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There’s a growing chorus of voices looking to get us back on track with tackling climate change – but this chorus is led by a host of unusual suspects. Around the world, businesses and major corporations – supported by the likes of the World Economic Forum and the UN – are taking the lead on reducing greenhouse gas emissions, deemed to be a major business risk to their current operations.
Environmental risks such as climate change come with a price tag. The Natural Capital Coalition estimates the annual cost to the global economy of carbon emissions, pollution, and other damages caused by industry at $7.3 trillion (£4.5tn). This risk is only set to heighten – and it is risk that is focusing minds. It’s significant that Thomas Steyer, Michael Bloomberg and Henry Paulson Jr have decided to call their new study on the economic cost of climate change in the US, Risky Business.
Part of the reason for this latest push is the sheer pace of global change. There were one billion members of the global middle class at the turn of the millennium. That is, one billion people who spend between $10 and $100 a day. By 2013, that number had doubled. It will reach five billion by 2030.
Can our planet deliver on the expectations and consumption habits of this new group? Urbanisation intensifies the challenge: today more than half the world’s population live in cities, but projections for the future are startling. A further two billion will move to urban areas in the next two decades. That will include remarkable growth in China where, according to McKinsey, the urban population will hit the one billion mark by 2030. And the explosion won’t be confined to the Asia Pacific: there will be an additional 1.3 billion city dwellers in Africa by 2050 for example.
Hubs of political, economic and cultural power, cities are magnets for the growing affluent and, of course, their consumption habits. Against this backdrop, the consensus seems to be that cities are a part of the problem. It’s true they are at the frontline of climate change: they already account for 80% of global greenhouse gases, and 66% of the world’s energy.
But urbanisation and its connection with climate change isn’t just about risk. They’re undeniably a part of the solution – and there lies opportunity.
Mature cities in the developed world can adapt. New cities can design themselves to be climate resilient from the start. The first route entails unavoidable expenditure, but both also involve potentially lucrative benefits for innovative businesses providing solutions. And the prize is a big one: there’s a $340bn global market in urban innovation up for grabs by 2030, a market that is just starting to open up.
Many cities are waking up to the need to work differently. A healthy new language around “adaptation” is emerging. Reports from the Intergovernmental Panel on Climate Change, an independent body of scientists from around the world, depict a transition towards making our cities resilient to future shocks and strains.
Given our future wellbeing and prosperity hangs on how cities develop, more cities – and businesses looking to deal with them – need to adopt this new mindset. Traditionally, urban development has paid little notice to global issues. Planners paid far more attention to local impacts. But now we’re living in a globalised world. Global issues are local, and vice versa. Competing in a global market, cities need to balance building a thriving economy with reducing environmental impact.
Managing this kind of complexity requires a “city systems” approach. That means city planners, businesses and city thinkers working together, seeing each city as one constellation of systems and collaborating to manage them for greatest positive impact.
They’re not on their own. Informing this new approach is an emerging ‘science of cities’ that helps collaborators to understand how cities work on a granular level, getting to grips with the challenges involved and how best to tackle them.
The UK is leading in this space, fast becoming a hub combining the greatest global thinking and partnerships on urban innovation. A recent report from Future Cities Catapult reveals a thriving, world-leading cluster of city-making expertise estimated to be worth £16bn and employing hundreds of thousands of professionals.
For a small nation, that’s an incredible concentration of expertise. Not just businesses, but world-class research instituitons, city authorities and civic initiatives all contributing to a rich and lucrative ecosystem.
This group is already moving ahead with the kind of joined-up thinking required to turn risk into opportunity and advantage. They have made the UK the go-to place for ambitious businesses and cities looking to exploit the latest urban thinking.
Big and inescapable changes are afoot – we all know that – and cities are at the heart of how we respond to them. That means cities have to plan now, and act, both to remain competitive and build resilience. Businesses, too, if they want to shape, take part and profit from a flourishing market.
And there’s the point. Where there is risk, there is opportunity. A whole new cities ecosystem needs to emerge with a proactive mindset and a willingness to embrace working together. The prize is significant: better lives, better business – and a better planet.
Sir David King is the foreign secretary’s special representative for climate change and chair of the Future Cities Catapult
