How can cities become big and successful, not just big? Urban world The global population is shifting to cities 1 Cities will become more powerful than nations 2 Megacities merging to form global city regions whose populations dwarf many countries 2 1 2 Massive urbanization creates many challenges 1. Existing cities will have to expand and new cities will have to form … 2. Cities are at different levels of maturity and require different approaches 3. Cities are vulnerable 4. Cities are resource-intensive … requiring infrastructure spend … 4 Number of global cities 1970-2020 3 The upside of urbanization is innovation The upside is cities taking a lead in solving their own problems © 2016 EYGM Limited. All Rights Reserved. EYG no. 01137-163GBL. ED None inhabitants every week for next 40 years 1m and US$60t to US$70t US$15t to US$25t Shortfall Potential ways to address shortfall Needed Greater private sector involvement Increase long-term financing options Bending the cost curve Innovative infrastructures 5 Build from scratch or embed latest technologies and thinking To create smart, competitive, eco-friendly cities Overdevelopment Data: Current urban housing plans in China geared to accommodate 3.4 billion people – 2015 population is only 1.4 billion and expected to slow. Model Examples Biggest upside Biggest threat Developing infrastructures 7 Invest nationally in infrastructure to help drive economic growth To become more competitive and attract foreign investment Congestion, pollution and slums Data: Over 30% of city dwellers in 2050 will live in slums Existing infrastructures 6 Invest in and develop infrastructure around existing constraints To stay competitive as legacy trade, commerce and cultural hubs Aging infrastructure and sustained underinvestment Data: EY survey: 82% of public and private sector respondents said public’s willingness or ability to pay for infrastructure will have a dramatic or significant impact on future of urban RE and infrastructure • Masdar City, UAE • Shenzhen, China • Singapore • Hong Kong • London, UK • New York, US • Sydney, Australia • Tokyo, Japan • Rio de Janeiro, Brazil • Mumbai, India • Lagos, Nigeria • Jakarta, Indonesia of global cities are dealing with climate change effects. 8 70% of projected GDP is at risk from manmade and natural disasters in 301 cities around the world. 9 US$4.6 trillion of urban areas are coastal and face danger from rising sea levels. 8 90% Cities generate 70% of global CO 2 emissions. CO 2 Cities consume 2/3 of the world’s energy. 4 5 6 The upside of urbanization is greater private sector participation 7 Compact strategies US$3t in capital investment in urban infrastructure can be saved in the next 15 years by pursuing more compact strategies. 10 in Asia and Africa 90% Optimization Optimizing vehicle flows can achieve carbon and energy savings of 10% to 15%. 11 Cap and trade Tokyo’s cap-and-trade program has achieved 25% reduction in greenhouse gas (GHG) emissions of covered facilities after its 5th year. 12 Driverless Autonomous electric cab in 2030 could emit up to 94% fewer emissions per mile than a conventional gasoline car. 13 Resiliency Bristol (UK), New Orleans (US), Medellin (Colombia), and Melbourne (Australia) are among the cities that have appointed a Chief Resiliency Officer. 14 Net zero energy — where the renewable energy generated by a building in a given year equals the total energy the building uses — has become a goal for many buildings around the world. Net zero energy The C40, a network of global mega-cities, is acting locally and collaboratively to reduce GhG emissions. C40 The upside is cities become "smarter" ... the promise of 10 billion things Number of smart city IoT units Smart cities market size 2014 Smart cities market size 2020 CAGR 1B 10B 9x Cities will become “smarter” when they leverage data from ICT systems, sensors, devices and other connected assets to improve decision-making across multiple urban challenges related to the physical and social infrastructure. 15 US$300b– US$500b 14 – 20+% US$700b– $US1500b Cities debated whether they need their own foreign policies at the 2105 Chicago Forum on Global Cities. The first Global Parliament of Mayors will meet in the Hague in September 2016. Many governments face fiscal pressure … … making it difficult to fund infrastructure and other city projects 2008 2015 79.9 111.2 OECD countries Government debt-to-GDP 16 Private sector participation is essential… Some benefits of infrastructure PPPs Private sector financing Greater budgetary certainty Long-term value-for-money through appropriate risk transfer to the private sector over the life of projects Private sector innovation and technology Shenzhen Guangzhou Hong Kong 120M Hong Kong-Shenzhen-Guangzhou 185 countries are smaller 173 countries are smaller 160 countries are smaller Tokyo Kyoto Kobe Osaka 60M Tokyo-Osaka-Kyoto-Kobe Sao Paulo Rio de Janeiro 40M Sao Paulo-Rio de Janeiro 2014–2030 $ of global GDP 48% 2015 S o c i a l i n f r a s t r u c t ur e Administration and governance ICT Equipment Communications Education Health care Connected services to inhabitants Security Innovation and economic development Physical infrastructure Built environment Buildings Public spaces Power and utilities Energy Water Waste Transport Ticketing Mobility Smart city infrastructure or 1. World Urbanization Prospects, United Nations, 2014, http://esa.un.org/unpd/wup/Publications/Files/WUP2014-Report.pdf. 2. State of the World’s Cities 2010/2011, UN Habitat, 2010, http://unhabitat.org/books/state-of-the-worlds-cities-20102011-cities-for-all-bridging-the-urban-divide/. 3. World Urbanization Prospects, United Nations, 2014, http://esa.un.org/unpd/wup/Publications/Files/WUP2014-Report.pdf. 4. B20 Infrastructure & Investment Taskforce Policy Summary, B20 Australia, July 2014, http://www.b20australia.info/Documents/B20%20Infrastructure%20and%20Investment%20Taskforce%20Report.pdf. 5. “China is Still Building Ghost Cities,” The Diplomat, 19 October 2015; http://thediplomat.com/2015/10/china-is-still-building-ghost-cities/. 6. Infrastructure 2014: Shaping the Competitive City, EY and Urban Land Institute, 2014; http://www.ey.com/Publication/vwLUAssets/EY_-_Infrastructure_2014:_shaping_the_competitive_city/$FILE/EY-infrastructure-2014-shaping-the-competitive-city.pdf. 7. Sustainable Development Challenges: World Economic and Social Survey 2013, United Nations, 2013; http://www.un.org/en/development/desa/policy/wess/wess_current/wess2013/WESS2013.pdf. 8. Why Cities: Ending Climate Change Begins in the City, C40 Cities, 2016, http://www.c40.org/ending-climate-change-begins-in-the-city. 9. Lloyd’s City Risk Index 2015–2025, Lloyd’s, 2015, http://www.lloyds.com/cityriskindex/. 10. Cities for People: Insights from the Data, Energy Innovation, April 2015, http://energyinnovation.org/wp-content/uploads/2015/05/C4P-Insights-from-the-Data.pdf. 11. The Route To Carbon And Energy Savings: Transit Efficiency In 2030 And 2050 — Final Report, Center for Neighborhood Technology, Chicago, November 2010; https://www.transit.dot.gov/regulations-and-guidance/environmental-programs/route-carbon-and-energy-savings-transit-efficiency. 12. “Tokyo Cap-and-Trade program slashed GHG emissions by 25% after 5th year,” ICLEI, 3 January 2016, http://www.iclei.org/details/article/tokyo-cap-and-trade-program-slashed-ghg-emissions-by-25-in-five-years.html. 13. “Electric 'robocabs' would reduce US greenhouse emissions by 94% — study,” The Guardian, 6 July 2015; http://www.theguardian.com/environment/2015/jul/06/electric-robocabs-reduce-us-greenhouse-emissions-94-percent-study. 14. “2nd Annual Chief Resilience Officer Summit Begins November 9 in Mexico City,” 100 Resilient Cities, 6 November 2015; http://www.100resilientcities.org/blog/entry/2nd-annual-chief-resilience-officer-summit-begins-november-9-in-mexico-city#/-_/. 15. “Gartner Says Smart Cities Will Use 1.1 Billion Connected Things in 2015,” Press Release, 18 March 2015; http://www.gartner.com/newsroom/id/3008917. 16. “Percentage of Public Debt in GDP Around the World,” Global Finance, 6 May 2016; https://www.gfmag.com/global-data/economic-data/public-debt-percentage-gdp?page=2. 67% 33% 2.5 billion urban dwellers added 50% 50% 33% 67% 1950 2008 2050 of global population 19% 300 largest cities 1970 Megacities 3 1970 2014 2030 02 23 41 Mid-sized cities 1970 2014 2030 294 417 558 Large cities 1970 2014 2030 21 43 63