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Besides comprising a majority of the world’s
population, cities concentrate disproportional amounts of the world’s
economy and decision-making power. Further, though urban areas cover
only around two percent of the Earth’s surface, they consume 75 percent
of its resources. Yet as a hub for social and political movements and
centres of technological and institutional knowledge and innovation,
cities can be a powerful catalyst of greener economies.
The growing size and importance of cities across
the globe make them arguably the single most important entities in the
fostering of a green economy. Because of their spatial distribution and
diversity, the management of cities can be more responsive to urgent
problems while being somewhat liberated from competing national
interests (e.g., regional development agendas and sector lobbies) and
responsibilities (such as national defense costs).
As a result, urban transitional activities are
playing an increasingly important role in the implementation of policies
regarding global environmental issues like climate change and
biodiversity loss. The green economy provides another platform for
ambitious cities to promote their green credentials.
The green economy will take on a different
character in different cities depending on their level of development
and spatial organization. It is important to recognize that cities face
different challenges. While urbanization increases at a global scale,
when this is differentiated by region the picture that emerges is unique
to each individual city.
Cities in developed countries seek to grow by
generating new jobs and industry. As a result, some cities are declining
as they lose the battle for investment and talent. African and Asian
cities have some of the highest growth rates and their development path
will have a crucial influence on global development in the 21
st century.
The way out of the urban development vs. environmental degradation dilemma is not necessarily to stop urban growth, but to harmonize the resulting opportunities and challenges.
For those cities embarking on development
transitions, it is important to remember that infrastructure lasts at
least 30 years, but often much longer. Once in place, many management
options become technical adaptation and retrofitting rather than new
design. Therefore the need to understand the relative importance of
different tools available to cities is crucial if the green economy is
to become a precursor to sustainable development.
The way out of the urban development versus
environmental degradation dilemma is not necessarily to stop urban
growth, which is almost impossible in some cases, but to reconcile and
harmonize the resulting opportunities and challenges.
History has proven that urbanization can be managed
in a way that promotes both the economy and human well-being. Because
of the concentration of people, resources, knowledge and economic
activities in urban areas, a properly managed cities-led green economy
could provide the economy of scale, political momentum and efficiency
gains necessary to lower the use of resources and energy.
The opportunities and the obstacles for a greener
economy in cities are analyzed by looking at the specific economic
processes that take place in cities, namely transformation of space
(urban development), production and consumption, circulation (trade and
transportation) and the production of ecosystem services, social
services and knowledge. Understanding how to green those processes can
have huge social, economic and environmental impacts on the cities and
beyond.
Transformation of space: urban development
Physical and spatial development of cities are
among the most significant components of urban economy. Urban
development transforms natural environment and resources into man-made
superstructures and infrastructure and this transformation places
significant stress on the remaining natural environment.
The way we build our cities also influences how we
spend and distribute our economic resources. Urban forms and spatial
distribution of urban functions play a critical role in this respect.
Sprawled cities, where low-density is the norm and urban functions are
distantly located, increase the consumption of energy and natural
resources including both terrestrial and aquatic resources.
The cost of urban development is high in dispersed
cities, as relatively large land areas are dedicated to urban
infrastructure and utilities. For instance, 70 percent of the cost of
urban water supply systems goes towards piping, and 30 percent of urban
energy consumption goes towards the pumping of water and the collection
of wastewater. Therefore a smaller land-use area can result in lower
utility operation costs.
Similar conclusions can also apply to
transportation infrastructure. Compact cities with high density and
mixed-use urban quarters (e.g., concentrating and combining retail,
office and residential activities) can reduce travel activity and
therefore result in energy-savings and lower levels of land-use change.
Overall, through the preservation of surrounding
agricultural and forest land (for example, by combining agrarian
activities and residential land use) cities can benefit from the
ecosystem services provided by these areas, potentially reducing certain
infrastructure costs while increasing the quality of life of its
residents.
A key component of urban development that can
promote the transition to a green economy is the superstructure: more
specifically, the buildings. The building sector is one of the main
contributors to carbon emissions, utilizing approximately 40 percent of
global energy consumption; it consumes 12 percent of all fresh water and
generates 40 percent of the total volume of waste. One of the key goals
of the green urban economy is to promote energy and resource efficiency
and to provide high quality, healthy and affordable buildings for urban
residents.
Consumption and production in cities
In an increasingly urbanized world challenged by
global environmental change and pervasive inequalities, cities are
looking for new pathways to provide human well-being while using natural
resources sustainably. Developing a green economy for urban areas is a
response to those challenges. Such an approach should take into account
sustainable production and consumption issues, as cities consume vast
amounts of resources to meet increasing demands for goods and services,
which can lead to environmental impact and economic exploitation in the
non-urban supply areas.
Sustainable consumption and production should aim to transform current environmental challenges faced by cities into economic opportunities.
Sustainable consumption and production should aim
to transform current environmental challenges faced by cities into
economic opportunities by boosting the demand for more sustainable
products and technologies, improving the environmental performance of
products throughout their lifecycle, helping consumers to make informed
choices, and by promoting awareness and lifestyle changes that help
individuals to adapt their urban life to today’s challenges.
By enhancing local ecosystem services, urban areas
can provide well-being for their residents while reducing their
consumption footprints, thus creating opportunities for greening both
their economies and their landscapes. From
heat island
control to flood mitigation, from local food provisioning to water
purification, managing local ecosystems to increase their functionality
will create innovative economic opportunities for clean development and
ultimately render cities and local economies visibly greener.
Circulation: trade and transportation
Transportation is fundamental to a city’s economic
productivity as it determines the accessibility and efficient urban
circulation of people, resources and goods. Transportation can also be
an effective countermeasure against the spatial mismatch of labour and
workplace and housing and services.
The availability of transport infrastructure
influences the location of activity centres, including industrial,
commercial, and residential areas. Thus, an improved urban
transportation system can decrease travel time and increase
cost-effectiveness allowing for reliable, quick, and low-cost freight
movement and convenient access for employees and residents.
Additionally, the transport sector (including green transport) is a
source of investment and urban employment (e.g., infrastructure
development and management).
To align trade and transport goals requires a mix
of the three pillars of transport policy options: avoid, shift and
improve. The first priority is to avoid movements of people and goods
without reducing the economic efficiency. For example, working remotely —
a benefit of advances in information technology — can increase
efficiency and reduce travel.
The second pillar is to promote a shift to
efficient modes of transport. The use of public transport and
non-motorized vehicles can be promoted by improving the design of a
city-wide public transport network — enhancing its flow, improving
multimodal connectivity and ensuring the safety, security, convenience
(barrier-free) and affordability of public transport.
A challenge to this shift is that most public
transport systems are not financially sustainable and are heavily
subsidized. Increasing ridership to help with cost recovery requires
‘soft’ measures
to change people’s preferences for private and informal transport.
These are helpful because the factors that influence people’s mode
choice go beyond the existence of alternatives, with convenience and
cost being prime elements.
Particularly in the context of developing
countries, the economic role of informal transport is significant as a
source of mobility and employment particularly for the urban poor. In
fact, these modes — including rickshaws, motorcycle taxis, and small
vans — provide flexible, low-cost, door-to-door transportation and
movement of goods, that can service difficult-to-reach streets and
narrow passageways. Policies that restrict the use of informal
transportation may unintentionally disrupt some urban economic activity.
The third pillar is to improve the efficiency of
road vehicles through technological improvements such as fuel-efficient
vehicles, alternative power sources and efficient driving methods (for
example, reduced idling). However, technology introduces the issue of
cost equity. A green urban economy can be stimulated through investment
in and promotion of green technologies but these have to be considered
as only part of the solution, recognizing that not everyone can afford
them.
Ecosystem, social and knowledge services
Some of the most important parts of a city economy
are those not captured directly by the market or prices, such as
ecosystem services, social services (e.g., community-based social
capital) and knowledge-based activities (e.g., education, and
human/intellectual capital).
One of the biggest challenges to achieving a
greener city economy is to shift the focus of urban development policy
away from traditional measurements of GDP (such as building houses,
factories or roads) and direct attention to ways we value and manage
non-monetary resources and their influences beyond city boundaries.
Urban ecosystems provide a series of benefits to
the local population such as recreation, culture-based services (e.g.,
traditions based on biodiversity), water and food provision, flood
control services, energy and climate change mitigation (carbon and heat
island management). Moreover, preserving the quantity and quality of
those services can be fundamental for poverty eradication in the city
since the poorest populations primarily make use of these resources as
they are often denied access to services from the built infrastructure
of cities (especially in terms of energy and sanitation).
Cities have both dependence and significant impact
on the ecosystems beyond their boundaries. For example, many city-based
financial institutions provide capital for activities beyond city
boundaries (most notably extractive industries of mining and oil
production operations). Whilst wider structural changes to the economy
would need to occur, this could be accelerated if those institutions
dedicated more of their resources towards greening the economy.
Cities are also responsible for a large part of the
greenhouse gases (GHGs) produced worldwide, which affect a wide swath
of urban, rural and forest environments globally. Thus, it is crucial to
create mechanisms that facilitate green economic links beyond city
boundaries.
Challenges ahead: Building the urban governance mechanisms
Greening the economy of cities is a necessary
pre-condition to achieving a greener global economy that leads to
poverty eradication. Steering the governance within and beyond cities is
needed to divert cities’ huge physical, financial, human, social,
natural and intellectual capital towards the objective of a greener
economy.
The green economy has also emerged as a central
development theme because of a deep-seated belief that sustainable
progress will fail if we do not focus on economic gains; and cities are
fundamental economic centres. What is important to recognize is that if
the green economy is to be a prerequisite for sustainable development
then it will have to be different from our current understanding of the
economic processes.
If the green economy is to be a prerequisite for sustainable development then it will have to be different from our current understanding of the economic processes.
A green economy goes beyond simply greening parts
of the conventional economy. It will require a broader understanding of
how the economy functions, including not only the appropriate pricing of
environmental externalities, but also the creation of the right
institutions that steer the economy in this direction.
Much of the conceptualisation regarding the green
economy has been in development for quite some time. Indeed substantial
progress has been made on how to attribute economic values to nature,
most recently through
The Economics of Ecosystems and Biodiversity and many solutions and pathways are laid out in the United Nations Environment Programme’s
2011 Green Economy Report.
The challenge is therefore not in finding solutions or best practices
but rather to develop the governance mechanisms to move the economy in
the proper (green) direction that results in benefits throughout the
whole of society including the poor and most vulnerable.
To do so, we need to create the right institutions
in and boost the organizational capacity of cities. This involves not
only local governments, but also non-governmental actors and networks
beyond cities. We need the appropriate flow of knowledge, information
and resources from local to local, and from local to global, to
facilitate the processes of change.
Cities are highly complex entities. They cannot
exist in isolation and are therefore underpinned by a host of internal
and external linkages. Very often these linkages are invisible at the
city level but are precisely those that need to be considered when we
talk of cities, governance and the green economy.
Most cities or groups within cities guard their
governance boundaries tightly, sometimes in a very unfair and selfish,
inward-looking manner. The benefits of good public transportation,
sustainable affordable buildings/housing, renewable decentralized energy
sources and sustainable consumption patterns can make cities better,
not only for their own citizens, but also for the wider society.
If we fail to recognize and govern the links
between cities and the local and global environment, we will be
undermining the viability of cities in the long term, with unthinkable
consequences to humanity, the majority of which today live in cities.
• ♦ •
For an in-depth focus on this article’s topic please see the related UNU-IAS Policy Report: “
Governance
Challenges for Greening the Urban Economy: Understanding and Assessing
the Links between Governance and Green Economy in Cities“.
International Financing Options for City Climate Change Interventions
