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Urban Development

Cities Take Control

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We live in an increasingly urbanized world. Every day, hundreds of people move to cities in search of job opportunities, better services, and infrastructure that can withstand natural phenomenon. Latin America and the Caribbean is the second-most urbanized region in the world and, as cities expand, their challenges also increase. Resilience in the face of disasters, better roads and transportation, more inclusion and access to financing are some of these challenges.

This week, more than 30 mayors and city leaders from around the world met in Buenos Aires to talk about the progress they have made and the obstacles they face, and  especially to discuss how cities – where the largest share of global GDP is produced –  can contribute to the global agenda. We spoke with two experts from the World Bank Group, Ede Ijjasz-Vasquez, Senior Director for the World Bank’s Social, Urban, Rural and Resilience Global Practice, and Gabriel Goldschmidt, director of the International Finance Corporation (IFC) for Latin America and the Caribbean, to discuss their vision for the future of cities, their main challenges and how to address them.

Question (Q): Ede, urbanistic discussions have recently focused on resilience. Could you define urban resilience and give us some examples?

Ede Ijjasz-Vasquez (EIV): While there is no standard definition for urban resilience, most definitions coincide in that it refers to the capacity to manage a wide range of impacts and stresses that can occur in a city. While resilience has traditionally focused on climate change and its impacts – floods, earthquakes, hurricanes, and volcanic eruptions – it is also the ability of an urban system to prepare and adapt itself to technological and socioeconomic changes.  The former ranges from a breakdown and interruption of the water or energy system of a city, to a gas leak, a water pollution event or an explosion at an industrial plant. Socioeconomic changes refer to economic crises, demographic changes, terrorism events, strikes or social and political conflicts.

Q: In Latin America, eight of every 10 people live in cities, but many of them – the poorest – settle in the outskirts and lack access to basic services. How can we promote social inclusion and improve their quality of life?

EIV: The poor live in both downtown areas and the outskirts. Many of them live near the downtown areas to access jobs, often in informal settlements where the housing is more “accessible,” but in precarious conditions. These settlements often lack quality infrastructure and services. For cities to be inclusive, it is necessary to improve these informal settlements. For example, with support from the World Bank and the Inter-American Development Bank (IDB), the government of the City of Buenos Aires is working to improve one of its most vulnerable and emblematic neighborhoods, Barrio 31.  On the outskirts, where most urban growth is occurring, cities must urgently adopt a planning process with a view to the future so that they can provide infrastructure and services along with well-located housing at prices that are accessible to the low-income population.

Q: With respect to employment, how can cities prepare for future labor market challenges?

EIV: Cities in the developing world will have to accommodate a growing youth population that will continue to migrate from the countryside to the city. At the same time, cities in the developed world will have to prepare now for migrations of youth populations from less developed countries, which will accompany the aging of the countries’ own inhabitants. Migrations of people in search of opportunities, displacement due to conflict and violence, as well as an increased incidence and intensity of natural disasters associated with climate change, will increase the size of cities.  At the same time, new technologies present challenges and opportunities for employment. While automation will replace many jobs, it will create new opportunities for others. New technologies have the potential to change the way people travel to work and transform complex markets such as that of real estate. Cities should work together with national governments to develop national urban policies that integrate local sector policies, rethink labor market and job training policies, and use those same technologies to manage cities.

Q: What role should development institutions such as the World Bank play, as well as city mayors, who have an increasingly key role in the future of the urban agenda at the global level?

EIV: Mayors are key players in the development of the global agenda. As cities concentrate the majority of inhabitants, and as they produce the largest share of GDP and greenhouse gas emissions, they are centers where the future of the world’s sustainability will be played out.  Even though this is obvious, cities have not been considered enough in the process to establish the global agenda. Local leaders and mayors have very interesting experiences to bring to the table; the expert knowledge they have of urban problems and their proximity to the population they represent make them key actors for developing alternative, creative solutions to the most complex global problems. For this reason, the World Bank, together with other multilateral agencies, is committed to helping cities promote the exchange of knowledge among them and with national leaders. Likewise, the World Bank is well-positioned to help municipal governments take measures to promote investment in projects that improve the population’s quality of life.

The private sector, a key actor in urban development

Q: Gabriel, transforming cities is expensive. National and local governments have limited resources and high fiscal pressures. How can the private sector be persuaded to help cover the infrastructure deficit in Latin America, which according to some estimates is US$ 180 billion?

Gabriel Goldschmidt (GG): Cities are important centers of investment and economic growth. However, most cities in Latin America and the Caribbean have not grown in a sustainable way in recent decades. In a context of limited public budgets, it is important to consider mechanisms that can  attract private-sector participation while maintaining the objective of improving the quality of life of the population.

City governments cannot do this alone: the needs are simply too great. Innovation and investment of the private sector are crucial for addressing the complex challenges of cities in key areas such as infrastructure, climate change and job creation.  Where private-sector solutions exist, but are limited by weaknesses in the regulatory framework, the public sector and other players that should work together to create policies that enable the development of private-sector proposals. Finally, governments should reserve their limited fiscal budgets to invest in solutions for which there is no private-sector alternative.

For example, for the past 15 years, IFC has invested more than US$ 12 billion in 350 urban projects and advisory services in more than 60 countries, contributing to creating sustainable, competitive cities that attract the necessary private investment for inclusive growth and poverty reduction. Currently,  IFC is working throughout the region with cities as diverse as Buenos Aires, Bogota, Barranquilla, Lima, Tegucigalpa and, soon, San Jose.

Q: How can these ideas of financing and innovation be leveraged to create more inclusive cities?

GG: Well-structured, well-managed private-public partnerships can contribute innovation, efficiency and financing of the private sector in a single package. Bogota has two interesting examples of public-private partnerships. IFC is supporting the city in the development of these partnerships in the health sector for the building of hospitals, something that is highly innovative. The public-private partnership model for educational institutions is also being supported in Medellin and Barranquilla.

Green bonds are another tool that cities can use to attract commercial financing for sustainable projects. Cities are responsible for more than 80% of greenhouse gas emissions in the region. Currently, buildings generate 19% of the greenhouse gases associated with energy and consume 40% of electricity worldwide. Fortunately, many cities are proactively promoting sustainable infrastructure. IFC works with municipalities to implement green building codes. With the banking industry, it facilitates financing of sustainable projects while with real estate developers it supports the adoption of international sustainability certificates for buildings. For example, the EDGE certification, which was created by IFC, requires savings of at least 20% of water and energy and has been implemented in a variety of structures, including accessible housing.

Finally, land value capture is a way for municipalities to recover the value that public infrastructure generates (for example, property taxes, land improvement taxes and others).

World Bank

Urban Development

A City-Led Climate Resilience

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Climate change is becoming a major cause of an increasing rate of weather catastrophes. The heat-trapping greenhouse gas is making Earth’s temperature warms up rapidly from what was planned since the industrial revolution and leading to overlapping problems, especially for the lower to middle-income countries around the equator. Many efforts are strived by stakeholders to minimize negative externalities from climate change, one of them is discussed about loss and damage. For more than 30 years this issue has been raised by developing countries, but the developed countries as the largest emitters always avoid this topic. Last year, at the UN annual climate talks or known as Conference of Parties (COP) 27 at Sharm el-Sheikh, there was a breakthrough regarding the loss and damage. Several countries including Denmark, Belgium, Germany, Scotland, New Zealand, Austria, Ireland, Canada, the US, the UK, Spain, the EU, and France show their commitments to addressing loss and damage fund. When we have been waiting for compensation in an uncertain time and current national action plans are not on track for under a 1.5oC, prior responses from other levels to cope with climate change are done by cities. 

Cities are home to 55 percent of the global population and are expected to grow by 2.5 billion people to 68 percent by 2050. As climate change deprivation many people’s livelihoods, these conditions drive millions of people to migrate to cities with the hope they would gain more opportunities to survive. As a result, many cities have experienced overpopulated and rapid urbanization under climate change without efforts to increase resilience is exposing cities to gain more climate risks. Recorded approximately 225.3 million internal displacements in the Asia and Pacific region happened during 2010 – 2021, especially in the five sub-regions (East Asia, Southeast Asia, South Asia, Central and West, and Pacific). Increasing mobility in the cities has led to the production of approximately three-quarters of energy-related CO2 of the total global emissions. Recorded that as much as 70 percent of cities worldwide are already dealing with the effect of climate change. 

In efforts to tackle the climate crisis, the local government of the cities needs to reinforce the two-prolonged approach which is mitigation and adaptation. Undertaking a human rights-based approach (HRBA) as city-led climate agenda is a tool for realizing ecosystem-based agenda (EbA) which can be implemented through a local climate change action plan where human rights are a fundamental value. For example, Bilbao is a city council that adopted Charted Values, and Utrecht is a Global Goals City that cooperates with local businesses to raise awareness of their rights and monitors progress on the SDGs dashboard. In Asia, Gwangju has established a human rights department, hosted the annual World Human Rights Cities Forum as one of the most relevant events for bringing local government officials with organizations and other actors to establish and arrange systems to ensure human rights as a core, and implementing localization projects. Another example, in efforts to reduce emissions, Seoul has mandatory for their citizen that should be used all new vehicles to be electric from 2025. In addition, to support this program, the city is released electric vehicle charging infrastructure powered by solar panels which are accessible and provides subsidies for electric vehicles of up to 20 percent with additional support available for low-income households. This policy is expected to reduce emissions by approximately 43 percent compares with 2005 levels and create almost 15.000 jobs.

Moreover, hundreds of cities also show their commitment to accelerating net zero emissions by building networks. Recorded as many as 130 American cities are stepping up their ambition to reduce emissions by joining the Cities Race to Zero to help the US reach its goals of reducing emissions by 2030 and achieving net zero by 2050. Last year, the European Commission also announced 100 cities from the EU member states with 12 additional cities participating in EU Mission for climate-neutral and smart cities by 2030 or known as the Cities Mission. Under this mission, the cities will receive millions of funding in the period 2022-2023 to address clean mobility, energy efficiency, and green urban planning, and offer the possibility to build joint initiatives and ramp up collaborations with other EU programs. The ranking compiled by CDP shows that only 43 out of 596 cities or similar to 7 percent received a top rank for their climate leadership and reduction of emissions, which twenty-one of them are in North America, nine in Europe, four in Australia, one in Latin America and Africa, and four in East Asia.

The proportion above, Asia and Africa have a minimum ‘A’ city in reducing emissions. The report mentioned five barriers that limit urban resilience that are multi-level governance, finance, a local capacity, access to technology and innovation, and equity. The Mayor of the City of Bonn, Mr. Ashok Sridharan said that “The adaptation fund has been instrumental in advancing adaptation to the most vulnerable over the past 10 years and ‘walks the walk’. Cities and regions stand ready to help as global adaptation needs continue to rise”. Nowadays, the ten members of ASEAN with a majority of developed countries have slow progress and struggling in energy transition because they have insecure funds. To achieve ASEAN’s target of 23 percent renewable energy supply by 2025 need an investment of US$ 27 billion per year. However, from 2016 – 2021, the ASEAN countries received no more than US$ 8 billion per year. At the global level, the World Bank estimated an amount of US$ 4.5 – 5.4 trillion per year which 9 – 27 percent part of it is aimed to make an urban infrastructure low-emission and resilient to climate risks. However, UNFCCC released there is a gap of US$ 1.8 – 2.4 trillion per year in financing for climate-resilient infrastructure globally with the majority of needed in urban areas.

Cities become a frontline in adaptation and mitigation because they prioritize sustainably local projects faster than a state. Therefore, with the financial barriers to access technology faced by the local governments, the discussion about climate funds should mobilize in the UN annual meeting about climate to enhance climate resilience as a priority within all of the cities, especially in the developing countries in Asia and Africa.

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Urban Development

Net-Zero Buildings: Global CEOs Pledge 50% Cut in Real Estate Emissions by 2030

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Leading CEOs made a pledge today to reduce their real estate emissions by 50% by 2030 and reach net-zero carbon no later than 2050.

With buildings contributing 38% of all energy-related greenhouse gas emissions, leaders across all industries have a critical role to play in lowering their global real estate emissions.

“While real estate represents nearly 40% of all energy-related GHG emissions, the sector is frequently an afterthought when it comes to an organization’s decarbonization and sustainability strategies,” said Matthew Blake, Head of Financial and Monetary Systems, World Economic Forum. “Leaders across all industries have a responsibility to take action on their real estate GHG emissions to ensure progress in the fight against climate change.”

The following companies have pledged to halve their buildings-related emissions by 2030 and reach net-zero building emissions by 2050:

  • Avison Young
  • Edge
  • GPFI Group
  • Ivanhoé Cambridge
  • JLL
  • Majid Al Futtaim Properties
  • Schneider Electric
  • Signify

These firms will meet these targets by implementing the Forum’s Green Buildings Principles. Released last year, the Green Building Principles: The Action Plan for Net-Zero Carbon Buildings provides a clear sequence of steps to deliver net-zero carbon real estate portfolios:

1. Calculate a robust carbon footprint of your portfolio in the most recent representative year to inform targets

2. Set a target year for achieving net-zero carbon, by 2050 at the latest, and an interim target for reducing at least 50% of these emissions by 2030

3. Measure and record embodied carbon of new developments and major refurbishments

4. Maximize emissions reductions for all new developments and major refurbishments in the pipeline to ensure delivery of net-zero carbon (operational and embodied) by selected final target year

5. Drive energy optimization across both existing assets and new developments

6. Maximize supply of on-site renewable energy

7. Ensure 100% off-site energy is procured from renewable-backed sources, where available

8. Engage with stakeholders with whom you have influence in your value chain to reduce scope 3 emissions

9. Compensate for any residual emissions by purchasing high-quality carbon offsets

10. Engage with stakeholders to identify joint endeavours and equitably share costs and benefits of interventions

Developed in collaboration with JLL, the World Green Building Council and the Forum’s Real Estate community, the Green Building Principles can be formally adopted by firms and include an Action Plan detailing implementation.

The Action Plan provides globally applicable guidance on best practices to implement the principles for every stakeholder, from owners to occupiers to investors. Signatories will report progress annually as part of their public sustainability reporting and participate in a Practitioners Group to identify solutions around implementation.

Signatories share why they have pledged the Principles:

“More sustainable real estate is essential,” said Coen van Oostrom, Founder and Chief Executive Officer, Edge. “The Principles offer a clear roadmap to help all building stakeholders tackle their emissions and deliver better buildings. The world deserves better buildings and it is entirely possible to significantly reduce the impact of both existing and new buildings.”

“It’s imperative that we address real estate related emissions,” said Christian Ulbrich, Global Chief Executive Officer and President, JLL. “Getting started is often the hardest part and the Principles offer a simple set of steps to do so. We believe it is easier to get to net zero in the built environment than for many companies to get to net zero in their core businesses and the business case is there to support action.”

“The emphasis on bringing together the world’s leading businesses and public figures to collectively address issues like climate change and driving social change is fundamental to what Avison Young stands for. ESG considerations across the board must be addressed by the real estate sector — buildings have a huge impact on our everyday lives and the planet,” said Mark E. Rose, Chairman and CEO, Avison Young. “We are thrilled to adopt the Green Building Principles and demonstrate to our peers that reaching net zero is not only possible but essential for a better built environment and more resilient and successful cities.”

“By nature, real estate requires long-term thinking and so we have a duty to invest with conviction and build a legacy for future generations,” said Nathalie Palladitcheff, President and CEO, Ivanhoé Cambridge. “We have a collective opportunity and responsibility to decarbonize the built environment and this ambitious commitment will require a transformation of practices across the whole real estate value chain.”

“The industry has traditionally looked at investments in sustainability as a trade-off with other aspects like customer experience, but it’s very clear that we need to shift our mindset,” said Ahmed Galal Ismail, CEO, Majid Al Futtaim Properties. “Sustainability is actually a trade-on and sustainable assets are more valuable. We are committed to transitioning our portfolio and proving what is possible in alignment with the Principles.”

“We have the innovation to both transform the current building stock through electrification and digitalization and develop smart, green buildings of the future,” said Philippe Delorme, Executive Vice President, European Operations, Schneider Electric. “Schneider Electric is proud to adopt the Principles and demonstrate how we can transition buildings to be healthier, more efficient and ultimately net-zero carbon.”

“We continue to be committed to the planet and addressing our real estate footprint” said Harsh Chitale, CEO, Digital Solutions Division, Signify. “The Principles are an ideal way to help every type of company address emissions from the buildings they own and/or occupy.”

“As a facility management company, we play a major role in the drive for adoption and implementation of emission reduction programs,” said Dr. MKO Balogun, Group CEO, GPFI Group. “Our role working with occupiers, owners, and developers of real estate gives us the leverage to drive that commitment, and we are glad to be joining other global leaders on this journey.”

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Urban Development

Traditional building practices offer sustainable solutions as African cities grow

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Image: Kéré Architecture | The Naaba Belem Goumma Secondary School being built

Located on the dusty outskirts of the Burkina Faso town of Koudougou, the Lycée Schorge Secondary School shows what is possible when you mix traditional techniques and new materials.

The school consists of nine modules arranged around a central courtyard, protecting the central space from wind and dust. Each module is built out of locally sourced laterite which is cut into bricks and left in the sun to harden. These bricks absorb the heat during the day and radiate it at night.

A secondary façade made of local eucalyptus wood wraps around the classrooms like a transparent fabric and creates various shaded spaces to protect students from stifling daytime temperatures.

The building, designed by the Berlin-based, Burkinabè founded architecture firm Kéré Architecture, is an example of how countries on the continent are using traditional building techniques to lessen the carbon footprint of their buildings.

Research shows that these techniques can help prevent the need for air conditioning, the long-range transport of building materials and concrete production, all of which contribute to the greenhouse gas (GHG) emissions driving the climate crisis.

With 70 per cent of Africa’s building stock that will exist in 2040 still to be constructed, experts say these energy-saving techniques are crucial.

“Traditional sustainable construction and building practices are a cornerstone of African cultural heritage,” says Jonathan Duwyn, from the United Nations Environment Programme’s (UNEP’s) Buildings and Construction, Cities Unit.

“Locally adapted sustainable design, construction, practices, and materials coupled with renewables and innovation represent a great opportunity for both mitigation and resilience in Africa’s rapidly growing building stock.”

The continent accounts for roughly 6 per cent of global energy demand, with more than half of this coming from its buildings. Given that Africa’s population is expected to reach 2.4 billion people by 2050, with 80 per cent of this growth occurring in cities, it is clear that sustainability needs to be a core principle of all future buildings.

With the launch of UNEP’s 2022 Global Status Report for Buildings and Construction at the UN Climate Conference (COP27) today, the focus is on how Africa can manage this urban growth and increase the resilience of its housing stock while avoiding an increase in GHG emissions.

It is a tall order, yet inspiration can be found in Africa’s past. Travel through Africa today, and hints of this past can be found everywhere, from Eswatini’s beehive huts to the Drogon cliff villages of Mali to the mud-brick mosques of West Africa.

“Africa is rich in renewable energy sources, solar and wind, with nearly half of the planet’s total renewable energy technological potential,” Duwyn says. “Locally adapted sustainable design, construction, practices, and materials coupled with renewables and innovation represent a great opportunity for both mitigation and resilience in the face of Africa’s rapidly growing building stock,” he adds.

This is particularly important given the projected demand for air conditioning units as more people get access to electricity and temperatures rise. “We expect cooling to be a major challenge when it comes to residential energy demand in Africa in the future,” says Duwyn. “This is why it is so important to ensure new buildings use natural cooling systems wherever possible.”

Only 43 per cent of the population had access to electricity in 2021, and the International Energy Agency estimates that African household energy demand by 2030 for cooling will increase the most. 

Another Kéré Architecture project utilizing sustainable design and building practices is the Gando primary school. It is constructed of clay/cement hybrid bricks for a dry-stacked brick ceiling – instead of the more common corrugated metal roof – allowing maximum natural ventilation.

“These projects show that sustainable building practices are possible when innovative techniques are used,” says Duwyn. “And as Africa’s climate warms even more, it is vital that we embrace sustainable building designs that do not need costly and damaging cooling systems.”

As the Building Global Status Report highlights, Africa is rich in natural, sustainable materials such as adobe, laterite, termite mound soil, timber, stone, bamboo, sand and dry vegetation. While traditional construction techniques include rammed earth, sun-dried bricks, compressed earth blocks, wattle and daub, cob, timber-framed construction, sandbag construction and thatched roofs.

Ensuring sustainable materials are used is particularly important, given that according to UNHabitat, more than half the population (excluding in North Africa) live in overcrowded informal settlements, which are particularly vulnerable to the impacts of climate change.

“Quality, sustainable housing is an important way of ensuring vulnerable populations are more resilient to the effects of the climate crisis,” Duwyn says. Particularly the frequency of natural disasters has tripled in the past 30 years, with Sub-Saharan Africa home to nearly three-quarters – 393 million – of the global number of children living in countries affected by emergencies.

As the report makes clear, there is no one-size-fits-all answer to tackling Africa’s future building needs. But, as it is rich in renewable energy sources, and most of its building stock over the next two decades still needs to be built, the continent is well placed to be a leader in sustainable design practices.

UNEP

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