How can cities become big and successful, not just big?

Urban world

The global population is shifting to cities1

Cities will become more powerful than nations2

Megacities merging to form global city regions whose populations dwarf many countries2

1

2

Massive urbanization creates many challenges

1. Existing cities will have to expand and new cities will have to form …

2. Cities are at different levels of maturity and require different approaches

3. Cities are vulnerable

4. Cities are resource-intensive

… requiring infrastructure spend …4

Number of global cities 1970–2030

3

The upside of urbanization is innovation

The upside is cities taking a lead in solving their own problems

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1m and

US$60t to US$70t US$15t to US$25tShortfall Potential

ways to address shortfall

Needed Greater private sector involvementIncrease long-termfinancing optionsBending the cost curve

Innovative infrastructures5

Build from scratch or embed latest technologies and thinking

To create smart, competitive, eco-friendly cities

OverdevelopmentData: Current urban housing plans in China geared to accommodate 3.4 billion people – 2015 population is only 1.4 billion and expected to slow.

Model

Examples

Biggest upside

Biggest threat

Developing infrastructures7

Invest nationally in infrastructure to help drive economic growth

To become more competitive and attract foreign investment

Congestion, pollution and slumsData: Over 30% of city dwellers in 2050 will live in slums

Existing infrastructures6

Invest in and develop infrastructure around existing constraints

To stay competitive as legacy trade, commerce and cultural hubs

Aging infrastructure and sustained underinvestmentData: EY survey: 82% of public and private sector respondents said public’s willingness or ability to pay for infrastructure will have a dramatic or significant impact on future of urban RE and infrastructure

• Masdar City, UAE• Shenzhen, China• Singapore• Hong Kong

• London, UK• New York, US• Sydney, Australia• Tokyo, Japan

• Rio de Janeiro, Brazil• Mumbai, India• Lagos, Nigeria• Jakarta, Indonesia

of global cities are dealing with climate change effects.8

70%of projected GDP is at risk from manmade and natural disasters in 301 cities around the world.9

US$4.6 trillionof urban areas are coastal and face danger from rising sea levels.8

90%

Cities generate 70% of global CO2 emissions.

CO2Cities consume 2/3 of the world’s energy.

4

5

6

The upside of urbanization is greater private sector participation

7

Compact strategies

US$3t in capital investment in urban infrastructure can be saved in the next 15 years by pursuing more compact strategies.10

in Asia and Africa

90%

Optimization

Optimizing vehicle flows can achieve carbon and energy savings of 10% to 15%.11

Cap and trade

Tokyo’s cap-and-trade program has achieved 25% reduction in greenhouse gas (GHG) emissions of covered facilities after its5th year.12

DriverlessAutonomous electric cab in 2030 could emit up to 94% fewer emissions per mile than a conventional gasoline car.13

ResiliencyBristol (UK), New Orleans (US), Medellin (Colombia), and Melbourne (Australia) are among the cities that have appointed a Chief Resiliency Officer.14

Net zero energy — where the renewable energy generated by a building in a given year equals the total energy the building uses — has become a goal for many buildings around the world.

Net zero energy

The C40, a network of global mega-cities, is acting locally and collaboratively to reduce GhG emissions.

C40

The upside is cities become "smarter" ... the promise of 10 billion thingsNumber of smart city IoT units

Smart cities market

size 2014

Smart cities market

size 2020CAGR

1B 10B9x

Cities will become “smarter” when they leverage data from ICT systems, sensors, devices and other connected assets to improve decision-making across multiple urban challenges related to the physical and social infrastructure.15

US$300b–US$500b 14 – 20+% US$700b–

US$1500b

Cities debated whether they need their own foreign policies at the 2105 Chicago Forum on Global Cities.

The first Global Parliament of Mayors will meet in the Hague in September 2016.

Many governments face fiscalpressure …

… making it difficult to fund infrastructure and other cityprojects

2008 2015

79.9 111.2

OECD countriesGovernment debt-to-GDP16

Private sector participation is essential…

Some benefits of infrastructure PPPs

Private sector financing

Greater budgetary certainty

Long-term value-for-money through appropriate risk

transfer to the private sector over the life of projects

Private sector innovation and technology

Shenzhen

GuangzhouHong Kong

120MHong Kong-Shenzhen-Guangzhou

185 countries are smaller 173 countries are smaller 160 countries are smaller

TokyoKyoto

Kobe Osaka

60MTokyo-Osaka-Kyoto-Kobe

Sao Paulo

Rio de Janeiro

40MSao Paulo-Rio de Janeiro

2014–2030

$

of global GDP

48%2015

Social infrastructureAdministration and governance

ICT

Equipment

Communications

Education

Health care

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Physicalinfrastructure

Builtenvironment

BuildingsPublic spaces

Power and utilities

Energy

Water

Waste

TransportTicketing

Mobility

Smart city infrastructure

or

1. World Urbanization Prospects, United Nations, 2014, http://esa.un.org/unpd/wup/Publications/Files/WUP2014-Report.pdf.

2. State of the World’s Cities 2010/2011, UN Habitat, 2010, http://unhabitat.org/books/state-of-the-worlds-cities-20102011-cities-for-all-bridging-the-urban-divide/.

3. World Urbanization Prospects, United Nations, 2014, http://esa.un.org/unpd/wup/Publications/Files/WUP2014-Report.pdf.

4. B20 Infrastructure & Investment Taskforce Policy Summary, B20 Australia, July 2014, http://www.b20australia.info/Documents/B20%20Infrastructure%20and%20Investment%20Taskforce%20Report.pdf.

5. “China is Still Building Ghost Cities,” The Diplomat, 19 October 2015; http://thediplomat.com/2015/10/china-is-still-building-ghost-cities/.

6. Infrastructure 2014: Shaping the Competitive City, EY and Urban Land Institute, 2014; http://www.ey.com/Publication/vwLUAssets/EY_-_Infrastructure_2014:_shaping_the_competitive_city/$FILE/EY-infrastructure-2014-shaping-the-competitive-city.pdf.

7. Sustainable Development Challenges: World Economic and Social Survey 2013, United Nations, 2013; http://www.un.org/en/development/desa/policy/wess/wess_current/wess2013/WESS2013.pdf.

8. Why Cities: Ending Climate Change Begins in the City, C40 Cities, 2016, http://www.c40.org/ending-climate-change-begins-in-the-city.

9. Lloyd’s City Risk Index 2015–2025, Lloyd’s, 2015, http://www.lloyds.com/cityriskindex/.

10. Cities for People: Insights from the Data, Energy Innovation, April 2015, http://energyinnovation.org/wp-content/uploads/2015/05/C4P-Insights-from-the-Data.pdf.

11. The Route To Carbon And Energy Savings: Transit Efficiency In 2030 And 2050 — Final Report, Center for Neighborhood Technology, Chicago, November 2010; https://www.transit.dot.gov/regulations-and-guidance/environmental-programs/route-carbon-and-energy-savings-transit-efficiency.

12. “Tokyo Cap-and-Trade program slashed GHG emissions by 25% after 5th year,” ICLEI, 3 January 2016, http://www.iclei.org/details/article/tokyo-cap-and-trade-program-slashed-ghg-emissions-by-25-in-five-years.html.

13. “Electric 'robocabs' would reduce US greenhouse emissions by 94% — study,” The Guardian, 6 July 2015; http://www.theguardian.com/environment/2015/jul/06/electric-robocabs-reduce-us-greenhouse-emissions-94-percent-study.

14. “2nd Annual Chief Resilience Officer Summit Begins November 9 in Mexico City,” 100 Resilient Cities, 6 November 2015; http://www.100resilientcities.org/blog/entry/2nd-annual-chief-resilience-officer-summit-begins-november-9-in-mexico-city#/-_/.

15. “Gartner Says Smart Cities Will Use 1.1 Billion Connected Things in 2015,” Press Release, 18 March 2015; http://www.gartner.com/newsroom/id/3008917.

16. “Percentage of Public Debt in GDP Around the World,” Global Finance, 6 May 2016; https://www.gfmag.com/global-data/economic-data/public-debt-percentage-gdp?page=2.

67% 33%

2.5 billionurban dwellers added

50% 50% 33% 67%

1950 2008 2050

of global population

19%300largest cities

1970

Megacities3

1970 2014 2030

02 23 41

Mid-sized cities

1970 2014 2030

294 417 558

Large cities

1970 2014 2030

21 43 63