Better urban planning, being cleaner, greener and more resilient, and sourcing more innovative financing are needed if Asia's cities are to cope with and benefit from a rapid phase of urbanisation, says the Asian Development Bank president Takehiko Nakao.

By 2050, 3 billion people – a full two-thirds of all Asians – will live in cities, attracted by the prospect of higher earning jobs and a better future for their families. Cities already provide more than 80% of the region’s gross domestic product and this is set to grow. Fast-paced urbanisation has been instrumental to Asia’s swift economic growth and sharp drop in poverty in recent decades, but it has also brought huge challenges.

Asia has two-thirds of the world’s slum dwellers, and only one-10th of all solid waste ends up in proper landfills, compounding environmental and health problems. Meanwhile, the construction of water, sanitation, housing and other infrastructure has not kept up with demand.

Urban areas account for 60% to 80% of Asian countries’ energy consumption and 75% of their carbon emissions. Without interventions, both of these figures will go up. This is bad for the environment and for health; 4.5 million people in Asia die every year due to urban air pollution.

Many Asian cities are extremely vulnerable to the hazards caused by climate change. Kolkata, Shanghai, Bangkok, Yangon and Manila are all at high risk of coastal flooding as sea levels rise, threatening lives, jobs and essential services. With the cost of natural disasters set to rise in coming years, cities will clearly be the major battleground in the region’s fight against climate change.

To tackle these issues, I believe we need to address five key areas.

Better urban planning

As city leaders face the hard decisions of prioritising the upgrades of city services on limited budgets, they need integrated urban plans that incorporate environmental and economic goals, as well as national and local demands. Planning should take into account the various needs of all those living, working and studying in the cities. It should be a participatory process, involving businesses, academia and community organisations.

Singapore, for example, has a tightly interconnected urban transport network. Utilities, health and education services are designed to meet needs flexibly and expand or contract accordingly. Parks and numerous other green spaces provide recreation and keep the air clean. 'Green buildings' – with better insulation, roof gardens and rain water harvesting facilities – reduce electricity and water usage, and cut carbon emissions.

Clean cities

Cities need to provide safe and effective water, sanitation and waste disposal services to avoid health problems and long-term environmental degradation.

The city of Bhopal in India recently cleaned up its Upper Lake, which was once a local tourist spot famed for boating and bird life but had become polluted. With an improved waste collection and disposal system, coupled with renovated water pumping systems, and a better water distribution network, the lake has now recovered its beauty, and provides 6 million gallons of clean water to Bhopal residents each day. Through loans and technical assistance, the Asian Development Bank [ADB] supported this project and other similar water and waste management initiatives across Asia and the Pacific.

A private sector initiative in China, supported by an ADB loan, provides a waste-to-energy solution. A dozen plants built by a clean energy company in cities across the country are turning 4.6 million tonnes of household waste annually into 1.3 billion kilowatt hours of clean electricity, avoiding the dumping of much untreated waste into landfills that contaminated the soil and groundwater.

Green cities

To make our cities greener, we need more clean energy. ADB is spending more than $2bn a year to support renewables such as solar, wind, biomass and geothermal, and to improve energy efficiency in buildings and industries. For example, a hydropower plant in central Bhutan built with private financing is generating electricity for export to energy-deficient Indian cities, avoiding carbon emissions from coal-fired power plants to power those cities.

Increasing energy efficiency will also curb energy demand and make city air more breathable. Investing just 1% to 4% of overall energy sector investment in energy efficiency measures such as heat recycling in steel and cement factories, better insulation in buildings and efficient home appliances could meet 25% of developing Asia’s projected increase in primary energy consumption by 2030.

In addition, Asia needs more mass public transport such as the subway in Ho Chi Minh City or the bus system in Dhaka. These public transport systems can be linked to cycle and pedestrian pathways so people can switch easily from one mode of transport to another. Vientiane is testing such an integrated urban transport system, including bus, bicycle and walking routes.

Resilient cities

Urban planners should consider disasters and the potential stress from climate change. With small additional upfront investments, we can save lives and avoid large-scale rebuilding costs later. Better disaster risk management should include early-warning systems and emergency response plans.

Some coastal cities in Bangladesh, a low-lying country regularly devastated by floods, are raising the levels of roads to ensure they are passable in floods, increasing the capacity of drains to avoid overflow, and building cyclone shelters and emergency access roads.

Innovative financing

Finally, to do all this, cities must explore and expand existing and new sources of funding.

Developing Asia needs to invest about $100bn per year in even basic municipal infrastructure such as water, sanitation and roads, but there is only about $40bn to spare from existing sources. Much more money is needed to make our cities cleaner, greener and more resilient. Generating more income through property taxes, utility charges or administrative fees – notably at the local level – would help.

New sources of funding should include issuing municipal bonds or project bonds, and using public private partnerships [PPPs]. One example of more innovative financing is the use of private equity funds to promote PPPs in the Philippines. The Philippine Investment Alliance for Infrastructure, whose investors comprise the ADB, the government pension fund, a Dutch pension fund manager and an Australian private investment bank, is designed to draw other private funds into infrastructure.

City leaders with a long-term vision that extends beyond their own terms in office are central to tackling these challenges in the best interest of their own cities and the 3 billion people who will live in them decades from now. As the head of Asia’s largest development organisation, I am strongly committed to supporting them in building more liveable cities.

Takehiko Nakao is the president of the Asian Development Bank.


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