Unprecedented scale of urbanisation in the region poses brand new challenges and requires new solutions
Asian urbanisation still has a long way to go, with the number and size of cities getting ever larger. In 2010, the urban share of Asia’s population was still only 43 per cent, compared to 52 per cent worldwide. By 2050, the figure for Asia is projected to reach 63 per cent, gaining on but still below the 67 per cent global average. Thus, Asian cities will have even higher density and, by 2025, the number of mega-cities in the region is expected to increase to 21 from a global total of 37.
While no two cities are the same, many of Asia’s cities face common challenges, including a sharp increase in registered vehicles, rising levels of industrial production and (to some extent) a reliance on coal-fired power plants, according to the Asian Development Bank’s report “Green Urbanisation in Asia: Key Indicators for Asia and the Pacific 2012”.
“Asia’s urbanisation is historically unprecedented in scale, speed and pattern, and this trend will continue and can pose enormous challenges, including environmental degradation,” Changyong Rhee, chief economist of the ADB, said at the launch of the report in Bangkok last week.
The report highlighted the fact that development and implementation of policies promoting green cities is urgently needed. It also states that green-city policies are a must as, without preparation, the cities will be prone to disasters.
This was witnessed in Thailand when Bangkok – home to nearly 10 million people – was hit by floods last year, causing huge economic losses, it said.
With urbanisation comes greater vulnerability to flooding. A projected 410 million urban Asians are at risk of coastal flooding by 2025, compared to 300 million in 2010. About 250 million are at risk of inland flooding, as experienced by Bangkok last year. The number of people at risk of inland flooding will also rise, to roughly 350 million by 2025.
On coastal flooding, while Maldives’ vulnerability will be 100 per cent by 2025, Thailand’s is 60 per cent. On inland flooding, Thailand’s vulnerability is 29 per cent.
Urbanisation also brings about greater pollution. More than half of the world’s most polluted cities are in Asia, and air pollution contributes to half a million deaths yearly in the region. Air pollution in Asian cities is higher than in other regions and a staggering 67 per cent of Asian cities (versus 11 per cent of non-Asian cities) fail to meet the European Union’s air quality standards. The report shows the income elasticity of demand for vehicles, meaning that a 10 per cent increase in per capita income is associated with a 10 per cent increase in a nation’s per capita vehicle ownership rate. Future CO2 emissions, if left unchecked under a business-as-usual scenario, could reach 10.2 tonnes per capita by 2050, three times the 2008 level, with disastrous consequences for both Asia and the rest of the world. Three of the top five CO2-emitting economies are in Asia, and per-capita emissions are rising at an alarming rate. Increasing demand for electricity is another source of CO2 emission.
Further, in many Asian countries water is still heavily subsidised. Garbage collection in Asia is another major challenge, especially because people who earn more usually consume and dispose of more. Meanwhile, in 2010, the region was home to 506 million slum dwellers, or more than 61 per cent of the world’s total slum-dwelling population, and this could lead to higher crime rates.
“In the green Asian urbanisation strategies, conservation and efficiency improvements will be essential, considering the combined speed and scale of Asia ’s urbanisation,” the report said.
Green urbanisation strategies in Asia should take into account the distinctive characteristics of Asia’s urbanisation. In Asia, critical masses of people will live in relatively small areas, making it important to take advantage of cost effectiveness in supplying essential services such as piped water and sanitation. Efficient mass public transport systems, building on changes in transport and communications technology, will link and distribute economic activities in new spatial patterns.
The report noted that full social costs and benefits must be incorporated for efficient resource allocation. Singapore has imposed congestion and emission charges, while Indonesia removed inefficient subsidies and South Korea introduced carbon taxes.
Regulations and standards should be introduced in a timely manner where necessary. These can help to correct for market or coordination failures on air, water, vehicles and appliances, as in India. The government can construct green industrial zones to assist manufacturing to relocate, as in Indonesia. To reduce carbon emissions, China has
introduced a bus rapid transit system, while India has resorted to subways for densely populated cities.
“Asia must incorporate environmental priorities in city planning. This is under way through building new and satellite cities with renewables as primary energy sources, as piloted in China. Urban sprawl can be tackled by developing a local system of compact, walkable satellite cities centred around high quality train systems, without heavy reliance on highways and major roads for connection, and by reviving existing city centres.”
Asia has already been facing enormous environmental challenges. Three of the top five carbon dioxide (CO2) emitting economies and 11 of the 20 most polluted cities in the world are in Asia. In many Asian nations, losses from traffic-related congestion amount to 5 per cent of GDP. In rich Asian cities (such as Hong Kong, Singapore, Seoul and Tokyo).(?) The situation is particularly worrisome in poor cities that experience rapid growth, where pollution is becoming extremely serious, infrastructure supply lags behind demand, and basic public services such as water connections and solid waste disposal do not reach the majority. In addition, many residents live on marginal lands where they face risks from flooding, disease and other shocks.
The report suggested the start education, so that the public becomes informed of the benefits of reducing pollution. When the effects of pollution only become apparent in the medium to long term, the public may not be sufficiently aware of the issues and ultimate costs.
Turning to industry emissions, regulations can facilitate relocation of traditional manufacturing. However, if major cities have more stringent regulation than smaller ones and rural areas, the different standards create an incentive for dirty activity to migrate to less-populated areas, triggering a “race to the bottom”.
Governments are also advised to remove subsidies for renewables, to increase transparency and accountability of politicians.
On financing for green cities, which require huge up-front investment, the public revenue system – covering property taxes, service charge, income taxes and so on – should be designed for efficiency. The poor can only afford to pay a little for services. While providing low service tariffs to the poor would reduce consumption inequality, it would also remove incentives for suppliers to provide the services. One solution is dynamic pricing. Another is to educate wealthier households, which may be willing to cross-subsidise the poor if they are made aware of the consequences of possibly contacting diseases from the poor who become ill due to lack of access to clean water, sanitation or solid waste disposal. Land leases, generating one-time payment, could also raise huge funds. In 2012, China introduced property tax on residential and business properties, including urban villages, following their integration into city administration. A property tax provides an incentive for cities to accept new residents and an explicit tax base to finance their services. It also ensures an annual flow of revenue. And in growing cities where real estate prices are appreciating, a property tax will yield a larger stream of revenue for the government.
Another way to raise funds is to issue municipal bonds. This policy has helped US cities reduce water pollution, infant mortality and the rural–urban death rate differential. In the late 19th century, costs of large water systems – supply and treatment – were huge and US cities issued municipal bonds to build such infrastructure. In October 2011, Shanghai and Shenzhen cities and Guangdong and Zhejiang provinces were authorised to sell debt themselves instead of going through the central government for financing.
Politicians should be incentivised to ensure transparency and accountability. A low-cost way is through independent non-government organisations to create “report cards” that can be distributed to increase voters’ awareness of recent pollution trends and of initiatives that individual politicians have pursued to achieve green cities.