Urbanization, congestion, energy

Up front: urbanization, congestion, energy 

If you thought our cities were crowded today, just wait twenty years. Between now and 2030, more than 180,000 people will migrate into urban areas each day; that's 5.5 million people per month, roughly the size of Singapore or Denmark.


It won't be an easy process for anyone involved. In most cases, new urban migrants will find themselves entering cities that are already struggling with high levels of unemployment, decaying infrastructure and a lack of affordable housing. If things continue on their current trajectory, the vast majority can expect to end up in slums, toiling as unskilled laborers or in the informal economy.

City governments should be concerned. Massive urban migration will put incredible pressure on city services, economies and infrastructure. Even assuming jobs and affordable housing can be found for all of the new urbanites (and that is highly improbable), city planners will need to fundamentally rethink their approach to urban infrastructure.

It is not a case of simply laying down more tarmac and pumping more water. Land is at a premium, water is increasingly scarce and - likely the most limiting factor - finances are tight. Indeed, barring a miraculous recovery of national economies over the next decade, most cities are facing an infrastructure funding shortfall in the billions of dollars.

The traditional approach to urban infrastructure must change. Part of this burden will be on urban planners and infrastructure developers who will need to facilitate growth within the context of their local environment and specific financial situation. Politicians will also have a role to play by creating policies that encourage private investment and set a vision for the future. Even individual citizens will be central to achieving urban infrastructure goals if the right incentives for conservation can be identified.

However, the challenges of urbanization cannot be left to city governments to sort out alone. Urbanization is a national issue and demands a national strategy. Funding is certainly one area that will require inter-governmental cooperation, but so will conservation, the creation of national standards, health and welfare, and a host of other issues that are critical to the national agenda.

Clearly, there are still a number of significant challenges that must be solved before cities can lay out the welcome mat to the masses of new urban hopefuls.


Road congestion is hugely expensive. In 'opportunity cost' alone, the numbers are staggering: by 2025 the UK is expected to lose USD36 billion each year1 due to traffic jams; the US already loses almost twice that.

Reducing congestion is important for a number of other reasons. A clear winner would be the environment, benefiting from fewer cars idling on roadways and faster travel times which should result in lower fuel consumption and carbon emissions.

Traffic congestion also impacts the quality of life for those living or working in the city. It is one of the few issues that the world's population can gripe about in harmony; few urbanites boast about the quality of their roads, most outright decry them.

All of this has led many urban areas to focus on renewing their development of mass transit systems. Indeed, there has been a flurry of activity in major urban areas around the world, as we see from the work recently completed or currently underway in Vancouver, Rio de Janeiro, Singapore, Mumbai and Brisbane (see more in each of our City Leaders sections).

Many cities are also implementing road-use fees as a way to cut vehicle use in highly congested areas. London's system is likely the most famous, but similar programs exist in countries like Norway and Singapore, and are a perennial topic of conversation in New York. A number of jurisdictions are also testing new approaches to road-use fees. In Rotterdam, for example, the government is turning congestion fees on their head by paying drivers to stay off the road, rather than taxing them for being on it (full story here).

Governments looking for a comprehensive approach to reducing congestion will want to examine the programs in Singapore (full story here). By combining clear policy on development objectives, tight restrictions on car ownership, valuable incentives for reducing road use and significant investments in mass transit, the city-state has effectively eliminated congestion altogether. Given that Singapore has the second highest population density of any urban area, that is quite an achievement.


Not since Thomas Edison invented the light bulb has the power industry seen so much innovation and change. On all sides - upstream, downstream and distribution - new technologies and environmental policies are changing the very fundamentals of the way we use and generate power.

Smart meters - and the smart grids they will eventually enable - will not only alter consumption patterns, they will also allow power generators to balance out their capacity peaks (full story here). New forms of renewable generation capacity are rapidly coming to market, offering a real opportunity for governments to both reduce carbon emissions and (for many countries) develop a secure and sustainable power supply. And already the move towards electric cars and urban transportation is starting to add new demand to the grid (full story here).

But while all of this seems like cause to celebrate, it may be a bit early to pop the Champagne. Take smart meters for example: many countries are doing a rather good job at installing little boxes in every home, but few have mastered the skill of using the resulting data to make the grid more efficient.

The jury is still out on renewable energy, too. Stripped away of all the national subsidies and tax incentives that currently make many technologies economically viable, most renewable sources tend to be somewhat expensive when compared to other generation options, and often deliver unreliable base loads to the grid. Governments will need to work closely with power generators and distributors to find effective ways to incorporate renewable sources without inflating consumer prices.

And while the widespread adoption of electric vehicles would seem - on the surface - to be an obvious win for the environment, countries that rely on coal-fed plants will be doing little more than downloading the carbon footprint onto their generators.

That said, this publication firmly believes that energy policy, generation and consumption must change if the world is to successfully balance economic growth against environmental survival. Smart meters are the first step to achieving efficiency; renewable energy subsidies are sorely needed to nurture a new industry; electric vehicles will reduce carbon emissions.

But we also believe that none of these innovations will achieve their full potential without a fundamental reformation of the power industry. That may be the most difficult challenge of them all.

1The Eddington Transport Study, UK Department for Transport, December 2006

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