoint, there is a sense that attaching a European “identity” on to local climate projects might further disconnect residents from their municipal leaders, as in both projects examined here civic respondents criticize the project framings as responding to European priorities, exemplified by the municipal mention of becoming a “European Supercity” (Photo 3). Resulting civic contestation against selected projects thus stems from the lack of direct communication when projects get disclosed, articulated, and justified, especially in the context of a municipal dependency on those multi-level funding schemes, as a neighborhood association highlights: “If anything, you have to be honest and say “To get this money, we have to justify or do it this way.” But at least, (…) communicate it properly and transparently. Ask the collectives: “How can do we do it?” It would already be perceived differently.” (I09, neighborhood association) Instead of clearly communicating funding requirements, interviews reveal that the city refers to the strict timelines and Spanish government and EU evaluation measures to justify their fuzzy governance lacking transparency. Consequently, local decisionmakers externalize the city’s own agency and responsibility to higher-scale institutional actors while partly contradicting RRP obligations and locally stated ambitions of participatory governance, as put forward in its own UGIP, which most likely endangers a successful implementation of selected projects, especially the Old Town project’s vision of co-governance. 5. Discussion We have analyzed the extent to which MAEF allow for the democratization of local governance of urban renaturing programs, prioritizing civic participation, inclusion, and equity. We have drawn on qualitative data around two urban naturalization projects currently implemented under the NGEU framework in the city of Vitoria-Gasteiz. Our findings show that funding requirements diverge from locally envisioned values about governance through conflicted perspectives of participation, inclusion, and equity by civic and institutional actors. We argue that civic Photo 3. Marketing campaign of Vitoria-Gasteiz’ city-hall announcing the city as "European Supercity" in Spanish and Euskera (photo by the authors, June 2023). J. Neidig et al.