Green Economy for an Urban Age

Cities are our society’s centres of human creativity, interaction, economic activity, knowledge, diversity and culture. Over half the world is now urban, and according to the 2006 State of the World Cities report, urban-based economic activities account for 55 per cent of the gross national product in the least developed countries, 73 per cent in middle income countries, and 85 per cent in the most developed countries. Cities are precious.

Cities are also critical geographical units in the formulation and implementation of sectoral policies – in water, transport and communications, energy, waste management and construction – that will shape our future for better or worse. Over the next few decades, climate change related disasters will have a significant economic and human impact on cities, in developing as well as in the most developed countries. Cities are at risk.

Cities are also where a range of environmental and developmental challenges find their crude expression – air and water pollution, greenhouse gas emissions from transport or energy consumption, social exclusion and slum developments, poverty and criminality. When we realise that cities emit three quarters of pollutant emissions worldwide, we should think that cities are the place where the ‘big push’ should be undertaken, to use Jeffrey Sachs’ expression. Greening our cities can not just have immediate multi-dimensional economic benefits, but also long-term positive effects as it will reduce the impact of cities on climate change, and de facto the impact that climate change will have on cities.

The cluster of human settlements is embedded in our postmodern culture, especially in developing countries, where a total of 145,000 new urban dwellers are introduced into the urban age every day. It is absolutely necessary to generate a global action plan for mayors to improve sustainability locally, and promote the sustainable green development of their cities. Local Agenda 21 enshrined in the 1992 Rio Convention led to a proactive engagement of mayors from around the world to drastically reduce their city emissions. While there is evidence that implementing Local Agenda 21 has proved challenging, even in some developed countries, there is a general recognition that it contributed to setting the stage for local authorities to take up the challenge of improving the environment in their cities.

The time has now come to take a step further, and to think of the myriad challenges laid out in Local Agenda 21 in the context of an Urban Age seeking its way towards a Green Economy. Cities will be central in bringing about tomorrow’s economic benefits and welfare, the provision of decent jobs and human well-being within an environment liberated from the risks and threats of climate change, pollution, resource depletion and ecosystem degradation.

Part of the multi-billion stimulus packages being enacted around the world to face today’s multi-dimensional crises are destined to boost green infrastructure, maximise energy use and materials efficiency, stimulate the use of renewable energy, and generate new kind of jobs, all of which will help create cleaner, greener and richer economies. Nonetheless, key questions remain: will the 16 per cent of green stimulus allocated in climate change investments be sufficient to restructure the global economy? Will all this work and what can ‘greening’ do for the world cities and the world economy, for employment and for poverty?

Achieving the transformative change in cities requires that we urgently integrate urban design in our planning policies, co-integrate nature and human economic development harmoniously, building and designing with nature. In order to give birth to a green urban age, we need to reduce our consumption patterns, change our habits, and base our production dynamics on resource efficiency and recycling. Many of these indicative criteria depend on the way cities have been shaped. In US cities, David Satterthwaite has noted how people use six times more cars than in wealthy Asian cities, mostly because of the urban sprawl and the lack of connectivity to public transport. In International Energy Agency ‘business as usual’ scenarios, CO2 emissions from the transport sector are expected to grow by 120 per cent by 2050 compared to 2000 levels. The global car fleet will triple, and more than 90 per cent of this growth will take place in non-OECD countries. In order to curb greenhouse gas emissions from transport, we must reduce automobile dependence, foster a rapid modal shift towards less carbon intensive forms of transport such as rail, and improve fuel and motor efficiency.

Cities can catalyse a modal and efficiency shift by targeting investment for well-planned, greener transport infrastructure that meets the needs of all users – both motorised and non-motorised. The planning of urban centres and their peripheries according to mixed-use and smart growth design principles must be part of a sustainable transport future. Urban development along these principles will serve to lower dependence on personal vehicles and support the increased use of public transport systems and non-motorised transport for short distances and daily commutes. Together with integrated transport planning and demand management, low-carbon fuels and greater electrification of transport are needed to meet short- and long-term economic and sustainability targets. The efficiency of light-duty vehicles in OECD countries is already capable of being improved by 30 per cent over the next 15 to 20 years. A widespread adoption of this efficiency in non-OECD countries and greater hybridisation and electrification of fleets could deliver a 50 per cent improvement in vehicle efficiency.

Policies promoting densification in the design of cities can reduce demand for long-distance transport. Planning and high density developments are totally compatible, as can be seen in the successful examples of planning green, dense cities that exist in some major wealthy Asian cities. In addition, land use regulations can ensure that habitations are located in places that provide greater efficiency in the use of energy and materials. For instance, many environmentalists want to limit development in Californian coastal cities, even if households there consume less energy due to geographical reasons than elsewhere in the US. Yet restricting construction in California could mean more houses in Houston, Texas, where households consume more energy for heating and people have to drive more because of the urban sprawl.

Incentives and regulations in the building and construction sector offer opportunities for cities and local governments to leverage their authority in the setting of standards and the issuing of building permits. These measures, including mandatory investments in energyefficiency or the installation of renewable energy technologies in buildings, can make a substantial impact. Many countries are already heading in this direction. Germany, for instance, launched a programme retrofitting existing housing stocks to improve energy efficiency. So far, retrofitting over 200,000 apartments has created 25,000 new jobs and sustained 116,000 existing jobs. A worldwide transition to energy efficient buildings would create millions of jobs as well as the ‘greening’ of existing jobs for the estimated 111 million people already employed in the sector. Investments in improved energy efficiency in buildings could generate an additional 2 to 3.5 million green jobs in Europe and the United States alone. The potential is much higher in developing countries and in countries in transition. The latter often have large stocks of inefficient buildings. Investments in green buildings have already been proposed for inclusion in a number of economic stimulus packages, including France, Germany, Japan, the Republic of Korea and the United Kingdom. Technologies and materials to improve the efficiency of buildings are commercially available at competitive prices. Using current building technology, we can already cut energy use by around 80 per cent compared to conventional designs. In order to achieve a wide adoption of these technologies and materials in new construction and renovation, however, there is a need for large-scale investments in skill development and capacity building. This is essential for increasing the supply of, and access to such technologies and materials, particularly in developing countries.

A Green Urban Age will have to recognise and confront the social and developmental challenges facing cities today head on. We now realise that urban dwellers are not only those who fully benefit from cosmopolitan urban lifestyles, but they are also the two billion people without access to safe drinking water and sanitation, victims of all kinds of inequalities. Beyond good planning and carbon-free technological solutions, the postmodern sustainable city should also be a well-organised place with low unemployment, social equality, green open space, social interaction platforms and universal education with provisions for basic needs.

Sustainable cities can partly be achieved by increasing participation in planning and decision-making in and around cities. Participatory budgeting as developed in Porto Alegre, Brazil is an accurate social solution to allocate public money, avoid money leaks and increase spending efficiency. The green urban revolution will occur through the joint collaboration of local community based organisations, international organisations and governmental agencies.

Will the world have to wait for the right mix of political will and coordinated policy actions to take place before sustainable growth can begin? Perhaps not. ‘There is already a green economy breaking through what is breaking down’, as Lawrence Bloom, chief of the Green Economy Initiative’s sustainable cities’ sector group puts it. Our hope is that the successful models we have already seen will be given the opportunity to scale up and succeed the world over. Our vision is no less than a society living in harmony with nature, thriving on a truly global green economy.

Pavan Sukhdev is the Project Leader for the Green Economy Initiative (UNEP), Study Leader for the G8+5 commissioned report on The Economics of Ecosystems and Biodiversity (TEEB), and Chairman of the Global Markets Centre Mumbai (Deutsche Bank).