Michael Bloomberg :
(From previous issue)
In fact, climate change may be the first global problem where success will depend on how municipal services such as energy, water, and transportation are delivered to citizens. Cities have only just begun to seize the opportunities they have to make changes that can produce both local and global benefits. The amount of infrastructure that will be built by midcentury is about four times as much as the total available today.
Modernizing infrastructure networks is costly, but it need not be cost prohibitive. City governments are increasingly turning to private investors to help finance such projects, and it is a natural partnership. After all, most businesses are in cities, and most cities are on coastal waters. Both mayors and CEOs have an incentive to mitigate the worst effects of climate change. The incremental costs of making infrastructure low carbon and resilient are modest relative to the economic benefits, as more countries and companies are recognizing.
Companies are becoming more eager to provide capital for infrastructure projects for a share of the resulting revenue. Public-private partnerships make this possible, and they are helping finance major projects around the world, from the construction of a new tunnel in Miami that allows port traffic to bypass downtown streets to the construction of virtually a new city by the municipal government in Shantou, China.
In other cases, companies are asking only that governments clear away the regulatory hurdles that block them from investing and profiting. In the United States, for instance, a number of states, including Florida, have laws that prevent solar power companies from leasing solar panels to homeowners, even though that model has proved successful in California and elsewhere. Many other states, such as New Hampshire, prevent their utilities from entering the market for distributed renewable energy. These artificial market barriers hurt consumers and hinder climate change efforts, and cities can help lead the way in pushing for their removal.
Just like companies, city governments can also face barriers that prevent sustainable investments. To borrow money in the capital markets, for instance, cities need a credit rating; outside the United States and Europe, however, many lack them. The World Bank estimates that only four percent of the developing world’s 500 largest cities have internationally recognized credit ratings, and only 20 percent have a domestic rating. Yet these cities have about $700 billion in annual demand for infrastructure projects in transportation, energy, waste treatment, and water supply. Providing them with access to credit could become one of the most effective ways to fight climate change, drive economic growth, and improve public health.
Fixing the problem should be relatively easy. In Peru, for instance, the World Bank helped the city of Lima secure a credit rating so that it could raise $130 million to upgrade its bus rapid transit system. The new bus system will dramatically cut carbon pollution, and it will help reduce traffic congestion, saving companies money and improving productivity. The project represents yet another example of the natural alignment of economic, environmental, and health goals.
Countries can also empower their cities to achieve such goals by freeing them to regulate their own power supplies. Mayors in some cities, including Chicago, Seattle, Helsinki, and Toronto, enjoy various forms of leverage over their energy supplies. Some own their own power, others own the distribution system, and still others have the authority to sign contracts with any independent power generator they select. The Chinese government has given major cities, such as Shenzhen, expanded powers to swap out coal for cleaner forms of energy. In Denmark, the national government decided to grant independent regulatory powers to Copenhagen. The city is now on the path to full carbon neutrality, aiming to reach zero net emissions within a decade.
Central governments are not quick to devolve power, but they are doing so with greater frequency as they recognize the national benefits that can come with local control. That trend will only accelerate as the world becomes increasingly urbanized and cities become increasingly connected to one another, promoting the spread of best practices across national borders.
It will be no small challenge for nations to accommodate the swell of urban dwellers. In most cases, urban populations are expanding atop antiquated infrastructure or no infrastructure at all. Yet advances in technology are making transformational advances in infrastructure possible, and that will allow cities in the developing world to catch up to-and even leapfrog-established cities in constructing modern metropolises.
Climate change may be the first global problem where success will depend on how municipal services such as energy, water, and transportation are delivered to citizens.
There is no better example of this than solar energy, which can save governments the expense of building costly new energy transmission networks. The traditional model of a centralized energy plant feeding power to a region entails enormous costs. Solar-powered microgrids and other distributed renewable energy can deliver energy far more efficiently.
Nations and cities that fail to prepare for the urban population explosion risk creating, or worsening, slum conditions that frighten investors, perpetuate a permanent underclass, and impede national progress. The best way to prepare is not by implementing top-down, one-size-fits-all centralized programs but by empowering cities themselves to solve problems, invest in their futures, and harness the potential of their residents.
The challenge facing the Metropolitan Generation-to build modern cities for a new urban civilization-is as monumental as it is essential. Success will spread prosperity globally, and innovation in cities will help break down the differences between the developed and the developing world. City leaders must be strong enough to welcome-and treat as equals, not second-class citizens-all those who come seeking opportunity and farsighted enough to invest in infrastructure that generates maximum economic, environmental, and health benefits.
The city cannot replace the nation-state in pursuing climate solutions or policies to reduce poverty, improve security, fight disease, and expand trade. City leaders seek not to displace their national counterparts but rather to be full partners in their work-an arrangement that national leaders increasingly view as not just beneficial but also necessary.
(Concluded)
(MICHAEL BLOOMBERG is Founder and CEO of Bloomberg LP. From 2002 to 2013, he was Mayor of New York City).
(From previous issue)
In fact, climate change may be the first global problem where success will depend on how municipal services such as energy, water, and transportation are delivered to citizens. Cities have only just begun to seize the opportunities they have to make changes that can produce both local and global benefits. The amount of infrastructure that will be built by midcentury is about four times as much as the total available today.
Modernizing infrastructure networks is costly, but it need not be cost prohibitive. City governments are increasingly turning to private investors to help finance such projects, and it is a natural partnership. After all, most businesses are in cities, and most cities are on coastal waters. Both mayors and CEOs have an incentive to mitigate the worst effects of climate change. The incremental costs of making infrastructure low carbon and resilient are modest relative to the economic benefits, as more countries and companies are recognizing.
Companies are becoming more eager to provide capital for infrastructure projects for a share of the resulting revenue. Public-private partnerships make this possible, and they are helping finance major projects around the world, from the construction of a new tunnel in Miami that allows port traffic to bypass downtown streets to the construction of virtually a new city by the municipal government in Shantou, China.
In other cases, companies are asking only that governments clear away the regulatory hurdles that block them from investing and profiting. In the United States, for instance, a number of states, including Florida, have laws that prevent solar power companies from leasing solar panels to homeowners, even though that model has proved successful in California and elsewhere. Many other states, such as New Hampshire, prevent their utilities from entering the market for distributed renewable energy. These artificial market barriers hurt consumers and hinder climate change efforts, and cities can help lead the way in pushing for their removal.
Just like companies, city governments can also face barriers that prevent sustainable investments. To borrow money in the capital markets, for instance, cities need a credit rating; outside the United States and Europe, however, many lack them. The World Bank estimates that only four percent of the developing world’s 500 largest cities have internationally recognized credit ratings, and only 20 percent have a domestic rating. Yet these cities have about $700 billion in annual demand for infrastructure projects in transportation, energy, waste treatment, and water supply. Providing them with access to credit could become one of the most effective ways to fight climate change, drive economic growth, and improve public health.
Fixing the problem should be relatively easy. In Peru, for instance, the World Bank helped the city of Lima secure a credit rating so that it could raise $130 million to upgrade its bus rapid transit system. The new bus system will dramatically cut carbon pollution, and it will help reduce traffic congestion, saving companies money and improving productivity. The project represents yet another example of the natural alignment of economic, environmental, and health goals.
Countries can also empower their cities to achieve such goals by freeing them to regulate their own power supplies. Mayors in some cities, including Chicago, Seattle, Helsinki, and Toronto, enjoy various forms of leverage over their energy supplies. Some own their own power, others own the distribution system, and still others have the authority to sign contracts with any independent power generator they select. The Chinese government has given major cities, such as Shenzhen, expanded powers to swap out coal for cleaner forms of energy. In Denmark, the national government decided to grant independent regulatory powers to Copenhagen. The city is now on the path to full carbon neutrality, aiming to reach zero net emissions within a decade.
Central governments are not quick to devolve power, but they are doing so with greater frequency as they recognize the national benefits that can come with local control. That trend will only accelerate as the world becomes increasingly urbanized and cities become increasingly connected to one another, promoting the spread of best practices across national borders.
It will be no small challenge for nations to accommodate the swell of urban dwellers. In most cases, urban populations are expanding atop antiquated infrastructure or no infrastructure at all. Yet advances in technology are making transformational advances in infrastructure possible, and that will allow cities in the developing world to catch up to-and even leapfrog-established cities in constructing modern metropolises.
Climate change may be the first global problem where success will depend on how municipal services such as energy, water, and transportation are delivered to citizens.
There is no better example of this than solar energy, which can save governments the expense of building costly new energy transmission networks. The traditional model of a centralized energy plant feeding power to a region entails enormous costs. Solar-powered microgrids and other distributed renewable energy can deliver energy far more efficiently.
Nations and cities that fail to prepare for the urban population explosion risk creating, or worsening, slum conditions that frighten investors, perpetuate a permanent underclass, and impede national progress. The best way to prepare is not by implementing top-down, one-size-fits-all centralized programs but by empowering cities themselves to solve problems, invest in their futures, and harness the potential of their residents.
The challenge facing the Metropolitan Generation-to build modern cities for a new urban civilization-is as monumental as it is essential. Success will spread prosperity globally, and innovation in cities will help break down the differences between the developed and the developing world. City leaders must be strong enough to welcome-and treat as equals, not second-class citizens-all those who come seeking opportunity and farsighted enough to invest in infrastructure that generates maximum economic, environmental, and health benefits.
The city cannot replace the nation-state in pursuing climate solutions or policies to reduce poverty, improve security, fight disease, and expand trade. City leaders seek not to displace their national counterparts but rather to be full partners in their work-an arrangement that national leaders increasingly view as not just beneficial but also necessary.
(Concluded)
(MICHAEL BLOOMBERG is Founder and CEO of Bloomberg LP. From 2002 to 2013, he was Mayor of New York City).
