Cities can catalyse green growth: A report from the Penang Symposium on Greening Urban Growth

The February 2012 Penang Symposium on Greening Urban Growth, organised by the Growth Dialogue and Think City, argued that cities have huge potential to drive green economic growth and provide a critical laboratory for innovation, but only if better communication occurs between disciplines and across levels of urban planning. Danny Leipziger (George Washington University and The Growth Dialogue) and Tony Venables (Oxford University and the International Growth Centre) spoke at the event and give their take on the symposium.

The symposium was attended by economists, urban planners, city administrators, environmentalists, and national policymakers looking to debate and share their knowledge on the topic of green urban growth. Cities, as dynamic centres of economic growth, are able to contribute towards carbon abatement strategies, but only if the environment is incorporated at an early stage of planning. Dealing with the environment later is costly and sub-optimal, as is ignoring cities in the development of national growth strategies. Accordingly, the symposium’s aim was to break a siloed approach by bringing together administrators from cities and experts who advise cities and regions to create a more productive dialogue.

In particular, the conversations held between policymakers and the private sector indicated that most leading edge companies are in fact highly focused on the city market and that they are able to provide a range of efficient technical solutions for carbon abatement in ways that are supportive of economic growth in productive, city-based economies.

Why cities?

Cities are dynamic growth engines that house more than half the world’s population and produce four-fifths of global output. Cities are key sites of manufacturing and innovation, incubating new ideas and attracting skill intensive activities and skilled individuals. Evidence from the US shows that larger and denser urban areas have the highest productivity, and also the greatest flow of innovations per worker. Cities also produce approximately 80% of the world’s greenhouse gases (GHGs), but this high share is largely because they are where manufacturing takes place, and where (relatively) rich people live. As places to live, many cities are green, with per person consumption of GHGs (i.e. that are attributable to residents’ consumption including residential use and private travel) less than that in rural areas with comparable incomes. Furthermore, dense cities have the lowest GHG consumption, with both residential and transport emissions inversely related to density of the population.

How can we ‘green’ cities?

Many strategies exist to further promote green urban growth, including the rediscovery of inner cities and reversal of past sprawl. New city developments need to be dense, and to be planned around public transport systems and efficient buildings. Moreover, since mega-regions are as inexorable a trend as mega-cities, planning across larger geographic boundaries can produce gains in environmental quality, increased efficiency of resource use, and the productivity gains associated with economic agglomeration. Interestingly, abatement cost curves for carbon emissions indicate a number of areas where the investments pay for themselves immediately, such as housing codes, transport improvements, and residential energy conservation; indeed, it is estimated that two-thirds of carbon abatement investments pay for themselves. The introduction of spatial planning solutions to specific value-chain segments can add to industrial efficiency and productivity, and more generally, the positive synergies between planning and economic activity remain exploitable.

Ideas for Growth

There is an important distinction to be made between the “greenness” of consumption and production. While the greening of cities is a prevalent policy path, the greening of urban industry is a road less well traveled. The two must be considered in tandem, however, as two sides of the green growth coin, in order to make lasting progress on the green agenda.

The green growth conversation is structured around areas of potential complementarity and areas of possible tradeoff among these twin objectives. The former exist when we consider how the failures to worry about health impacts on workers, floods on infrastructure, and inefficiencies in energy use can impede potential output and retard economic growth. The latter cases occur when the investment costs of green solution are far more expensive than alternatives, and where considerable weight has to be placed on externalities to justify the green course of action.

Two things became very clear from the Penang Symposium. First, specific city experiences show that there are possibilities for reversal from brown to green, even in heavily industrial cities, often using advanced recycling methods of “circularity,” (for example from waste to energy) that are innovative and efficient; the case of Ulsan, South Korea is such a turnaround story. On the side of consumers, Portland, USA was seen as a case of capturing a green dividend from transport planning and revising land use patterns of the past. The use of master-plans in Ahmedabad, India and environmental planning for the future in Haiphong, Vietnam are current examples of anticipating problems and advancing lower-cost solutions by acting earlier rather than later. The notion of growing first and cleaning up later was seen to be an anachronism, a lesson we now see in the policy shifts in China.

Second, national level planning on green growth can be highly effective in providing guidance to individual cities and incentives to act, at times based on competition among cities. The case of Korea’s national green growth strategy, Malaysia’s efforts in this direction, and Singapore’s strong planning ethic all provide regional examples of how the green growth agenda can be effectively pursued in East Asia. Nations will pursue the green agenda in their own self-interest, and the faster and more effectively they do this, the better the global climate change outcome. It is inevitable, however, that the action involve and indeed be led by cities, which contain the largest and a rising share of population as well as a preponderance of both global output and global emissions.

For more on the growth agenda, see The Growth Dialogue.