Sustainable Cities and the Wealth of Nations

Vancouver, Canada (GLOBE-Net) - The year 2007 marked a turning point in human history. For the first time more than half of the world’s population live in cities and towns. By 2030 that figure will rise to two-thirds. Unfortunately the fastest growing cities are in the developing world, and the fastest growing neighbourhoods are slums. As EU Commissioner Margot Wallström, noted recently the main challenges facing humanity such as public health, economic development, poverty, energy, resource depletion, and environmental quality are urban-based. And these challenges will continue to grow as the world’s cities grow. It is becoming painfully evident that urbanization is not just a challenge for cities, but a challenge for humanity and for the environment as a whole. How we respond to the environmental challenges of urbanization will in large measure determine not only the health, quality of life and economic opportunities of upcoming generations, but also the course of human development overall.

The important role cities play in defining the Wealth of Nations is not a new concept. In his 1776 classic An Inquiry into the Nature and Causes of the Wealth of Nations, long considered the foundation of modern economics, Adam Smith put forward a series of observations on how ‘towns’ contribute to the improvement of nations.

He argued city-based commerce:

  • Provides a ready market for the produce of the countryside, thereby encouraging the cultivation and improvement of land;
  • Generates wealth so city merchants - ambitious to become country gentlemen – can acquire and improve uncultivated land for the betterment of the nation; and
  • Promotes order, good government and the liberty of individuals.

Smith’s views were based on the economic principle that consumption is the sole end of all production, and that economic progress depends on the pursuit of self-interest, the division of labour, and freedom of trade. One might argue it was that kind of thinking that has brought us to where we are today: rapidly expanding urbanization; over-exploitation of the natural environment; and climate changes that are disrupting weather-related economic activities of nations everywhere.

Sustainability was not a concept that figured largely in Adam Smith’s view of cities as the source of National Wealth. A similar affirmation of the role cities play in shaping the Wealth of Nations was made by Canadian urbanist, writer and activist Jane Jacobs two hundred years after Adam Smith’s declarations. She challenged one of the fundamental assumptions of classical economics that nation-states are the main player in macroeconomics by asserting that cities are the key players in global well being.

Like Adam Smith, she believed cities are at the root of all economic growth (agricultural, manufacturing, technology, information, etc). However, she was one of the first to speak of cities as living entities and documented how cities work, how they grow, and how they die.

Best known for The Death and Life of Great American Cities (1961), a powerful critique of the urban renewal policies of the 1950s which, she claimed, destroyed communities and created isolated, unnatural urban spaces, Jacobs advocated dense, mixed-use neighborhoods. Jacobs was closer to utilizing the processes of living nature as models for flexible and equitable economic planning for cities. Her ideas influenced a generation of urban planners, many of whom have gone on to design programs to create more ‘sustainable’ cities.

One of her most important insights, enunciated in The Economy of Cities, is the way the new grows out of old: not by plan, as too many social engineers have assumed, and not by ever-finer division of labour, as Adam Smith asserted, but by serendipity. Jacobs believed chance and entrepreneurship will produce economic and social progress – the new growing from the old and where businesses make money by meeting consumers’ needs.

Interestingly sustainability planners have little tolerance for that kind of fluid, messy, uncontrolled, spontaneous growth. But that is exactly we saw demonstrated at the Third Session of the World Urban Forum held last year in Vancouver – that in many of the slum-infested cities of the world economic and social progress comes from individuals and small enterprises making incremental changes, with a healthy dose of trial and error.

Roughly four billion people, mostly in developing countries, subsist at the bottom of the economic and social pyramid, where they are vulnerable not only to the risks associated with poverty, unemployment and social exclusion, but also to a host of environmental threats including poor air quality, contaminated water and climate change. New concepts of economics – far removed from the precepts of Adam Smith - argue that linking the entrepreneurial talent that is so evident in people at the bottom of the pyramid with the need to overcome the deplorable environmental conditions in which they live could help overcome urban poverty, and create more sustainable cities.

It’s just as Commissioner Wallström noted.

Cities are where the environmental impacts of human society are concentrated, and therefore are the places that offer the greatest opportunities for positive change to create more sustainable societies. And because cities offer the strongest potential for ‘on the ground’ deployment of environmental technologies and services, around the world we are seeing examples of new policies and programs for transportation, energy, solid waste and water treatment, that are sensitive to how urban areas interact with the natural environment.

Because they control many of the basic services in our society – water, solid waste, land use, cities have an opportunity to promote environmental and economic sustainability in many areas:

  • By setting building codes or establishing requirements for green building, cities can reduce energy consumption and greenhouse gas emissions while promoting the use of new building techniques and technologies.

  • Municipalities can choose solid waste strategies which encourage waste diversion and recycling, and can also select technologies such as landfill gas capture or gasification to turn waste into energy.

  • By expanding public transit, and planning communities which encourage bicycling and walking over car dependency, cities can reduce greenhouse gas emissions and air pollution while creating healthy, livable neighbourhoods.

  • Cities can support demonstration projects of new technologies for energy production, water treatment, green buildings, public transport, or other environmental products.

Leadership from below!

Perhaps not surprisingly we are seeing around the world that progressive actions on climate change and other pressing environmental issues are becoming increasingly common at the municipal level. In one recent initiative, 300 city leaders signed the US Mayors Climate Protection Agreement, pledging to reduce GHG emissions to 7 percent below 1990 levels. This is but one of many examples where City Leaders are showing the way that national governments must eventually follow – Sustainability begins at home!

There are many living examples of how cities have re-invented themselves to become more sustainable. Earlier this year, the City of Toronto (Jane Jacobs’ home town for decades), committed to cut greenhouse gas (GHG) emissions from the urban area to six percent below 1990 levels by 2012, 30 percent below 1990 levels by 2020, and 80 percent below before 2050.

Toronto has also embarked on initiatives to promote energy efficiency retrofits in buildings through technical assistance, funding for new construction projects and by the extension of loans to public sector buildings. In cooperation with other levels of government, Toronto is rebuilding its once heavily industrialized waterfront areas to create several more sustainable, eco-friendly communities.

The City of Vancouver has used concepts of sustainability as key planning tenets for several years and has long been recognized as one of the world’s most liveable cities. Partly due to decisions taken years earlier to avoid city-destroying freeways, the City of Vancouver has pursued policies and programs that:

  • Foster the growth of self-contained neighbourhoods;
  • Encourage more people to live in the downtown core, which has revitalized parts of the inner city and avoided empty and dangerous downtown streets at night;
  • Require Quality of Life measures be factored into all municipal decision making for development; and
  • Promote greater densification.

A key feature of the City of Vancouver’s success with respect to sustainability is exemplified in measures taken to preserve the diversity and increase the density of the downtown core. By creating a place where people can work and live, where parks, shopping centers, office towers and apartment buildings co-exist, Vancouver has reduced the need for transport and made water, power and waste management more efficient.

The ‘concrete jungles’ found in many cities – legacies of past mistakes in urban design - have saddled many cities with acres of contaminated land; inadequate waste management facilities; inefficient water/wastewater systems; and highly segregated and unequal distribution of opportunities for economic growth. Such cities experience an overall decline in quality of life marked by decreased income, lack of cultural vibrancy, and increased risks of environment related health concerns. But it is possible to turn such situations around. Chicago is an excellent example in this regard of what can happen from the integration of municipal governance under the framework of sustainability. An industrial city once marked by freeways and endless concrete, under the leadership of Mayor Richard Daley, Chicago has become a leader in urban sustainability and is ranked as one of the ‘greenest’ cities in the United States.

There are many other examples – large and small – where ecological principles are being woven into municipal decision making and where cities are becoming more sustainable and more liveable. What is driving the urban planning agenda in these situations is the need to provide a better quality of life for everyone in our society!

As was noted in an earlier GLOBE-Net article, the challenge facing cities in the coming century will be enormous. Cities are living entities and as such require vast amounts of water, energy and supporting agriculture and natural resources – just as Adam Smith postulated. However, the focus of city building is quite unlike that postulated by Smith. Densification, green building, sustainable urban design and community diversity will be the tools needed to ensure that cities become or remain sustainable. This is critically important, b infrastructure decisions being made today will have impacts lasting for up to 50 or 100 years in the future.

How we respond to the environmental challenges of urbanization will in large measure determine not only the health, quality of life and economic opportunities of upcoming generations, but also the course of human development overall. Sustainable cities may ultimately be the key to preserving civilization as we know it and could become the yardstick by which we truly measure the Wealth of Nations!

You can return to the main Market News page, or press the Back button on your browser.