Urbanization: Opportunities and Challenges

Tianjin Eco-City Cleantech Focus

Mark L. Clifford

Executive Director, Asia Business Council

September 28, 2010

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The future of Asia lies within its cities

About half of the world’s most populous cities are located in Asia

By 2030, more than half of the world’s urban populations will live in Asian cities

China has 236 cities with more than 500,000 residents

80% of the future economic growth of the developing world will come from its cities

0

20

40

60

80

100

Korea Malaysia Taiwan China Indonesia Vietnam India

Urban Population as % of Total Population 1990

2009

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Asian economies are rapidly urbanizing

+7.7

+3.8 +10.1

+12.2 +20.2

+8.5 +12.6

Sources: Country sources, Statistical Yearbook for Asia and the Pacific 2009 (United Nations ESCAP),

http://www.adb.org/Documents/Books/Key_Indicators/2010/Part-III.asp

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Urbanization presents many challenges…

Demand for Better Buildings

Increasing Electricity

Demand and Shortages

Water Scarcity and

Cleanliness

Air Pollution

Traffic Congestion

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…But also new business opportunities

Green Buildings

Electricity Management and

Energy Efficiency

Waste Water Treatment

Pollution Control

Transportation and Mobility

Other Opportunities

Green Buildings

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Green Buildings Are Key to Asia’s Future

Green building are the

cheapest, quickest way that

Asian countries can improve

energy efficiency

Green buildings cost only

slightly more than conventional

buildings (typically 0-4%) and

often have a more rapid payback

than expected

Experience will bring costs

down and increase efficiency

gains

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Buildings emit one third of the world’s energy

Buildings use 30%-plus of

all primary energy in the

world

Energy use in one ordinary

18-story high rise in

Singapore or Hong Kong has

greenhouse gas emissions

equivalent to 900 cars

Efficient buildings enhance

energy security and

sustainability

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The Zuellig Building to save 15% of energy

and 47% of water usage

33-story high rise in Makati

City in Manila scheduled for

completion in 2011

Energy-saving technologies

Daylight dimming system

Carbon dioxide sensors in

occupied areas

Variable speed drives for chilled

water pumps

Water-saving technologies

Selection of efficient fittings

and fixtures

System to capture rain and

condensate water

Water-saving surface materials

State-of-the-art drainage and

irrigation systems

Electricity Management and Energy

Efficiency

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Electricity shortages will affect Asia in the

future

In developing Asian

economies, demand for

electricity has been

increasing 2.4% annually,

more than double the global

rate

Asian cities are expected

to see more serious

electricity shortages over

the next 25 years

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Korean Smart Grid to reduce 200 million tons

of greenhouse gases by 2030

Smart grid technology

A smart grid uses digital technology to communicate with

facilities and appliances to understand usage patterns,

thus delivering energy more efficiently

Smart grid market is estimated at about $15-20 billion

today, and rising to $120 billion annually by 2030

On Jeju Island, south of Seoul, the Korean government

will construct smart grid infrastructure and then connect

buildings, transportation systems, and renewable energy

sources to the grid

The Korean government has teamed up with Samsung, SK

Group, and LG Electronics to provide power delivery

systems that can save energy

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Functions of Korea’s Smart Grid

Variable pricing based on

demand reduces electricity

consumption

Smart meters provide

guidance to consumers on

energy usage

Information and

communications technologies

(ICT) sensors allow

utilities to monitor the

grid system in order to

improve control of the

electric distribution grid

Image Source: buildaroo.com, http://buildaroo.com/news/article/south-korea-nationwide-smart-grid/

Waste and Water Treatment

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Asia suffers from low per capita availability of

fresh water and high pollution

More than 1 billion people in

Asia have inadequate access to

clean water

By 2030, Asia faces a 40% gap

between water demand and supply

In China, less than 40% of

municipal waste water is treated

16 of the world’s 20 most

polluted cities are in China

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Hitachi’s wastewater treatment

Hitachi’s Plant Technologies

Division and two cities in

Japan began selling treated

sewage water to the water-

scarce city of Perth,

Australia

The treated sewage water was

sent to Australia as ballast

for shipping instead of sea

water, where it was used in

industrial processes instead

of drinking water

Saves energy, reduces waste,

and creates a valuable

international commodity

Image Source: http://www.fastcompany.com/1669912/hitachi-and-schwarzenegger-solutions-for-a-thirsty-planet

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Turning waste into cement

Taiheiyo’s eco-cement

Japan’s largest cement company burns urban waste such as

incinerator ash and sewage sludge during the cement

manufacturing process

The process removes environment-polluting dioxins and

recovers useful metals to create eco-cement

Eco-cement has helped to reduce landfills, prevent the

depletion of natural mineral resources, and reduce air

pollution

Calera’s green cement

Calera combines carbon dioxide with seawater or

groundwater brine to make cement. By turning carbon into

building materials for pavement, the manufacturing process

would be carbon-negative

Viable without subsidies or legislation

Transportation and Mobility

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Asia is facing increasing traffic congestion

The number of vehicles in Asia

is expected to increase from

150 million in 2000 to 350

million by 2020

In the period 2005-2030, more

than half of the world’s

increase in fuel consumption

will come from transportation

In the same period, transport-

related carbon dioxide

emissions are expected to

increase 57%, with developing

Asian countries contributing

80% of the increase

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ERP in Singapore

Electronic Road Pricing

(ERP) charges vehicles for

driving into the city

center during peak transit

hours

Implemented in 1998

Road traffic has decreased

by 25,000 vehicles per day

Average road speed has

increased by 20%

Image Source: US Department of Transportation, http://ops.fhwa.dot.gov/publications/fhwahop08039/cp_prim1_03.htm

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Private Involvement in ERP

Cisco

• The internet business solutions group worked with the Seoul

government to develop a smart transportation pricing engine that

implements "pay as you drive" pricing that reflects real driving distances

and vehicles’ environmental impact rather than flat fees

Steria Asia

• An innovation center in Singapore has produced applications such as

the e-TrafficScan system, which provides drivers with real-time

information about their speeds on major roads

ST Electronics

• The electronic systems house provides a fully automated toll-collection

system, improving traffic flow and increasing driver safety

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Other Business Opportunities

Education and Training

• Businesses can develop

corporate centers to train

employees or set up private

universities

• Other opportunities to engage

local universities to design

specific programs oriented

toward developing

employment skills

• Will increase local worker

quality at a lower cost and

larger scale than sending

people overseas for training

Connectivity and Consumer

Behavior

• By 2011, Asia will contain

more than half of the world’s

mobile connections

• Commercial opportunities for

businesses to embed services

and applications into a variety

of consumer devices like

mobile phones, computers,

and household appliances so

that they can predict and

respond to consumer needs

Development and Preservation

• 280 million urban dwellers in

East and Southeast Asia live in

the slums

• Businesses can attract

workers and consumers to

cities where they have

operations by financing and

developing larger scale

metropolitan projects and

redeveloping existing

neighborhoods to build

residential capacity

Summary

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The future of Asia lies in its

cities

Urban growth in Asia creates

many problems, but also many

business opportunities

Opportunities in the areas of

green buildings, electricity,

water treatment, pollution, and

transportation will continue to

expand as urban populations

increase

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For more information, please see the

Asia Business Council’s website:

www.AsiaBusinessCouncil.org