Building sustainable cities

Building sustainable cities 

An interview with Pedro Miranda, Senior VP and Head of the Global Competence Center for Cities, Siemens and Stephen Beatty, America’s and India Head of Global Infrastructure, on the importance of livable cities.

With the majority of the world’s population now living in cities, it seems clear that more must be done to improve the efficiency and sustainability of our urban infrastructure. Not surprisingly, the topic of ‘sustainable cities’ has risen up the political agenda in almost every country around the world.

According to Pedro Miranda, Senior VP at Siemens and Head of the global technology firm’s Global Competence Center for Cities, there are three main trends that are forcing the issue to the forefront: increasing life expectancy, climate change and urbanization.

“Many of these changes are more pronounced in the developing world where some of the most dramatic changes are occurring, particularly in life expectancy and urbanization,” noted Mr. Miranda. “What this means is that our cities are growing in both number and size – in 1950 there were only 83 cities with a population of more than one million; today we have around 470 cities that serve as home to more than a million.”

Unique approaches for unique cities

As a result, many of the world’s cities – both in the developing and the developed world – are keenly focused on achieving a level of sustainability where economic growth, quality of life and environmental protection form the central pillars of infrastructure development and growth. Yet, while many cities are striving to achieve similar goals, the reality is that no two cities are alike.

“Consider the difference in density and development between New York and Los Angeles; both are developed world cities, both are ‘world-class’ and both attract significant investment, but they are completely different in terms of the pace of innovation, land use and planning priorities,” added Mr. Miranda. “Similarly, the differences between London and Luanda are vast, yet both strive to achieve sustainability within their own unique context.”

Much of the sustainability agenda is being driven by the evolving demands of local populations. Almost irrespective of their location, people tend to want to achieve a higher quality of life, enjoy better safety and security, suffer less traffic and congestion and make more efficient use of their time. Businesses, too, are seeking more efficient and sustainable cities in which to invest in order to achieve more efficient cost structures and lower costs.

Making a sustainable difference

Technology will be key. “Cities around the world are very focused on leveraging technology to achieve greater sustainability, both in terms of hardware and software,” noted Mr. Miranda. “In the transportation sector, for example, we are helping cities select options that not only improve the quality of life for the population, but also reduce energy consumption, emissions and cost at the same time.”

Reducing energy consumption, in particular, will have a significant influence on other sustainability measures. And here, infrastructure developers have a key role to play. According to research conducted by Siemens, energy consumption accounts for around 40 percent of the lifecycle cost of a building. From a total investment perspective and considering a building life span of 50 years, only 20 percent is invested on the design and build phases while the remaining 80 percent is expended during the entire lifecycle in activities such as operations, maintenance, refurbishment and decommissioning.

“New building technologies will play a crucial role in the sustainability equation,” added Mr. Miranda. “But we need to take a longer-term view if we really hope to make a significant improvement in our cities; we need to look beyond political and development cycles to instead focus on planning for the long-term benefit of the city.”

Three significant challenges stand in the way of achieving greater urban sustainability: poor urban planning, the lack of a holistic approach and difficult financing environments. “Good urban planning and a joined-up and integrated approach to urban development are key. The problem of air pollution can’t be solved without changing the way people travel and use energy; and quality of life can’t be improved without making improvements in the environment,” he added.

Paying for change

Financing these urban sustainability improvements will be a major challenge for cities and their inhabitants. In most cases, infrastructure is funded in a way that aims to reduce the upfront cost of development and cover the capitalization of the asset – a process inherent in ‘value engineering’ – versus ‘front-loading’ investment in the design and build phase to deliver longerterm cost efficiencies.

“We spend significant time working with city and department leaders to help develop their business case for investments into sustainability,” noted Mr. Miranda. “Many of these opportunities – particularly in energy conservation and transportation – deliver stable returns and are therefore able to meet the minimum requirements for ‘bankability’, which means that private investment can be brought in alongside public funds and capability to create a more holistic and sustainable funding and financing environment.”

Identifying sustainable success

Selecting the right technology for each city will be a major success factor for civic leaders. In many cases, cities that have the right strategy to improve sustainability select technologies that may not be sustainable themselves – either due to rapidly changing technology or heightened total cost of ownership which drive up long-term costs. “It’s very important to have an open and transparent discussion about technology, whether it is sustainable and how it impacts the long-term costs of ownership,” noted Mr. Miranda.

Creating a baseline for improvement and setting some performance indicators will also be central to success. As Mr. Miranda points out, without a baseline for improvement, cities will be unable to identify the right priorities to ensure funding is being spent in areas that deliver the greatest long-term benefits.

“Once baselines and priorities have been set, it’s really all about sticking to the plan regardless of politics or short-term populist demands,” he added. “Cities that stick to their plan – like Singapore – are among the most successful in the world because they are focused on the long-term outcomes rather than the short-term gains. And at the end of the day, that’s what sustainability is all about – understanding and delivering on the long-term needs of a city.”

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