The economic case for greening the global recovery through cities.
In March 2020, as the World Health Organisation declared a pandemic, cities around the world went quiet. Citizens were told to stay at home where possible, leaving streets and squares from Accra to Zagreb empty. Cities are often hubs of social, cultural and economic activity, but COVID-19 cut these activities short.
Cities, often home to a large percentage of a country’s population, economy and assets, are at the centre of the COVID-19 crisis. As many parts of the world see their daily infection rates rise as part of a second wave, cities need to reimagine how they operate. They must be at the heart of national government solutions to the COVID-19 health and economic crises.
of the global population live in cities, rising to 66% by 2050
of global GDP is generated in cities
of energy-related emissions are created by urban areas
Major urban infrastructure investments have some of the highest potential to unleash new economic activity, create local jobs, increase public health outcomes and set cities – and countries – on a path of prosperity and sustainable long-term development.
Investing in cities also offers among the most promising opportunities to accelerate the transition to a resilient and low-carbon future while responding to the COVID-19 crisis with speed and impact.
After taking immediate measures to protect the people and communities most vulnerable to COVID-19, national governments have launched the first of what is likely to be many waves of investments to rebuild their economies.
But despite the clear immediate and longer-term opportunities, economic rescue and recovery packages have generally ignored cities.
of investment in transport has gone towards green measures
of investment in energy has gone towards green measures
of investment in waste has gone towards green measures
At the Coalition for Urban Transitions, our work shows national decision-makers that smart urban policy is central to achieving national economic, social and environmental goals. We believe that investing in cities as part of their COVID-19 recovery packages can help national governments create much needed economic security and jobs today, whilst making rapid strides towards a low-carbon, resilient, and inclusive future tomorrow.
We wanted to make a clear case for national government involvement in cities in the wake of COVID-19. We identified seven key areas where investment and policy reforms can create significant economic and social benefits.
These priority areas contain policy recommendations that are:
View the full list of recommendationsThe Economic Case for Greening the Global Recovery through Cities
Through seven priority areas for investment, national governments can yield substantial economic dividends, rapidly create and protect millions of jobs for vulnerable populations and deliver quick, durable and inclusive economic, health, and environmental benefits for their citizens, all whilst contributing to long-term urban resilience.
Providing city dwellers with access to fundamental services, such as affordable housing, essential urban infrastructure and clean water, can make cities more climate and pandemic resilient. Buildings and infrastructure form the essential fabric of our rapidly growing urban landscapes, and thus provide an important opportunity to stimulate the economic recovery.
The way in which we build new infrastructure is crucial; done right it will set us on the path towards a prosperous and low-carbon society for decades to come. Currently, at least 1.2 billion city dwellers lack access to affordable and secure housing, while 2.4 billion lack access to safe water and sanitation. COVID-19 and climate change will only exacerbate such struggles.
Furthermore, about 1 billion people lack reliable access to energy globally, and a similar amount lack sustainable access to cooling, while climate change is increasing the occurrence of deadly heatwaves. As buildings account worldwide for 40% of CO2 emissions from energy, getting construction right will not only help reduce emissions – with the potential to deliver almost 60% of cities’ carbon abatement potential – but also lead to important economic and social opportunities.
As national governments look to enhance urban resilience, their policies must go hand in hand with more inclusive development practices. Participatory upgrading programmes can help to transform slums into neighbourhoods that are sustainable, affordable and desirable places to live.
The automotive and public transport sectors have been severely hit by the global
economic downturn resulting from COVID-19. But investing in clean mobility can offer important economic gains moving forward. Post-COVID analysis for Europe suggests urban rail and bus rapid transit schemes, as well as manufacturing electric vehicles (EV) and expanding EV charging networks, could deliver a return on investment of $2 for every $1 invested.
Did you know?
As part of its stimulus measures, France has increased funding for EVs and EV infrastructure, including US$390 million in green research and development for vehicle manufacturing. China has extended subsidies on electric vehicles to 2022 and announced US$379 million in funding for EV charging infrastructure.
The transport sector contributes up to 70% of urban air pollution, and thus provides an important opportunity to implement measures to reduce cities’ carbon emissions. Public transport is an investment that can create long-term jobs quickly while reducing polluting emissions, congestion and traffic accidents whilst improving access to jobs and other opportunities.
Global electricity demand is expected to increase up to four or five times by 2050. Renewable power offers a means to meet this demand with clear benefits: renewables are cheaper than fossil fuel-based thermal power generation in many major markets, and can deliver half of cities’ carbon reductions.
Investment in renewables is an investment in a lasting workforce – in the 11 years since the last global economic crisis, the clean energy sector has added 11 million jobs. Green industries have also shown to create more jobs per amount invested than fossil fuel industries, with every US$1 million shifted from fossil fuels to renewable energy and energy efficiency producing a net increase of five jobs.
Increasing investment in renewable energy can help alleviate energy poverty for the 1 billion people who lack access to energy and similar amount who lack access to cooling. Emerging economies must massively expand the supply of affordable clean electricity to meet their economic and human development goals.
Streets make up the majority of public space, and their design fundamentally shapes a city’s identity, appearance and connectivity. Designing streetscapes for people by enhancing active transport is a low-cost, low-carbon and job producing investment opportunity.
Active transport also boosts access to essential services and jobs. By transforming city spaces to reallocate more road space to walking, cycling and public transport, urban citizens, particularly those in lower-income groups, are provided with more affordable ways to access economic opportunities.
Did you know?
After the First and Second World Wars, several countries implemented large-scale tree planting programmes in part to provide employment to the many citizens and soldiers who found themselves unemployed at the end of the war. In the US, between 1933 and 1943, nearly 3 million workers received financial support through the Civilian Conservation Corps, through which they planted 3 billion trees and learned important skills.
Trees provide enormous benefits to urban areas in curbing air pollution and reducing dangerous heat exposure caused by the urban heat-island effect. Investing less than US$4 annually per resident on tree planting along streets in 245 cities housing a quarter of the world’s population could improve the health of millions of people and reduce high temperature-related mortality by 2.4-5.6%.
The planting and management of such trees comes with high job potential, especially for lower-skilled labour. For every US$1 million invested in reforestation and sustainable forest management, nearly 40 jobs can be supported, a good proxy for the job potential stemming from expanding urban greenery.
COVID-19 is creating a tidal wave of waste and cities are at the heart of it. Many locales are seeing a surge in littered masks along roads or washing up on beaches. Some places have lifted or postponed single-use plastic bans and now stand to deal with the consequences of it. Implementing circular economy interventions could reduce the emissions associated with our materials use by a third.
At least 24 million people globally work in the recycling industry, of which at least 15 million are working informally. Investing in recycling, reuse and repair keeps cities from drowning in (littered or landfilled) waste, while it rapidly provides numerous jobs for vulnerable groups.
Aggressively expanding recycling, reuse and repair of discarded waste products will support millions of additional formal and informal jobs – which often require little or even no education – whilst keeping cities cleaner, healthier and safer, and helping to preserve resources for future urban generations.
Investment in research and development (R&D) in clean technologies is among the most attractive COVID-19 recovery policies, identified to have high economic multipliers combined with a high positive climate impact. This will be critical given the economic uncertainty that is expected to reduce or postpone investment and innovation activity.
Investment in R&D in clean technologies can also generate million of jobs in manufacturing and installation. Between 2003 and 2010, new cleantech segments in the US produced explosive job gains. Roughly 26% of all clean economy jobs in the country were found in manufacturing, compared with just 9% in the broader economy. This was the result of many green technologies being quite manufacturing-intensive, thereby creating more jobs for low- and middle-skilled workers.
Efforts to develop, deploy and sustain innovations in IT systems during “normal” times have been paying off during the COVID-19 pandemic, enabling governments to adapt quickly and provide the solutions that are needed as part of the response.
Did you know?
Argentina’s social protection agency (ANSES) has been able to provide, without intermediaries, an emergency income to 8 million people who work in the informal sector, thanks to an existing digital platform and IT systems in place, which provide remote access to numerous services. Over the past 5 years, broadband connectivity in Argentina has been improved by 500%. So when COVID-19 arrived, 90% of the population had internet access in their homes via their phones, making for successful deployment of IT systems in protecting the poor and vulnerable.
In addition to the seven sectoral recommendations, the Coalition for Urban Transitions recommends national governments consider three cross-cutting reforms to enhance the impact and effectiveness of their investments.
Structural trends combined with the current economic downturn suggest that coal, oil and gas prices are likely to remain low for the foreseeable future. Countries that are major energy importers can use the opportunity to remove remaining fossil fuel consumption subsidies, made unnecessary in a period of low prices, and increase fossil fuel taxes without triggering significant consumer price increases. Nigeria has used the collapse in oil prices to remove fuel subsidies and save an estimated US$2 billion a year, savings that are critical for dealing with the pandemic.
Cities are acting to respond to the COVID-19 crisis, even as budgets shrink. Some city governments are making low-carbon investments under their own urban recovery strategies, based on existing resources.
It is now critically important for national governments to support cities, as much of the financing required for these clean investments will either be provided by or mediated through national governments.
We know cities provide an important pathway to build back from the COVID-19 crisis and lead to an equitable, resilient, and prosperous future. It may take some time for the pandemic to subside, but once it does we have the tools at our disposal to both restore a sense of normalcy in our lives and to get the economy back on track. The solution – investing in cities – is right there in front of us: we just need to recognise it to realise a green global recovery.
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