Low Carbon Cities

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REINVENTING THE CITYTHREE PREREQUISITES FOR GREENING URBAN INFRASTRUCTURES

_ _ _ i i i

REPORT


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Executive Summary

OUR CITIES HOLD THE KEY TO

GLOBAL ECOLOGICAL SUSTAINABILITY. They are the source of more than 70 per cent of carbon dioxide emissions, and depending on howwe develop and manage our urban infrastructures during the next three decades, they couldbecome either a force for environmental destruction or a primary source of ecological rejuvenation.

To achieve the latter result, the US$350 trillion to be spent on urban infrastructure and usageover the next 30 years will have to be directed towards low to zero carbon emissions, partic-ularly in the worlds small but fastest-growing cities and developing nations, where the largestimpacts can be made. There are three prerequisites for this effort:

Cities must adopt aggressive energy reduction goals and best-practiceapproaches to urban planning.

Innovative fnancing strategies are needed to provide $20 trillion to$30 trillion in funding for additional up-front capital costs, with developednations working together to assist developing nations in their low-carbonurban infrastructure initiatives.

The latest technological advances must be utilized to support and enablethe planning, construction, and usage of urban infrastructure in all cities.

If the will can be mustered to aggressively pursue urban sustain ability, and these threeprerequisites can be put into place, forward-thinking and aspiring urban leaders can generateurgently needed reductions in global emissions, produce attractive economic returns bytransforming their cities into centres for ecological innovation, and enhance their energy security.

The Urban ChallengeOur cities play a vital role in the quest to achieve globalecological sustainability. They are the largest contribu-tors to greenhouse gases and climate change. Howev-er, if we can achieve sustainable construction and useof urban infrastructure, our cities could become a criti-cal leverage point in global efforts to drastically reduceemissions and avoid the social and economic costsassociated with climate change, as well as enhanceenergy security and resilience in the face of high fossilenergy prices.

The worlds urban centres already account for more than 7 0 per cent of CO 2 emissions.

1 In the next threedecades, the global population will continue to growand become ever more urban. Booz & Companyanalysis conducted for this report shows that under

business-as-usual (BAU) assumptions, $350 trillionwill be spent on urban infrastructure and usage duringthis period. This huge expenditure either can cause theecological impact of our cities to become even more

pronounced or can be a tremendous opportunity toreduce that impact.

To meet the urban challenge, cities around the worldin developed and developing nationsneed to tackleclimate change directly. Cities in developed nationscan apply new technologies to mitigate greenhousegas emissions stemming from the usage of their exist-ing infrastructure. They can invest in mobility manage-ment and incentivize sustainable lifestyle choices.Cities in developing nations can adopt best practicesin urban planning and mobility management, as wellas technological advances, to design sustainability intotheir new infrastructure. Every city is part of the solu-tionnow is the time to act!

Business as Usual Is a Prescription for Failure

If our cities dont act, it is likely that the opportunityto control global warming will be lost and costs willcontinue to spiral out of control. There is a growingconsensus that the average global temperature


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must not rise more than 2 degrees Celsius over pre-industrial levels if we are to avoid dangerous climatechange. To have a reasonable chance (better than 50per cent) of forestalling such a rise, cumulative globalcarbon emissions must be limited to 870 gigatons ofCO 2 equivalent (GtCO 2-eq) between 2009 and 2100.

2 However, in a BAU scenario, the growth of our citiesin particular, the construction and usage of urbaninfrastructure for dwelling and transportationwillgenerate global carbon emissions of more than 460GtCO 2 in the next three decades alone ( see Exhibit 1 ).Clearly, business as usual is not an option.

The economic cost of climate control also representsa major challenge. Estimates by economists such asNicholas Stern suggest that it will cost an additional1 to 2 per cent of GDP$28.4 trillion to $56.8 trillionover the next 30 years, using purchasing power parity

(PPP) GDP estimatesto combat climate change. Buteven though this level of investment is small comparedto projected urban infrastructure expenditures, thesource of this funding remains uncertain, particularly indeveloping nations.

The Copenhagen Accord sought to address this issueby establishing the Copenhagen Green Climate Fund,which will provide $100 billion annually to help devel-oping countries mitigate carbon emissions by 2020.But it may be too little and too late. First, the targetedfunding level is well below the estimated requirements

to combat global warming and adapt to climate changein developing nations. It corresponds to less than 0.1per cent of predicted annual urban infrastructure in-vestments in developing countries (and even less oftheir overall investments in infrastructure). Second, the

Exhibit 1Urban Infrastructure and Usage Emissions

30-Year Cumulative Urban Emissions(Worldwide, in Gigatons of CO

2)

Note: Totals may not be exact due to rounding.Source: Booz & Company analysis

46

203

145

26

24

Moving goods

Moving people

Private & commercialreal estateInformation & commu-nications technology

Access to electricity

Infrastructure Usage

9118

2

374

timing of the funding is problematic. Global emissionsmust peak and begin to decline by 2015 to have a rea-sonable chance of limiting average temperature risesto less than 2 degrees Celsius. Given these realities,the Copenhagen Accords nancial promises are bestused as seed capital for a stronger mechanism capa-ble of producing a broad range of additional nancingsources as soon as possible. In fact, a new high-level

panel on climate nance, also established through theCopenhagen Accord, has been assigned the very im-portant task of identifying nancing sources that worldgovernments can agree on.

Further, the economic challenge of climate controlpales before the gargantuan needs of cities over thenext 30 years. Our analysis shows that global urbaninfrastructure and usage expenditures in dwelling andtransportation for the next three decades will exceed$350 trillion (under BAU assumptions and in constantU.S. dollars set at year 2000), or five times thecurrent global GDP ( see Exhibit 2 ).

In order to control emissions and meet the economicand public health challenges of urban growth, citieswill need to shift their spending from high-carboninfrastructure to green infrastructure that features zeroor very low emissions. This will require long-term andstrategic action plans to guide capital investmentstowards infrastructure solutions that offer attractivereturns in the form of reduced running costs, zero orlow carbon, and lower air and water pollution levels.

Cities everywhere will need to develop new, greengrowth engines in much the same way that someforward-thinking nations responded to the recession of2008 by greening their nancial rescue plans.

51

30-Year Cumulative Urban Expenditures(Worldwide, in Constant US$ Trillions, Year 2000)

Source: Booz & Company analysis

Infrastructure Usage

31

285249

43

102

0

8

16

169

Exhibit 2Urban Infrastructure and Usage Expenditures

Moving goods

Moving people

Private & commercialreal estateInformation & commu-nications technology

Access to electricity

The Copenhagen Accord sought to address this issueby establishing the Copenhagen Green Climate Fund,which will provide $100 billion annually to help devel-oping countries mitigate carbon emissions and adapt toclimate change by 2020. But even if this goal is met, itwill be too little and too late. First, the targeted fund-

ing level is well below the estimated requirements tocombat global warming and adapt to climate change indeveloping nations. It corresponds to less than 0.1 percent of predicted annual urban infrastructure invest-ments in developing countries (and even less of theiroverall investments in infrastructure). Second, the

timing of the funding is problematic. Global emissionsmust peak and begin to decline by 2015 to have areasonable chance of limiting average temperaturerises to less than 2 degrees Celsius. Given theserealities, the Green Climate Funds nancial promisesmust be met. However what the world really needsis a broad range of additional nancing sources to

feed into the fund as soon as possible. With newnancing sources creating larger nancial ows

and clever use of the funds, there is an opportunityto exceed current expectations.

Cities everywhere will need to develop new, green growthengines in much the same way that some forward-thinkingnations like South Korea responded to the recession of2008 by greening their nancial rescue plans.


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Urbanization TrendsThe challenge of urban sustainability will grow largerwith time, and counterintuitively it will focus on smallercities and developing nations. The worlds populationis moving inexorably towards the 9 billion mark, andmore and more people are aspiring to and achievingdeveloped-economy lifestyles. The ecological footprintcreated by these two trends is currently distributedunevenly among regions. For example, the ecologicalfootprint of the average Tanzanian or Indian isapproximately a quarter of the ecological footprintof a European and a ninth of that of an American.Nevertheless, if the trend continues and the expectedgrowth in carbon emissions is generated, humanity willneed the equivalent of two planets to maintain thoselifestyles by the 2030s 3 (see Exhibit 3 ).

Most of this growth will be in our cities. Cities are

already the source ofmore than 7

0 per cent of globalCO 2 emissions, and they will account for an ever-higher percentage in the coming years, as more andmore people reside in and move to cities in search ofmore prosperous lifestyles ( see Exhibit 4 ).

Green urban investment can be used to turn thistrend by promoting attractive one-planet lifestyleson a large scale. Typically, a citys absolute carbonfootprintincluding imports of emissionsincreasesas it develops and its citizens become wealthier. (Onaverage, as nations become wealthier, their carbon

footprints increase by 57 per cent for each doublingof consumption levels. 4) If we are to avoid an average

temperature increase of 2 degrees Celsius or greater,this historical reality must be altered.

Focusing on Small CitiesThe bulk of urban population growth will not occurin well-known and mature megacities like Beijing,London, Los Angeles, Mexico City, and Mumbai.Instead, it will occur in smaller cities (fewer than 1million), which already account for more than 60 percent of urban dwellers globally 5 (see Exhibit 5 ). For

example, the population of Gaborone, the capital ofBotswana, rose from 17,700 in 1971 to more than186,000 in 2007. By 2020, its population is expectedto exceed 500,000. 6

Built-up land

Fishing ground

Forest

Grazing land

Cropland

Carbon footprint

Ecological Footprint by Component(In Increments of Planetary Capacity)

Source: WWF International Living Planet Report 2008 ; Booz & Company analysis

1.4

1.2

1.0

0.8

0.6

0.4

0.2

01961 05

N u m

b e r o

f P l a n e

t E a r t

h s

World biocapacity

Exhibit 3Growth of the Ecological Footprint (19612005)

Exhibit 4Our Cities Continue to Grow (19802050)

Rural 0.82% -0.44%

Urban 2.53% 1.60%

19802005CAGR

20052050CAGR

World Population(19802005 Historical, 20052050 Forecast)

1980 1990 2000 2010 2020 2030 2040 2050

108

6

4

2

0

Historical Forecast

P o p u

l a t i o n

( B i l l i o n s

)

Urbanization by Region(19802005 Historical, 20052050 Forecast)

North America 0.39% 0.26%

OECD Europe 0.27% 0.33%

OECD Paci c 0.64% 0.36%

China 2.89% 1.31%

India 0.87% 1.46%

ROW 0.86% 0.65%

19802005CAGR

20052050CAGR

1980 1990 2000 2010 2020 2030 2040 2050

100

80

60

40

20

0

Historical Forecast

% U

r b a n

Source: U.N. Population Division; Booz & Company

1970 1980 1990 2000


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As the worlds smaller cities mature, they generallyfollow predictable patterns in the mix of expendituresand emissions related to infrastructure developmentand usage ( see Exhibit 6 ). During the early stagesof city development, the bulk of expenditures andemissions stems from construction of buildings,public transportation, and utility infrastructure, suchas energy and water. As the maturation processcontinues, ongoing energy usage increases as thecity grows in extent (and, not entirely coincidentally,

in wealth) until the bulk of expenditures and emissions

comes from the use of existing infrastructure.Hence, it is during the formative period of a cityslife that opportunities to dramatically impact long-term infrastructure expenditures and emissionsare greatest.

The fact that growth is occurring fastest in smallcities that are still in the process of developing theirinfrastructure creates a valuable opportunity todecouple the global urban future from expensive,high-carbon lifestyles. But it also represents amajor challenge: Smaller cities typically have fewerresources available to support infrastructure planningand address climate change. In a global survey,conducted by Booz & Company and WWF, of themeasures being adopted by cities to addressclimate change, only one of three smaller cities haddeveloped even a preliminary strategy for managing

climate change, compared to more than 50 per centof larger cities. 7

Focusing on Developing NationsEnergy usage in residential and commercial buildingsin some industrial regions, such as North Americaand the Paci c members of the Organisation forEconomic Co-operation and Development (OECD),will be relatively high compared to investments overthe next three decades. But investments in developingeconomies will be high overall compared to usage.This suggests that there is a window of opportunity

to drive down emissions and expenditures in a cost-

Exhibit 5Urban Population Growth

Exhibit 6The Infrastructure Life Cycle of Cities

Urban Population Growth Rates by City Size(20092025)

Source: Demographia World Urban Areas & Population Projections(www.demographia.com/db-worldua2015.pdf); Booz & Company analysis

10.0million

4.19%

1.98%1.56% 1.37% 1.16%

Typical City Expenditures and Emissions Trajectory

Initial City Growth(Formative Period) Infrastructure

build-out Low energy

consumptionintensity

Increasing City Wealth Incremental infrastructure

to keep up with growth Increasing energy

consumption intensity withrising wealth & population

City Maturation City saturation requires

little additional new build Consumption high,

but leveling off

E x p e n

d i t u r e s

( $ )

Time

Usage

Infrastructure

Types of Expenditures Power grid Road infrastructure Mass transit system

Buildings

Incremental road network Private vehicles Basic household necessities

Power generation tokeep up with demand Buildings

Additional household appliances Commuter travel Goods & services

Source: John E. Fernandez, Resource Consumption of New Urban Construction in China, Journal of Industrial Ecology , Vol. 11, No. 2; Booz & Company analysis


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ef cient way over the long term in the developing world(see Exhibit 7 ).

These infrastructure outlays will mainly be driven bythe growth of urban populations in the developingnations of Asia and Africa, where an additional 1.7billion people are expected to make cities their homeover the next 30 years ( see Exhibit 8 ).

Given the rate of urban growth in developing nations andthe early stage of their infrastructure development efforts,it is clear that they can offer the highest returns in thequest for urban sustainability, even if they are currentlyless equipped to deal with the challenge. And given theoutsized energy usage of cities in developed nations, it isalso clear that developing nations should not adopt theirinadequate transportation systems and energy-wastinghouse and building stock as a norm. Instead, developing

nations must be supported in a drive to minimize energyuse and undertake a shift to renewable energy sourcesthat will enable low-carbon lifestyles for city dwellers.

The rst step in such an effort should be long-term,strategic-level, low-carbon action plans, supported by aholistic national urban planning approach that enablesthe integration of large mainstream investment owsrather than a project-by-project approach on the sidelinesof core development strategies and decisions. It will alsorequire capacity building for policy making and nancial

instruments to assist the cities in developing nations withthe up-front investments needed to create and undertakelow-carbon initiatives. Such support should be an impor-tant part of any global climate negotiation outcome.

The Planning PrerequisiteA citys energy intensity per capita tends to decreaseas it matures. This decrease occurs due to a shift in themix of industries from energy-intensive manufacturingto the lower energy requirements of service industries.It can also occur because of the natural responses tohigh population density.

The most obvious example of the positive role of urbandensity is transportation, one of the major components ofenergy and emissions intensity. For example, in Toronto,transportation emissions per capita are almost four timeshigher in low-density areas than in high-density areas

(see Exhibit 9 ). Cities with high densities tend to havebetter-developed public transportation infrastructures andlower transportation emissions. They restrict car use andlimit parking spaces, they make cycling and walking at-tractive, and they provide easy access to public transpor-tation. In short, they plan for more effective transportation.

The effect of urban planning on emissions is best illus-trated by comparing U.S. and European transportationemissions. Since the 1950s, a period during which theU.S. experienced a high urbanization rate, most cities

Source: Booz & Company analysis

N o r t h

A m e r i

c a C h

i n a I n d i a

M i d d

l e E a

s t

R e s t o f

D e v e l o p

i n g A s i a

A f r i c a

L a t i n

A m e r i

c a

T r a n s i t i o

n i n g E

c o n o

m i e s

O E C D

P a c i

c

O E C D

E u r o p

e

30-Year Cumulative Energy Usage Spendin Households and Commercial Buildings(20052035, in Constant US$ Trillions, Year 2000)

11.0

5.13.9 4.5

12.3

3.42.1

3.12.2

3.9

DevelopedEconomies

DevelopingEconomies

N o r t h

A m e r i

c a C h

i n a I n d i a

M i d d

l e E a

s t

R e s t o f

D e v e

l o p i n g

A s i a

A f r i c a

L a t i n

A m e r i

c a

T r a n s i t i o

n i n g E

c o n o

m i e s

O E C D

P a c i

c

O E C D

E u r o p

e

30-Year Cumulative Householdand Building Construction Investment(20052035, in Constant US$ Trillions, Year 2000)

24.919.8

4.7 5.2

49.6

17.1 15.3

6.912.3 13.0

DevelopedEconomies

DevelopingEconomies

Buildings

Households

Exhibit 7Construction Investment and Energy Usage by Region (20052035)


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Exhibit 8Urban Population Growth by Region (20052035)

Exhibit 9Higher Density, Lower Emissions Per Capita

Urban Population Growth Rates by Region(2005-2035)

Total PopulationCAGR 20052035

1,168

540

144101181277

127

Industrialized regions

Developing regions

22% of growth in urban

populations will come fromIndia & China

NorthAmerica

OECDEurope

OECDPaci c

TransitioningEconomies

MiddleEast

LatinAmerica

Africa DevelopingAsia

1.04% 0.60% 0.28% 0.46% 2.00% 1.16% 3.01% 2.25%

Source: U.N. Population Division; Booz & Company analysis

have been planned to accommodate auto transporta-tion for every individual. In contrast, European citieswere largely planned before the widespread ownershipof cars. As a result, transportation emissions per capitaare almost three times higher in the U.S. than in mostEuropean countries, including Germany, the UnitedKingdom, and France. 8

Population density also has a signi cant impact onemissions associated with habitation. Denser landuse is highly correlated with denser individual housing

units, which in turn lead to lower demands for heating,cooling, and lighting, the principal uses of residentialenergy in the industrialized world.

The net result is that increasing urbanization,industrialization, and wealth not only are inevitablebut will generally have a negative ecological impact. Higher population densities may have lower emissionsper capita, but their total energy usage is higher. Thesolution is better planning, with high density as one ofthe central aspects of that planning.

With an integrated approach to urban planning thatutilizes modern technology, it is possible to achievelower carbon emissions from transport and buildings inany city. For example, there are proven solutions, suchas electri ed public and private transportation fuelledby renewable energy and zero-energy buildings, thatwork regardless of population density. What theyrequire is careful and holistic planning, such as thedevelopment of smart grids that can collect and storeenergy, manage variations in electricity loading, andallow for the increased use of renewables.

The Investment PrerequisiteGiven the estimated $350 trillion that will be spenton global urban infrastructure and usage for dwelling

and transportation over the next three decades, it isessential that these investments be directed towardszero-carbon infrastructure. An investment of $22trilliononly 6 per cent more than BAU estimatesingreen dwelling and transportation technology in citiesglobally over the next 30 years will decrease theemissions from usage of the urban infrastructure bymore than 50 per cent, as well as reduce the need forfuture expenditures by $55 trillion. This represents arelatively aggressive case, but it offers an attractivetrajectory towards zero emissions and a reasonable

chance for limiting global warming to below 2 degrees(see Exhibit 10 ). With a much less aggressive

Estimated Greenhouse Gas Emissions/Person(Kg CO 2 Equivalent/Year, Toronto)

Source: Comparing High and Low Residential Density: Life-Cycle Analysis of Energy Useand Greenhouse Gas Emissions, Journal of Urban Planning and Development , March 2006

Low Density(57 Persons/ha) High Density(269 Persons/ha)

Construction material

Building operations

Transportation

8,637

3,341


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approach by our cities focusing on smaller, incrementalchanges, modelling of a medium case shows thatthe emission reductions become signi cantly smallerand the chance for limiting global warming to below 2degrees will thereby completely disappear eventually.

Accordingly, nations that are in the later stages ofthe urban infrastructure life cycle with high-carboninfrastructures should give high priority to large-scaleprograms designed to reduce the emissions that havebeen built into the infrastructures of their cities.They should apply the latest technologies to mitigatecarbon emissions from their old stock and also setambitious and challenging standards for guiding theirfuture investments.

Decision makers, especially mayors, in developingcountries must also seize the opportunity to allocatetheir nancial resources in a strategic way that freesurbanites from high-cost, high-emission infrastructures.Surely, they will need support, particularly in fundingup-front capital costs. This support will also acceleratethe global development of green technology and re-duce solution costs through economies of scale for allof the worlds cities and nations.

The Technology PrerequisiteThe application of transformational socio-technical

solutions is the third prerequisite for providing zero-carbon energy services in our cities. Over the next 30years, we will need to develop and apply costly andenergy-ef cient technologies at an unprecedented

rate and on a global scale if we are to enable sustain-able lifestyles.

We cannot afford to continue to focus on small, incre-mental technology changes, such as car engines that

offer a few more miles per gallon or air-conditionersthat offer 5 per cent increases in ef ciency. Incremen-tal technological improvements cannot provide the ab-solute emission reductions needed given the rates atwhich our cities and consumption levels are growing.

The technological solutions that we seek must offertransformational levels of improvement. We need toplan infrastructures and use nancial leverage from theenormous investments to create zero-carbon infrastruc-tures that feature the intelligent use of renewable energysources. These will likely include solutions integratingrenewables like the electri cation of private vehicles,public transportation run on electricity and biogas, andthe use of district cooling and heating, LED, and naturallighting in buildings.

Some of the technologies needed for meeting theurban challenge are already competitively priced, butthere are many others whose deployment costs mustdecrease rapidly if they are to be widely adopted. Itis essential that we see the $350 trillion that will beinvested in urban infrastructure and usage in the next

30 years as an opportunity for cities to become earlyadopters and investors in these solutions. In this way,cities can play an instrumental role not only in reducingour global carbon footprint but also in helping to reduce

30-Year Cumulative Urban Expenditure(Aggressive Case, in Constant US$ Trillions, Year 2000)

BaseCase

Cost toAchieve

Savings EndCase

Usage

Infrastructure

$351

$77

$296

$249

$22

$23

$248

$102

$54

$48

30-Year Cumulative Urban Emissions(Aggressive Case, in Gigatons CO 2)

BaseCase

Cost toAchieve

Savings EndCase

Usage

Infrastructure

465 198

280

91 100

374

194

180

Note: Totals may not be exact due to rounding.Source: Booz & Company analysis

13

3

Exhibit 10Urban Infrastructure Expenditures and Emissions with Green-Tech Investments


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technology costs by driving scale. Reducing the pricefor solar electricity can exemplify these challenges.More investments in solar photovoltaic developmentprojects and installations can push down costs fasterthan the current rate ( see Exhibit 11 ).

As early adopters, cities can also take an active role inspurring corporate, private, and governmental entre-preneurship around these solutions. In the best cases,as described in the next section, this activity will alsocreate new streams of revenue for cities to serve asentrepreneurial hubs that sell successful solutions toother cities and countries.

There is also a unique historic opportunity to utilizethe information and communications technology (ICT)developments of the last 15 years to reduce energy useand emissions. Consider the application of ICT to busi-ness meetings. Remote meetings, conducted via com-puters over networks, can totally eliminate expensiveand carbon-emitting travel for participants. Anotheralternative available today, e-shopping, makes it easierfor families and businesses to purchase goods in amore energy-ef cient way.

Further, ICT can play an important enabling role in theavoidance of high-emission infrastructures. It supportsthe construction of smart/green buildings with features

such as leverage sensors and controls designed to im-prove ef ciency and tailor energy use to actual demand.ICT also provides tools for urban planning, such as simu-lation software that can help planners optimize the loca-

tion of schools, health services, and public transportationroutes in order to reduce mobility needs and supportlow-carbon lifestyles. Finally, ICT is an essential enablerof smart grids, which we will need in order to signi cantlyincrease the share of renewables in our power grids. 9

The Low-Carbon City Is Already EmergingUrban sustainability is a great challenge that willrequire a major and concerted effort by cities andnations around the world. But our vision of low-carboncities is no pipe dream. The WWFs Low-Carbon CityInitiative in China is exploring low-carbon developmentmodels in different cities and disseminating its ndingsthroughout the country.

There are also several notable examples of sustainableurban planning and emerging clean-tech hubs that areleading the way to a low-carbon future. Among them:

Baoding, a city in the Chinese province of Hebeithat is building its local economy by providing cleantechnology to other cities

Malm, in the south of Sweden, which is undergoinga green metamorphosis through sustainable urbanplanning

Masdar, the planned urban environment in Abu Dhabithat aims to utilize clean tech to minimize its ownecological footprint, as well as to house about 1,500

clean-tech companies in the future

The challenge for these cities is to provide attractivezero-carbon lifestyles for inhabitants and jobs in theemerging industries that are increasingly providingsolutions around the world.

From urban brownfeld to global solution provider: Asin many cities in developing nations, emissions levelsare rising in the Chinese city of Baoding, but unlike withother cities, a share of Baodings emissions growth iscaused by fuelling its workforce and the machinery it isdeveloping to provide low-carbon solutions to the rest ofthe world. Solar photovoltaics, wind power, and energy-ef ciency industries have been a major source of Bao-dings green growth engine for the past ve years, andthe city is determined to expand further.

Nationally recognised as the Green Electric Valleyof China, Baoding has seen the number of its greenenergy companies expand from 64 in 2005 to 200in 2008, and its green revenues have more thanquadrupled in the same period, from $700 million to

$3.5 billion. An estimated 13,500 new jobs (mainly low-paying labour jobs)almost 10 per daywere createdin Baodings renewable energy and energy-ef ciencyindustries between 2005 and 2008, and exports

Exhibit 11The More We Invest in the Solutions,the Faster the Solution Cost Decreases

Prices of Crystalline Silicon PV vs. Thin-Film,Low-Price Bulk-Purchase Crystalline PV(20072025, in US$)

Source: Utility Solar Assessment (USA) Study: Reaching Ten Percent Solar by 2025,Clean Edge and Co-op America, June 2008

Crystalline silicon PVThin- lm, low-price bulk-purchase crystalline PV

$7

$6

$5

$4

$3

$2

$1

02007

A v e r a g e

P r i c e p e r

P e a

k W a t

t I n s

t a l l e d

2010 2015 2020 2025

Urban sustainability is a great challenge that willrequire a major and concerted effort by cities and na-tions around the world. But our vision of low-carbon cities is no pipe dream. The WWF EarthHour City Challenge is an initiative which aimsto highlight inspiring examples from cities aroundthe globe.

The following are notable examples of sustainableurban planning and emerging clean-tech hubs thatare leading the way to a low-carbon future:


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increased more than 17-fold during the same period,from $58 million to $1 billion.

The preliminary ndings of a WWF Baoding studyshow that the solar and wind energy productsmanufactured in Baoding up until 2008 will, over theirlifetimes, reduce more CO 2 emissions where theyare used than the emissions from the entire city ofBaoding, including all of its industries.

New lease on life for an urban brown eld: The Swedishcity of Malm is setting a shining example for cities inlater stages of their infrastructure life cycles. To reduceits ecological footprint, the citys government has formu-lated a set of environmental objectives including energyconsumption reductions of at least 40 per cent percapita by 2030 (based on consumption levels from 2001to 2005) and a 40 per cent decrease in greenhouse gas

emissions by 2020 (calculated from 1990). In addition, itplans to use 100 per cent renewable energy for the citycouncils own operations by 2020 and 100 per cent re-newable energy for the municipality as a whole by 2030.

Malm is also seeking to achieve sustainable agri-culture and to minimize noise and air pollution in thedesign of its traf c system. To reach some of its objec-tives, the city will replace fossil fuels, in phases, withenergy sources such as solar, wind, water, and biogas.Electric rail and other electrically driven public transport,and crop-free and pesticide-free zones in its agricultural

sectors, will also help it reach its objectives. In addition,Malm plans to build up its existing clean-tech business-es and attract new business by continuing to develop asan innovation- and knowledge-based city.

An urban green eld: Already in the formative periodof its infrastructure life cycle, Abu Dhabis Masdar Citywill rely on renewable energy, be carbon neutral, andachieve zero waste. Among the green-tech solutionsplanned for the city are innovations such as solar-powered vehicles, which an expected 40,000 residentswill share, and traditional ideas, such as narrowalleyways between buildings that will offer shade andlimit the need for air-conditioning.

Masdar City is part of a greater initiative that willinclude the Masdar Institute (which will providegraduate-level education and research in clean andsustainable technology) and a carbon managementunit that will develop greenhouse gas emissionsreduction projects. It will also incorporate a utilities andasset management business unit that aims to capturea share of the global renewable electricity production

market and a business unit that aims to positionMasdar as a leading global investor in renewableindustries as well as to contribute to transforming AbuDhabi into a major producer of renewable technology.

ConclusionThe three prerequisites highlighted in this reportur-ban planning, investment, and technologyare essen-tial in the drive to achieve zero-carbon lifestyles. In ad-dition to increasing our chances to limit global warmingto less than 2 degrees Celsius, aggressively address-ing emissions in urban infrastructures can provide higheconomic returns and enhanced energy security. Incontrast, BAU and less substantial ef ciency improve-ments in our urban infrastructures over the next 30years will not be enough to achieve those results.

Urban planning and the modern tools that support itwill help cities make the right choices to maximize theirlong-term results. Investments must be carefully tar-geted and leveraged to reduce greenhouse gases andlower the costs of more sustainable lifestyles for every-one on the planet. Finally, technological advances will

support and enable the drive for low-carbon cities.

The challenge is clear: Our cities must present holistic,inspiring, aggressive, and credible urban plans forreaching zero or very low emissions within the nextfew decades, nding innovative ways to nance themand utilizing every technological advance at theirdisposal. The need is urgent: If our cities do not meetthis challenge, all of our futures are at risk.

AppendixBaseline: Key Assumptions

Our estimates for cost and emissions expenditures arefor a 30-year period, from 2005 to 2035. We applied theU.S. Energy Information Administrations geographicgroupings to bundle individual countries into ten regionsfor our analysis: North America, OECD Europe, OECDPaci c, transitioning economies, China, India, rest ofdeveloping Asia, Middle East, Africa, and Latin America.

To forecast expenditures through 2035, we selectedpurchasing power parity (PPP) GDP per capita as theprimary driver in predicting urbanization cost trends.We obtained historical and projected population data bycountry from the U.N. Population Division, and historicaland projected GDP data by country from Global Insight.

Our analysis relies heavily on published and publiclyavailable sources of data. This data was regressedagainst national and regional infrastructure and usagedata to determine future expected levels of urban de-velopment. For carbon emissions, our analysis incor-porates the emissions embodied in the infrastructureas well as those associated with its usage.

Savings: Key Assumptions To identify savings opportunities, we modelled emissionsand cost reductions in seven areas: (1) constructing greenbuildings, (2) retro tting existing buildings, (3) improving


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public transportation, (4) increasing clean vehicles, (5) ap-plying smart logistics, (6) teleworking, and (7) e-shopping.

For each opportunity, we aggregated our geographicgroupings into developed or developing countriesto adjust the savings impact depending on regionaldevelopmental progress.

We estimated cost and emissions savings based on pub-lished information and subject matter expertise on futuretrends for each opportunity. The calculated total savingsincludes the cost of the infrastructure investments andthe cost and carbon reductions achieved. Furthermore,the estimated total savings represents the cumulativeimpact of the seven savings opportunities combined.

Additionally, we applied a medium-case and anaggressive-case scenario for each opportunity to esti-

mate the full range of future savings ( see Exhibit A ).

Savings/Ef ciency& Cost Assumptions

Assumptions also include factors for: Occupations amenable to teleworking

(included as part of the percentage below) Decrease in commuter travel (33%) Increase in residential space (1%) Reduction in commercial space requirements (5%) ICT needed for support (0.2%)

Assumptions also include factors for: Reduction in car travel (14%) Reduction in retail storage requirements (28%) Reduction in freight travel (16%) ICT needed for support (26%)

Assumptions also include factors for: Reduction in private car travel (90%) ICT needed for support (0.1%)

Assumptions also include factors for: Increase in vehicle energy ef ciency(20% cars, 25% trucks)

Assumptions also include factors for: Household and commercial ef ciency

improvements (41% residential, 71% commercial) Green building cost premiums (2%)

Assumptions also include factors for: Household and commercial ef ciency

improvements (33% residential, 35% commercial) Cost of green retro tting (17%)

Assumptions also include factors for: Reduction in road traf c (14%) Reduction in warehouse space requirements (24%) ICT needed for support (19%)

Medium-CasePenetration Assumptions

50% developed 50% developing



10%/25% developed(cars/trucks) 10%/25% developing

(cars/trucks)

25%/60% developed(residential/commercial)

40%/50% developing(residential/commercial)

10%/30% developed(residential/commercial)

10%/20% developing(residential/commercial)


Aggressive-CasePenetration Assumptions








Teleworking

E-Shopping

ImprovedPublic Transit

IncreasedIntroduction ofGreen Vehicles

Green BuildingConstruction

Retro tting ofExisting Buildings

Smart Logistics

Penetration Assumptions by 2035 (All Other Assumptions Remain Constant)

Exhibit AAssumptions for Medium- and Aggressive-Case Scenarios

References1 Anon, 2005. Climate Change: The Role of Cities . UN-HABITAT2 Hhne, N. and Moltmann, S. 2009. Sharing the Effort under aGlobal Carbon Budget . WWF International, Ecofys.3 Anon. 2008. Living Planet Report 2008 . WWF International.4 Hertwich, E.G. and Peters, G.P. 2009. Carbon Footprint ofNations: A Global, Trade-Linked Analysis. Environmental Science& Technology (Vol. 43, No. 16), pp 64146420.5 Anon. 2007. State of World Population 2007: Unleashing thePotential of Urban Growth . United Nations Population Fund.6 Ibid.7 Anon. 2009. The Worlds First Global Market Survey on LowCarbon IT: 100 Cities and 100 Companies Expectations from ITin Relation to a Low Carbon Future. WWF International,Booz & Company.8 Hhne, N., Eisbrenner, K., Hagemann, M. and S. Moltmann.2009. G8 Climate Scorecards 2009 . WWF International, Allianz.9 Pamlin, D., Pahlman, S. and E. Weidman. 2009. A Five-Step-Planfor a Low Carbon Urban Development . WWF Sweden, Ericsson.10 http://www.wwfchina.org/english/.


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