Efficiency in environmental spending for sustainable development in Spanish cities

Abstract

Urban environments are key to mitigating the effects of climate change, contributing to sustainability and improving people’s lives. A significant part of the commitment to sustainable development is made by assuming the vital role played by local governments as the administrations closest to citizens and responsible for providing most of the essential services for the community. Therefore, knowing local governments’ levels of spending efficiency in urban environments, as well as the exogenous factors that explain these levels, will allow us to analyse the management carried out in this area and propose improvements to achieve the commitments made (Agenda 2030, the Green Deal, Fit for 55). One of the novelties of our research is considering climate as an exogenous variable in explaining efficiency levels. We find that cities with more extreme climates are more efficient in managing environmental expenditure, and densely populated municipalities are less efficient. We also conclude that local governments with more revenues or where tourism is one of the main economic activities improve efficiency, while the gender of the mayor (in our case, women) and political fragmentation reduce it.