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Eco2 Cities: Ecological Cities as Economic Cities
A New Business Model for Environmentally and Economically Sustainable Urban Development
November 5, 2008Hiroaki SuzukiWorld Bank EASUR
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Overview
Background: Urban growth and challenges in EAPEco2 approachEco2 productsEco2 partnersEco2 workplan
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The World Urbanizes
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By 2015, East Asia will be predominantly urbanUrban population (% total population) Growth in number of cities over one mil inhabitants
1960
2025
2000
1980
0
25
50
75
100
SSA SA MENA LAC OECD EAP
500 million more people move into Asian cities
Source: World Development Indicators; United Nations World Urbanization Prospects
Source: United Nations World Urbanization Prospects
0
20
40
60
80
100
120
140
160
180
2000 2005 2010 2015
40% increase in number of large cities
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Asia’s Mega Cities
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Urbanization –Engine of the East Asian Growth
Source: East Asia’s Urban Transformation, EASUR, World Bank
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Urbanization is a good proxy for income level
Source: Acemoglu, D., Presentation at the World Bank on Jan.19, 2006GDP for China is taken from the same presentation, and urbanization in China is taken from UN data
China
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Countries with Largest Percentage Increase in Emissions: 1994-2004
0
10
20
30
40
50
60
70
Malaysia Thailand China Iran Spain India SaudiArabia
Turkey Egypt UnitedArab
Emirates
Indonesia
Perc
ent
1994-19991999-2004
Several EAP countries have high and accelerating fossil fuel CO2 emission growth
Source: “Growth and CO2 Emissions: How do Different Countries Fare?” WB, 2007
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Rapid motorization continues1990-2003 2004-2020
Annual growth 31% Exponential
China - Private Passenger Vehicles (millions)
Future: Plenty of room for growthIn transport, vehicle ownership is still low
-
50
100
150
200
Chi
na
Vie
tnam
Indo
nesi
a
Phi
lippi
nes
Mon
golia
Cam
bodi
a
Thai
land
Sou
thK
orea
Mal
aysi
a
Pass
enge
r car
s/10
00 p
erso
ns,
2002
EAP Average
= 10
Japan 492
0
1020
30
4050
60
7080
90
20002002
20032004
20052006
20072008
20092010
20112012
20132014
20152016
20172018
20192020
Proj
ecte
d no
. of a
utom
obile
s (in
mill
ions
)
13 million
77 million
Source: International Energy Agency, 2005; World Bank Staff Estimates
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Urban air pollution is a serious problem in East Asia
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Scarce Water ResourcesDemand for water doubled in the last decadeDeteriorating water quality in aquatic & coastal systems
Source: East Asia Environment Unit, The World Bank; World Bank Staff estimates
Population in areas of relative water scarcity (people per km2)
Area faces relative water scarcity if mean annual demand is greater than 40 percent of the mean annual surface and sub-surface runoff for the area. Colors indicate the population in each area.
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Untreated Wastewater
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Increasing Solid Waste
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Natural Disaster
Source: www.civildefence.govt.nz/
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Natural Disaster
Source: www.nswfb.nsw.gov.au/
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Increasing Energy Prices
Source: World Bank, DECPG; Financial Times, March 4, 2008
Real oil prices (US$ / b), Index, 2000=100
0
50
100
150
200
250
2000
2001
2002
2003
2004
2005
2006
2007
2008
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Huge environmental pressures
China's momentous energy demand growth40-year periods of primary energy growth
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500
1,000
1,500
2,000
2,500
3,000
3,500
0 5 10 15 20 25 30 35 40
Years
Milli
on to
ns c
oal e
quiv
alen
t (M
tce)
Japan 1958-1998
OECD Europe1965-2003
USA 1950-1990
China 1980-2020 (Green
Growth)
China 1980-2020Business As Usual
Sources: BP Statistical Review o f World Energy 2004,Govt of Japan, DRC China, US Dept of Energy
“Business as usual” is not sustainable
• US energy consumption increased by 2,000 mtce in 45 years as GDP quadrupled during 1950-1995
• Under business as usual (GDP growth rate = 7%), China will increase energy consumption by 2,000 mtce in just 14 years
• Coal-based generation to account for 65-70% of total production capacity
• With the most rapid increase in CO2 emissions in the world over next 30 years
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Unsutainable Growth
4 Earths (Ecological Footprint) required if developing country cities urbanize following the models of developed country cities
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City as a key playerIt is easier to jointly examine the issues at the City level than in larger contextThere is a trend towards decentralization in decision makingEnergy efficiency measures can be achieved more effectively in compact urban areas than in loosely structured low density areasCities provide favorable environment for business
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Our approach: Eco2 Cities
City-based solution to balance the choice between Eco and Eco through integration in urban planning and management
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Concept: Eco2 Cities
APPROACH OBJECTIVE
(3) Financial Incentives and Financing Options
Eco2 Cities Environmentally Sustainable and Economically Efficient
Cities
(1) Policy & Regulatory Measures
(2) Strategic Infrastructure Investments
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1. Policy & Reform Measures
A. Urban Planning Spatial Development Plans, Land Use Plans and ZoningConstruction Standards and Building CodesPublic Transport Policies
B. Integrated Utility ManagementPower (Renewable Energy and Energy Efficiency)Water (Water Conservation and Reuse)Wastewater (Biogas and Biosolids Recovery and Reuse)Solid Waste (Recycle/Waste-to-Energy/Composting)
C. Private Sector EngagementIndustrial and Investment Policy, Regulation and TaxationIntegrated Industrial Eco-ZonesInnovative Policies and Programs for the Service Sector
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2. Strategic Infrastructure Investments
Land Development & Servicing; and Spatial DevelopmentMultimodal Transport Network
Synchronized with land use planning and regulationsCombined Heat & Power (with district heating)Energy Efficient Water and Wastewater OperationsWater SavingsSolid Waste Management (composting, recycling and energy use)Industrial Eco-Zones
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3. Financial Incentives and Financing Options
Policy & Reform Measures• Adoption of Policy and Regulatory Measures• Materialized Carbon Targets based on Application of Measures
Infrastructure Investments• Integrated Urban Infrastructure
Financial InstrumentsIBRD/Donor DPL Phase 1
as well as ECONOMIC RESILIENCE and FISCAL GAIN
IBRD/Donor DPL Phase 2Carbon Finance
• IBRD/Donor SIL
• Carbon Finance
Financial Incentives Inducing Cities to Implement Policy and Regulatory Measures and make Strategic Infrastructure Investments
for instance…
• CTF Loan (IDA terms for MICs)• GEF Finance
• IFC
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Financing Options Multilateral Funds
Global Environment Facility (GEF)Climate Investment Fund (CIF)Carbon Finance – CDM
Multilateral Development Bank LendingWBIFC
Bilateral Donor SupportPrivate Sector Investors
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Key principles of Eco2 CitiesSynergy and balance between environmental and economic objectivesIntegrated approachLong-term and life cycle perspectivePath-dependency (spatial pattern matters)Learning from best practice (Stockholm, Vancouver, Curitiba, Portland, Brisbane etc)Lessons from developing countriesLinked to finanical incentives
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Key dimensions for integration
Policy, Legislation and RegulatoryInstitutional ContextPhysical Systems, Technology and Spatial PlanningStakeholder DynamicsEconomic and Financial Aspects
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Integrated Utility Management & Institutional Collaboration in Hammarby Sjostad, Stockholm
Energy
Water and sewage
Waste
Source: Stockholm City Planning Administration
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Co-generation
Source: Kawasaki Heavy Industries, Ltd
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Spatial Development Pattern Matters (Built-up area of Atlanta and Barcelona)
Source: Bertaud, A., and T. Pode, Jr., Density in Atlanta: Implications for Traffic and Transit (Los Angeles: Reason Founcation, 2007).
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Fragmented Land Use vs Compact Land Use
Source: Urbanization in China, A. Bertaud
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Fragmented Land Use vs Compact Land Use
Source: maps.goolge.com
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GHG abatement costs
Source: Mckinsey&Company
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Optimal integration pointNet financial gains from integration
Time since integration
Optimal integration point
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Analytical and Operational Framework (AOF)
AOF can be used by urban decision maker to put together and optimal and integrated set of program elements for their city
Policy, regulatory and institutional measuresStrategic integrated infrastructure investmentIncentive-linked financial investment
Introduction of scenario planning and simulation models/tools that can be applied to Eco2 cities
Quantification of cost benefits of Eco2 approach
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Eco2 Cities: Developing the Analytical and Operational Framework
Develop systematic and standardized methodology to quantify the costs and benefits of approaches (ex. Environmental Load Profile – Sweden)
Figures are from Anna Forsberg’s Thesis, “Development and First Application of the Environmental Load profile for Hammarby Sjostad,” KTH (The Royal Institute of Technology, Stockholm), May 2003
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Eco2 Cities: Developing the Analytical and Operational Framework
Develop systematic and standardized methodology to quantify the costs and benefits of approaches (ex. Environmental Load Profile – Sweden)
Source: “Development and First Application of the Environmental Load profile for Hammarby Sjostad,” KTH (The Royal Institute of Technology, Stockholm)
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Eco2 Programs/ProjectsEco2 Cities Regional Program
Phase 1: Analytical and Operational Framework (AOF), Sector BriefPhase 2: Pilot projectsPhase 3: Scaling up and national level institutionalization
Sino-Singapore Tianjin Eco City ProjectImplementation framework for the Master Plan Green BuildingsGreen Transport
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Eco2 Partners
National GovernmentsCitiesAcademics & Research InstitutesPrivate SectorHouseholdsDonorsNGOs/CSOs
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Current Eco2 Partners
Donor PartnersAusAid, SIDA, GEF, CDM, CIF, IFC ESMAP
City PartnersStockholm, Singapore, Tianjin(Vancouver, Curitiba, Yokohama, Tokyo)
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Eco2 Cities medium-term plans
Phase 1 (Program Development): Development of Analytical and Operational Framework (AOF), Case studies and Sector briefs.
Phase 2 (Pilot Programs): Application and adaptation of framework to a pilot city chosen through a demand driven process. The commitment of the city and its capacity to implement such an approach are critical.
Phase 3 (Scale-up & national level institutionalization): Institutionalizing Eco2 approach in a few countries and capacity building within the countries for leadership in implementing their own Eco2 Cities programs.
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Eco2 Scale-Up Mechanisms at a National Level
National Eco² Fund
Fund Manager
Donors
World BankCapital Market
Technical Assistance
Eco² Cities
Eco² City A Eco² City B Eco² City C Eco² City D
TechnicalAssistance
Appraisal Application
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Each of you have a place to participate in Eco2 Cities Program
National and municipal governments
Research institutes
Academics
Donors
Financial Institutions
Private sector Investors
Households
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For Information on Eco2
World Bank Washington Head QuartersHiroaki Suzuki: [email protected] Dastur: [email protected]
THANKS
