A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing.
—Oscar Wilde1
What will cities be like if—when—the four transformational ideas we’ve described take hold? The ideas and their innovations have traction in cities worldwide, and in markets, professions, and government policies, but they have a long way to go to gain unstoppable momentum and widespread impact. Others who have peered into the future of the climate-change era provide utopian images of urban life.
“Everyone would live in a small, efficient home of about 46 square meters [495 square feet], eat a vegetarian diet, and get around on non-fossil-fuel-based transportation,” offers Jennie Moore, an urban sustainability expert at the British Columbia Institute of Technology, describing what a sustainable Vancouver would look like. She and colleagues have a jokey shorthand for this: “closet-dwelling vegans on bikes.”2
Eric Sanderson, author of Mannahatta, which reconstructs what the hilly island at the heart of New York City was like in 1609, before Europeans arrived, looks ahead four hundred years: “One thing is certain: The city of the future will be different from the city of today.” He envisions a city operating on renewable energy, buildings layered with gardens, streetcars running along greenways, suburbs replaced by dense cities and agricultural belts, sustainable fishing in the harbor, streams with headwaters in green rooftops, and beavers in Central Park: “More than ever, we will be a city of walkers and talkers, drawn from cultures all over the globe.”3
Gino van Begin, secretary-general of ICLEI-Local Governments for Sustainability, paints a street-level picture: many people are riding bicycles, the air is fresh, native trees line the streets, parks host people of different languages, rain gardens absorb storm water, organic waste feeds green space, and dark night skies show constellations of stars. City residents reuse, share, and exchange things in new patterns of consumption without waste. They share electric cars, sell their excess solar power to the grid, and ride biofuel buses to work. Green jobs grow the city’s economy.
These imagined (and hopeful) futures evoke new technologies and lifestyles, the applications of the big ideas that are already shifting the model for urban development. They emphasize that in cities intensely engaged in climate innovation, the true prize is city livability and well-being, and climate action is a way to get there.
“For some,” van Begin says, “the notion of living in a sustainable city can feel vague and distant, a dream of the future. But others are already living in this city or are advancing quickly towards it.”4 He’s right: many of the advancing cities are the innovation labs we’ve described and other leaders or early adopters.
But no city has put together the entire package of climate-driven innovations. You have to stitch together selected features from certain cities—Copenhagen’s bicycle network, Melbourne’s tree canopy, Shanghai’s electric vehicles, San Francisco’s recycling system, Rotterdam’s water-management infrastructure, Mexico City’s bus rapid transit corridors—to form a made-up whole.
In some lab cities, though, a version of low-carbon and more climate-resilient living is becoming available.
When Christina Salmhofer started working at Stockholm’s Royal Seaport in 2011, the 583-acre industrial site along the Baltic Sea had been prepared for new development, but nothing had been built on it yet. Seven years later, the Seaport is in one of the world’s growing number of low- or no-carbon and climate-resilient districts, a place where urban climate innovations are being integrated at district scale. More than three thousand apartment units have been built—half are rentals, half for sale—but this is only about a quarter of the way to a build-out of twelve thousand residences with thirty thousand dwellers, some thirty-five thousand workplaces, and 6.5 million square feet of commercial space. Demand for the living space “is very, very large,” says Salmhofer, and people are paying market rates.
The Royal Seaport is an experiment in making a future city within an existing city. The city-owned site, once a royal hunting area, is two miles from the city center, contains an active port with ferries and cargo ships, and connects by subway and electric bus with the rest of the city of nearly one million inhabitants. It’s a beehive of construction and demolition, torn-up roads, detours and large trucks, and cranes and partly completed buildings. But in neighborhoods that have been completed—streets with wide sidewalks and five-story, balconied apartment buildings with ground-floor shops, as well as green-certified buildings for preschools, all surrounded by green space, plantings, and trees—everyday city life is under way.
“This is a beautiful area, close to a national park,” says Salmhofer, director of the seaport district’s four-person sustainability team and an experienced environmental manager in the real estate sector. Back in 2009, the city decided the area should become an international model for urban sustainability. It developed a master plan with standards for energy and water use, waste management, and green space, then put opportunities for development up for bid. When completed in 2030, at a projected cost to the city of $2.6 billion for streets, parks, and other infrastructure,5 the seaport will be a dense, fossil fuel–free, inner-city neighborhood of diverse buildings with four to eleven floors and some high-rise towers. A third of its energy will be produced in the district, including by rooftop solar panels, a district heating system will run on biofuels, and a smart electricity grid will manage building energy consumption.
People will use a network of bicycle and walking lanes, electric-vehicle charging stations, and a bus fleet running on biofuels. The landscape will contain parks, urban gardens, green roofs and walls, a water arena and canal, and even beehives. A vacuum disposal system—color-coded chutes—in buildings and on streets will handle plastic packaging, paper, and general waste; kitchens will have disposal units for collecting food waste that will be used to produce biogas. The entire waterfront site has been designed to handle climate changes—increased rainfall and heat, rising seas—by raising ground levels for buildings and using green infrastructure extensively.
The development of low-carbon districts is spreading, but real progress toward a fully realized new global model for urban development lies in the decades ahead. Even in lab cities, innovations advance along a ragged edge, some running ahead, others behind.
As climate innovation moves into the global urban mainstream, innovation lab cities must continue to be sources of continuous advancements. This is a crucial and difficult role even for experienced cities. The many real-world challenges of innovation don’t disappear, even as a city gets better at making changes happen. The course of innovation never does run smooth. Innovation lab cities keep having to overcome the everyday difficulties of innovating—sustaining political will, developing technical capacities, engaging community members, managing the economic impacts of change, and balancing climate innovation with the city’s other priorities. Ambitious cities start many projects, but fully implementing them and impacting systems and the entire city is hard to do and takes time.
Innovation lab cities must continuously improve the innovations they already have under way. They must address key challenges that arise from the successes they’ve had: how to integrate innovations in districts, systems, and citywide and how to ensure that cities have the authority and resources needed to keep pushing urban transformation. And they must deal with questions that come when advancing the transformational ideas we’ve identified.
Lab cities have to keep refining already-developed innovations to improve their performance, even as they work on new ones to drive transformation even further.
Copenhagen, for instance, is a world leader in the use of bicycles to get around the city, but it wants to increase this habit even more. “A lot of the solutions for our network for bicycles, which is so important here, are developed in cooperation with bikers,” says the city’s Jørgen Abildgaard. “We ask them, ‘Where are links missing? How can we transform the city so it’s easier to bike?’” When the city published an online map of the bicycle network, within ten days, citizens placed ten thousand dots on the map—red ones for a lack of safe infrastructure, black for too narrow a bikeway, and blue for high levels of congestion. City planners use the data to plot new investments.6
Cities are still at an early stage of understanding just how well a green-infrastructure project will perform—how much water it will retain, how much it will cool the air. Performance depends on a number of variables, including soil condition and the maturity of the trees and plants. Some research shows that although large trees (at least fifty feet in height) produce much more canopy than small trees, their environmental performance does not become significant until they are thirty feet tall.7 A 2015 assessment of some of New York City’s installed green infrastructure—including green roofs, permeable pavement, street swales, tree pits, and rain gardens—noted success in retaining up to one inch of storm water but found that the underlying soil’s condition impacted this performance.8 Shanghai and fifteen other Chinese cities are experimenting with using green infrastructure to capture and reuse at least 70 percent of rainwater, in a “sponge cities” initiative to address chronic and worsening urban flooding and water shortages.9
Lab cities often have to build on previous innovations so they can be used to transform an urban system. For example, as alternative fuels are increasingly used in transportation, it becomes critical to develop widespread fueling infrastructure to supply vehicles. Sydney, Melbourne, and Yokohama used a grant from the Carbon Neutral Cities Alliance (CNCA) to study how cities can support the deployment of refueling stations for hydrogen fuel-cell electric vehicles, which are being mass-produced by some automobile manufacturers. The cities developed a blueprint guide to help cities prepare, review, and approve applications for hydrogen refueling stations in accord with international best practices.10 Meanwhile, other cities have been researching and experimenting with the use of new technologies for transportation innovation, such as autonomous vehicles and “dockless” bicycles for bike sharing.
As lab cities install and accumulate climate innovations that apply transformational ideas, they encounter “next-generation” puzzles that must be addressed for long-term urban evolution.
They have to figure out how to integrate innovations so they function effectively at the neighborhood/district scale, like Stockholm’s Royal Seaport, and also at the scale of core urban systems and citywide plans and regulations. How will innovations for reducing GHG emissions in buildings, transportation, waste, and energy supply fit together? How will they fit with innovations for green infrastructure, storm-water management, and other ways to strengthen a city’s climate resilience?
The cities also have to figure out how to obtain the governance control, technical competencies, and financial resources they need to press on for the next decades. How can they, in other words, redesign and strengthen their underlying “operating systems” to more fully enable climate innovation?
These critical concerns live at the edge of urban climate innovation—where the lab cities’ know-how and experience ends and additional experimentation begins. This emerging frontier is becoming fertile ground for change.
To highlight what’s being learned about integrating climate innovations at multiple scales, we’ve drawn on examples from several innovation lab cities: Stockholm’s low-carbon Royal Seaport district, one of the leading cases in the world; the Seattle Public Utilities’ (SPU) water- and waste-management systems, which serve 1.4 million customers in the city and region; and Portland’s comprehensive plan for the city’s next twenty years of development, which incorporates extensive climate innovation into future land use.
A decarbonized district—a concentrated, bounded place—affects just a small slice of each city’s land mass, built environment, and population. But new districts in Stockholm and other lab cities provide test-and-demonstration sites for the feasibility of integrated innovations and whether they sum to a product that people want. Working at neighborhood scale instead of at building-and-parcel scale, notes urban-policy journalist Emily Badger, allows district designers to “play with all the infrastructure that connects those parcels—the utility grid, the street network, the sidewalks.”11 A big factor in the emergence of new districts is how much control a city has over land and other assets and decision-making processes. Stockholm, for instance, owns all the land on which the Royal Seaport is developing, and this gives it substantial authority over development. These districts also use principles for urban design that can be applied to other parts of the city over time. Creating low-carbon districts, says Lucia Athens, Austin’s chief sustainability officer, helped the city “better articulate what Austin is trying to achieve at the neighborhood scale.” The Royal Seaport “is becoming a role model for other developments in Stockholm,” says Salmhofer. The district’s development has influenced city policies on energy requirements, green-space standards, storm-water management, and traffic planning: “This project is waking up the whole development and building sector. In communities around Stockholm a lot of people are interested in the results.”
Core city delivery systems—energy supply, transportation, buildings, water, solid waste, and others—blanket the entire city, encompassing many districts that may be quite different from each other. The many core systems in lab cities that are implementing a wide range of innovations tend to start with establishing a set of enabling conditions: The system’s governing body sets bold climate-related goals for the system. It ensures that the system’s managerial leadership is fully committed to these goals and has the skills to implement a change process sure to be long and complicated. These managers develop long-term strategies for developing and implementing innovations, detailed in multiyear and annual plans and budgets for actions and investments. They also muster customer and community support, while trying to safeguard the system’s performance and affordability.
Citywide long-range plans address the urban whole. They provide an overlay of concepts, principles, and rules that will guide growth and development of districts and systems as well as major facilities—the many pieces of the whole. This urban-planning practice is made more complex in lab cities, because they have to take into account the way that numerous high-impact climate innovations are already changing the city’s districts and systems. In 1980, when Portland adopted a comprehensive plan, climate change had not yet appeared on any community’s radar screen. By 2016, though, it couldn’t be missed. Even as Portland wrestled with other concerns that had emerged, it decreed the new planning goals of reducing carbon emissions and improving climate resilience.
Integration at these three scales is an essential step in a city’s transformation, and experimentation is yielding some actionable insights.
The point of integration isn’t just to address climate change; it’s to make the city better. The Royal Seaport, Salmhofer says, is attractive because of its location in the city, nearby natural amenities, and apartment size. In a 2016 survey of residents, she explains, “we had prepared possible answers for them in the survey, one of which was low carbon emissions. But that was just the respondents’ ninth or tenth ranked priority. The highest priorities were proximity to the national park, larger apartments, and still being within the city.” When it came to their living quarters, people wanted the benefits of immersion in nature, a sense of abundance, and easy access to the amenities of compact urban life.
Seattle Public Utilities has a carbon-neutrality goal, but its mission is to provide “efficient and forward-looking utility services that keep Seattle the best place to live.”12 Its 2014 strategic plan contained twenty measurable targets for service levels and performance, including customer satisfaction and holding rate increases to no more than 4.6 percent.13
Portland’s comprehensive plan seeks to create “a future place that is equitable, healthy, prosperous and well connected.”14 It emphasizes the city’s general well-being, while elevating climate action as a new and critical element in making the city a better place for its citizens.
Setting clear targets without specifying how they should be reached will stimulate a diversity of creative responses. The Royal Seaport set high initial targets for energy efficiency in buildings and keeps increasing them. The city decided that the district’s development would unfold in three stages, each bringing a new area into existence, and that performance targets would be raised for each stage. This was a way to drive developers and builders to innovate and perform better and better. “Most of the developers take lessons out of their experiences here,” Salmhofer explains. “They learn, for instance, how to build a passive house that doesn’t need energy, how to build green roofs. And they see that all these features are attractive to people.” So far developers are meeting the city’s standards, which were tougher than national standards.
In urban systems, stretch goals for decarbonization and climate resilience can be embedded in the system’s short- and long-range plans, as well as in managers’ performance expectations.
It’s a basic rule for making radical changes at any scale in the public or private sector: find and unleash skilled leaders, change agents who know when and how hard to push, and back them up when the going gets tough. Change managers have to break down the traditional silos in their systems. They have to establish cooperation and coordination within their systems and with other systems. “Systems change requires radical rethinking of the way cities do their work,” notes Johanna Partin, director of the Carbon Neutral Cities Alliance. “Otherwise, everyone is siloed into their little boxes running their programs or regulations. That won’t lead to systems change.” Champions also have to challenge or bypass old thinking. They have to try new things and resist succumbing to incrementalism, just tweaking things a bit. It takes time, not just skill, to pull all of this off.
In the Royal Seaport, says Salmhofer, her sustainability team helps coordinate experts from city departments to decide what requirements the Seaport will place on developers of its land: “City planning, environment, waste management, traffic, climate, urban development—we are all working together.”
Coordination among government systems is needed so investments form a coherent whole in a district, says Mami Hara. She points to the city’s Duwamish Valley area, which includes the Georgetown and South Park neighborhoods, each of which contends with a variety of climate- and pollution-related risks. South Park is a flood-prone area with a diverse, low-income residential community that is adjacent to an industrial site and has experienced significant health problems. “It became clear to community members and the city that a siloed approach wouldn’t work to address climate risks,” Hara says. The utility’s initial plans for coping with flooding and sewer backups include building storm-water conveyance, a pumping station, and a water-treatment plant at significant cost. Additional investments in protective structures to manage flood risks would probably also be needed. Other large investments by the city’s department of transportation and other public agencies are also called for—amounting to hundreds of millions of dollars in total planned spending for the valley.
Given the low-lying topography of the area, the high economic value of industrial activities there, the relatively low value of many of the industrial buildings, and the critical need for “antidisplacement” measures such as safe, affordable housing and a healthy environment for community members, the city established ways for its departments to collaborate with community members and business owners, as well as tribal entities, to develop a more holistic and long-term approach. They are refocusing, Hara says, on an integrative question: “Could we reinvest in a way that creates a more twenty-first- and twenty-second-century area, by looking differently at the resources, future conditions, climate drivers, and land elevations in key areas? This might change investments that are focused on maintaining current activities for a short while and don’t address the full range of community and business interests.”
In the Royal Seaport, the final product of integration—neighborhoods for residents and businesses—has to take into account what the real estate market wants. Developers have to believe they can make a profit, and potential buyers and renters have to believe they are getting their money’s worth. The success of Portland’s comprehensive plan also hinges in large part on how well it appeals to the interests of real estate developers and residents. “Ninety-five percent of the city will be built by the private sector,” explains Mark Raggett, a senior planner for the city. “We have to find the right balance between the city’s design and the development community.” It’s only in recent years, he says, that there has been significant demand for higher-density, compact neighborhoods.
Seattle Public Utilities, a provider of services, has to pay close attention to what it charges users, its key market. Holding down prices is built right into its strategic plan.
Portland’s comprehensive plan seeks to increase the density of the city, but it embraces variation in how this is achieved. “We’re establishing our intent: here is the way the city intends to grow—all in the service of its neighborhoods,” says Raggett. “Everywhere will see some growth and change, but everything does not end up looking the same. We’re being strategic about density.” The plan contains a half-dozen density scenarios for parts of the city, based on local conditions and the historic roles of areas. There is the large central city; several town centers anchored by a range of commercial and public services, with housing options and parks or public squares; and many smaller neighborhood centers that are hubs for local activities and gathering: “We’re acknowledging that some of these areas are physically different and their residents may not value neighborhood assets in the same way. Some of the areas don’t want to look like the inner city.”
In June 2016, 77 percent of voters in San Francisco—186,000 people—joined with voters in eight surrounding counties to approve $500 million in new taxes to restore twenty thousand acres of wetlands of the San Francisco Bay and defend against rising sea levels. The scientific analysis and case for restoration had been made years earlier in a well-publicized process. The campaign to approve Measure AA, a $12 annual tax on land parcels in the region for twenty years, tapped into the community’s passionate love of the Bay and its understanding of climate change.
It’s remarkable any time such a large majority of voters agrees to increase their taxes for any reason, but we highlight this development for a different purpose. It offers a version of the changing urban operating system that is emerging in cities worldwide to enable and sustain the innovations and radical transformations that respond to the climate imperative. This climate-ready operating system has three basic elements: new governance models, technical capacities, and financial resources.
Innovation lab cities tend to develop the models and capacities they need on the fly and just temporarily, and they try to work around limitations on their governance authority over critical factors like regulation of buildings or investment in transportation infrastructure. But patching things together that way won’t work over the long and complex run. What’s needed is the development of a next-generation urban operating system that fills gaps in cities’ abilities to handle climate change. Like San Francisco, some climate innovation lab cities are already moving into this unmapped terrain.
San Francisco’s Measure AA characterizes a regional-collaboration approach—a temporary, focused alliance in which the city and eight county governments, several regional environmental and development authorities, and key nonprofit organizations in the Bay area aligned to design a ballot proposal and then organize a successful campaign that drew more than 1.1 million votes and established critical funding for two decades.15
Regional alliances of this sort are particularly important in urban areas that have numerous local government jurisdictions. They bypass the more difficult task of restructuring governance into a single regional government, a model that has never been widely accepted in the US. Some cities—Toronto, Milan, and several cities in the United Kingdom—have recently moved toward a form of metropolitan-area government.
Other governance shifts are under way due to climate change. In Germany, the national government has been “remunicipalizing” the energy-supply sector, returning control to major cities’ governments, partly to avoid national policy barriers to sufficient investment in decarbonization. “Decentralized and locally owned energy systems have played a positive role in facilitating the growth of renewable energy in Germany,” reports Andrew Cumbers in Can a City Be Sustainable?16 In China, dozens of cities have received authorization from the national government to serve as pilot sites for innovations in use of green infrastructure, development of carbon-emissions markets, and other efforts to reduce energy consumption and GHG emissions.
What’s apparent, then, is a scattering of power-sharing and power-shifting changes on the vertical axis of government levels—local up to national—and the horizontal axis of government jurisdictions within an area. (Note the counterexample of state governments in the US, some of which have prohibited certain actions by cities, such as the banning of plastic bags.) These efforts, Benjamin Barber points out, help cities align their authority with the things they now need to do, such as taking climate action. At the same time, he adds, because economic and political power have migrated to the global level, “cities must act together”—beyond just their local areas—“in order to assure the efficacy of what they try to do alone.”17 Cooperation produces influence.
Various analysts contend that these trends will increase because cities are where problems like climate change mostly must be addressed and where people expect their leaders to deal with daily life concerns. Barber tells the story of when President Bill Clinton did a radio talk show in China with the mayor of Shanghai: “Two-thirds of the incoming calls were for the mayor. Reporters were surprised, but the former president, no stranger to local politics in Arkansas, got it: ‘People were more interested in talking to the mayor about potholes and traffic jams,’ he recalled.”18
The pattern seems to be that cities get more control or influence when other governments, horizontally or vertically, realize that they cannot solve a problem that they must solve for their own benefit. As climate disruptions increase, so will this driver of governance reinvention. The form that new governance arrangements take will likely be designed case by case rather than with a widely used model, because existing governance models vary so much worldwide.
San Francisco, New York City, Boston, and other cities have established scientific advisory boards to help them understand and monitor what is happening in climate change and how it might impact the city. But this is just one of the new technical capacities, readily available expertise, that cities find they now need to be able to analyze, plan, design, and manage climate innovations in core urban systems. Most cities have little previous experience in understanding their energy-supply systems, much less figuring out how to reinvent them. Few cities knew much about designing bicycle networks that would appeal to potential riders. No city knew anything about setting up a charging infrastructure for electric vehicles.
To develop these capacities, city governments have hired, purchased, and partnered. Some have built up staffing in areas that appear to require long-term involvement, such as coastal management. A typical practice is to purchase consulting services, which can bring a city useful analytic tools and processes as well as experience from other cities. Some cities have been able to use funds from philanthropies to pay for short-term employees or consultants. Their employees attend conferences to get state-of-the-art know-how and attend training to become certified in new practices. They participate in city-to-city exchanges, using organizations like C40, 100 Resilient Cities, and the Urban Sustainability Directors Network, to find out what peers are doing and learning. They call on the private sector to join task forces and study groups, lend their expertise, and shape recommendations for action. They partner with nonprofit organizations and universities that have developed relevant specialized knowledge and may have designed tools for others to use. And they tap into the “indigenous knowledge” of community members, who bring lived experience and understanding to the table.
As individual cities scramble to get what they need, the growing demand for technical competence suggests that a new, organized, and sustained capacity to serve cities is needed in the climate-change era. Urban planning emerged as a widespread and organized practice in the twentieth century, not just something cities did every now and then. The design and management of decarbonized and resilient urban systems is an enormous technical challenge that will last for many decades. The response to this need so far has been rapid and significant but also makeshift and fragmented among many participants. While this may have been all that was possible to do in the short run, it does not yet involve the sort of intentional design and investment that could build a globally distributed, multidisciplinary, collaborative technical capacity that cities can use.
Innovative cities need risk capital to support the early stages of climate-innovation development that city budgets can’t be asked to fund because taxpayers and elected officials have a low tolerance for the failure inherent in experimentation. That was the collective message of the mayors of Oslo, Rio de Janeiro, Sydney, and Vancouver during a workshop at C40’s December 2016 summit in Mexico City. These cities belong to the CNCA, which has invested nearly $2.5 million, provided by philanthropies, in two-dozen innovation projects developed by its twenty member-cities. “Even cities that have money for innovation have to justify what they spend it on,” says CNCA’s Partin. “Working with other CNCA cities lets them say that they have checked with other cities in the world that are intensely focused on becoming carbon neutral.”
Risk capital for innovation is just one of the climate-driven capital challenges faced by cities during the next few decades. Even in small cities, decarbonizing urban energy, transportation, building, and waste systems may require billions of dollars for new equipment, infrastructure, and other hard assets, as well as more funds for operations. In 2016, C40 estimated that its city members had to spend $375 billion by 2020 and about $800 billion more between 2020 and 2050 to achieve carbon-reduction goals.19 Strengthening just the physical resilience of cities globally may require trillions of dollars.
Where will all this money come from? How much will be paid by governments, businesses, or property owners and other residents? How much of government’s portion will be paid by local taxpayers, how much by users of water, transportation, and other public services, and how much by other levels of government? How much can cities borrow to cover large front-end costs of projects; how much will they have to pay as they go? Are there new sources of revenue that cities can tap to pay for investments and borrowing? What will cities do about the potential of investments in new infrastructure to generate financial and quality-of-life benefits for some residents in project areas while threatening to displace or disadvantage other residents? What can cities seeking private investment do to reduce the financial risks or increase the potential financial returns of private investors? How can cities persuade voters or customers of municipal services to accept increased costs?
Given the challenge of finding more money, cities are adopting policies requiring that future infrastructure projects that must happen—maintenance and upgrade of roads, streets, and water systems, for example—incorporate planning for climate adaptation. San Francisco, for instance, requires that future capital projects include plans for adapting to sea-level rise.
At the same time, innovations are emerging from a wide range of private investment entities and corporations; local, state, and national governments; development agencies like the World Bank; and philanthropies and wealthy individuals. For instance, carbon-trading markets run by nations or states already produce billions of dollars of revenue that can be invested in climate actions, and some cities are studying how to extend these markets to include auto emissions and carbon sequestration in soil. Washington, DC, issued a unique outcome-based green bond that provides investors with a lower rate of return if the green storm-water infrastructure that is installed does not perform as expected. The city also launched a green bank to use small amounts of public capital to leverage private funding for solar energy, energy efficiency, and other local projects.20 Copenhagen, New York City, and other cities have worked with engineering consulting firms to develop a credible methodology for calculating the social return on investment, the “business case,” for local-government spending on green infrastructure. An initiative by Energy Efficiency for All, a local-state-national coalition of more than fifty environmental, affordable housing, and other advocacy nonprofits in the US, has generated more than $315 million in funding from energy utilities for retrofitting low-income multifamily housing.
These innovations are mostly promising pilots, and it’s hard to discern patterns at this point that might unleash huge amounts of climate-focused capital. The inventions tend to focus on specific financial products, such as bonds or insurance. But that doesn’t address what may be needed in the long run: an organized, “one-stop,” permanent capacity that cities can use to assess their climate risks and opportunities; develop fundable projects, including at regional scale; design projects to achieve equitable outcomes; develop new revenue streams to pay for projects; effectively access various types of capital; and meet other critical needs.
Even as the world’s most climate-smart cities succeed in applying transformational ideas—refining innovations, producing new ones, integrating innovations, and developing governance, technical, and financial capacities that support innovation for the long haul—they face a number of persistent questions about what they are doing and achieving, matters for which prevailing practices have not yet emerged.
In most if not every city, historic patterns of discrimination against races, ethnicities, religions, and economic classes have guided the distribution of benefits and costs and shaped socioeconomic disparities among groups of people and places in the city, including exposure to pollution; access to green space, public transportation, and services; and vulnerability to flooding and other extreme weather events. Will these patterns continue, or will they change? How far will cities go to acknowledge and address the social and economic harm that some residents have experienced? Will cities, in which the cost of living seems sure to rise in order to strengthen climate resilience, displace low-income populations and become havens solely for the affluent? Will they seek the “just distribution of the fruits of the earth” that Pope Francis called for?
Copenhagen Lord Mayor Frank Jensen insists that his city should be “a city for all.” Cape Town is explicit about using innovations like transit-oriented development to repair the damage caused by years of apartheid. Shanghai contains thousands of rural migrants working in factories and living in dormitories or cheap shantytowns—part of a national economic pattern of low-wage urban employment. New York City Mayor Bill de Blasio linked his initiative for increasing energy efficiency in buildings with an agenda to increase the number of affordable housing units in the city. In most American lab cities, elected officials and community-based organizations advocate for “equity” in city decision-making processes and actions so the voices and interests of historically marginalized groups will be empowered.
As innovative cities show how much they can do to reduce emissions within their borders, will they also develop broader efforts to cut emissions discharged elsewhere to make products and services used by people in cities—cars, food, and air travel, for example? A few cities are assessing their “consumption-based” emissions, but most cities focus only on locally released emissions. This understates the urban contribution to global warming and, perhaps, minimizes the creativity and influence cities may bring to the challenge.
As innovative cities strengthen their economies and climate resilience, will they develop into an exclusive global network of wealthy, productive, and resilient urban areas at the expense of other cities and rural and agricultural areas? Will “the rich getting richer” be the favored pattern, or is a more widely shared urban-rural prosperity in the cards?
So many tough questions for cities to answer, so much more innovating to do to extend, spread, and deepen changes. Driven by climate change, the world’s cities have entered a time of continuous urban reinvention that will certainly last through the twenty-first century. The framework of ideas that is replacing the modern city framework is still coming together.