More than half the world’s population lives in urban areas. Cities consume over two-thirds of global energy and account for 70% of carbon emissions. With more people migrating to cities, their carbon footprint will rise further unless the world successfully transitions to a low-carbon economy.
Cities have a huge role to play in this transformation. It is both a necessity and an economic opportunity.
Invest to save
Many urban areas are near the coast – 14 of the world’s 17 largest cities and 40% of those with populations of between 1M and 10M – so people and infrastructure are vulnerable to rising sea levels and powerful coastal storms resulting from climate change. By the mid-2030s US$200bn of investment each year will be needed globally to combat losses from climate effects. Cutting carbon emissions rapidly will help to limit the extent and severity of climate change over this century.
This is where the opportunity lies. The cost of acting to limit the severity of climate change will be far less than that of dealing with the effects – and the more decisive and effective action is now, the less extreme and costly the future impacts will be. This in itself makes business sense, but low carbon investment can also make cities more liveable. For example, efficient and accessible low or zero emission public transport results in better quality of life, cleaner air and improved health thanks to more journeys by bike or foot. And because decarbonisation demands innovation, it also opens business opportunities.
Regional difference and opportunity
There will be no ‘one size fits all’ solution due to geographic, cultural and political differences. However, innovators will be able to export their expertise to developing cities, while they in turn have the opportunity to leapfrog present low carbon leaders – something already happening in the energy sector.
Beware of risk
The financial industry is alert to decarbonisation. The G20’s Financial Stability Board has created the Taskforce for Climate-related Financial Disclosure, the supporters of which include systemically important lenders, banks, insurers and credit rating agencies. Collectively they control a third of global wealth.
TCFD members are starting to ask businesses to disclose and manage their climate-related financial risks:
• Ability to transition to a zero-carbon economy that will prevent global temperatures rising more than 2°C above the pre-industrial average.
• Physical resilience to the effects of climate change still to come.
They say they will withdraw services from organisations that don’t disclose and manage their risks effectively, and favour those that do.
Action is expected as early as 2019 – and TCFD supporters emphasise that, as users of financial services, public sector organisations are as much in their sights as private ones.
Mayors should beware of the importance of de-risking their own operations and those of their agencies and service providers. They should also emphasise the importance of action to the major employers, who stand to lose or gain depending on what action they take. For example, there are already signs of fossil fuel divestment from key stakeholders in some cities.
Show strong leadership
Worldwide, more than 9000 cities have committed to reduce emissions in line with the Paris Agreement. Low carbon city strategies should focus on identifying and quantifying the benefits of low-carbon infrastructure on the local economy, and the mechanisms and enablers to realise the advantages.
Decarbonising the economy involves a combination of wholesale transition to renewable energy and energy storage, deferring investment in new physical infrastructure by meeting social and economic needs with digital solutions, behavioural change, radical efficiency in new assets and services, and low carbon retrofits to existing assets. All of which can help realise better value for the public purse and benefit citizens.
In the infrastructure sector, embodied carbon savings of more than 60% are being achieved by leading clients, delivering cost savings of up to 30%. These figures are the average for projects implemented across multi-year, multi-billion pound capital investment programmes, measured against earlier business-as-usual carbon and cost metrics.
The methods employed by those organisations at the cutting edge have been codified in an international standard for managing carbon, PAS 2080 – anyone can do it. As important clients for infrastructure and services, city mayors can demand action by their supply chains.
Mayors should also pursue digital ‘smart infrastructure’ solutions, which enable the performance of assets to be optimised, so that over the lifecycle of an asset it consumes less energy and emits less carbon.
Join up thinking
The scale and population density of cities allow energy and resource flows to be used much more efficiently, by taking a systems level approach and integrating energy, heating and cooling, transport and waste in a way not possible at low population densities. With cities increasingly competing and collaborating across national boundaries and seeking to attract investment, skilled employees, students, start-up communities, establishing low carbon credentials can be an important pull factor.
The data and digital revolution is creating greater ability to consider systemic solutions. City leaders are uniquely placed to drive joined-up solutions across previously siloed city operations and services.
Significant low carbon solutions will require private investment and business buy-in. Leadership is needed to bring diverse stakeholders together to create bankable solutions. Wealthier cities may have a role in de-risking approaches for less advantaged cities.
A resilient new world energy
By mid-century an additional 2.5bn people will inhabit our planet. Two-thirds of the 9.5bn global population will live in urban areas. Mayors must take centre stage in acting to combat climate change.
Written for the Global Parliament of Mayors 2018 Congress, Bristol, 22-23 October