By Guest Contributor View the original article here
In just one year — from 2020 to 2021 — utility-scale battery storage capacity in the United States tripled, jumping from 1.4 to 4.6 gigawatts (GW), according to the US Energy Information Administration (EIA). Small-scale battery storage has experienced major growth, too. From 2018 to 2019, US capacity increased from 234 to 402 megawatts (MW), mostly in California.
While this progress is impressive, it is just the beginning. The clean energy industry is continuing to deploy significant amounts of storage to deliver a low-carbon future.
Having enough energy storage in the right places will support the massive amount of renewables needed to add to the grid in the coming decades. It could look like large-scale storage projects using batteries or compressed air in underground salt caverns, smaller-scale projects in warehouses and commercial buildings, or batteries at home and in electric vehicles.
A 2021 report by the US Department of Energy’s Solar Futures Study estimates that as much as 1,600 GW of storage could be available by 2050 in a decarbonized grid scenario if solar power ramps up to meet 45 percent of electricity demand as predicted. Currently only 4 percent of US electricity comes from solar.
But for storage to provide all the benefits it can and enable the rapid growth of renewable energy, we need to change the rules of an energy game designed for and dominated by fossil fuels.
Energy storage has big obstacles in its way
We will need to dismantle three significant barriers to deliver a carbon-free energy future.
The first challenge is manufacturing batteries. Existing supply chains are vulnerable and must be strengthened. To establish more resilient supply chains, the United States must reduce its reliance on other countries for key materials, such as China, which currently supplies most of the minerals needed to make batteries. Storage supply chains also will be stronger if the battery industry addresses storage production’s “cradle to grave” social and environmental impacts, from extracting minerals to recycling them at the end of their life.
Second, we need to be able to connect batteries to the power system, but current electric grid interconnection rules are causing massive storage project backlogs. Regional grid operators and state and federal regulatory agencies can do a lot to speed up the connection of projects waiting in line. In 2021, 427 GW of storage was sitting idle in interconnections queues across the country.
You read that right: I applauded the tripling of utility-scale battery storage to 4.6 GW in 2021 at the beginning of this column, but it turns out there was nearly 100 times that amount of storage waiting to be connected. Grid operators can — and must — pick up the pace!
Once battery storage is connected, it must be able to provide all the value it can in energy markets. So the third obstacle to storage is energy markets. Energy markets run by grid operators (called regional transmission organizations, or RTOs) were designed for fossil fuel technologies. They need to change considerably to enable more storage and more renewables. We need new market participation rules that redefine and redesign market products, and all stakeholders have to be on board with proposed changes.
Federal support for storage is growing strong
Despite these formidable challenges, the good news is storage will benefit from new funding and several federal initiatives that will develop projects and programs that advance energy storage and its role in a clean energy transition.
First, the Infrastructure Investment and Jobs Act President Biden signed last year will provide more than $6 billion for demonstration projects and supply chain development, and more than $14 billion for grid improvement that includes storage as an option. The law also requires the Department of Energy (DOE) and the EIA to improve storage reporting, analysis and data, which will increase public awareness of the value of storage. And even more support will be on its way now that President Biden has signed the historic Inflation Reduction Act into law.
Second, the DOE is working to advance storage solutions. The Energy Storage Grand Challenge, which the agency established in 2020, will speed up research, development, manufacturing and deployment of storage technologies by focusing on reducing costs for applications with significant growth potential. These include storage to support grids powered by renewables, as well as storage to support remote communities. It sets a goal for the United States to become a global leader in energy storage by 2030 by focusing on scaling domestic storage technology capabilities to meet growing global demand.
Dedicated actions to deliver this long-term vision include the Long Duration Storage Shot, part of the DOE’s Energy Earthshots Initiative. This initiative focuses on systems that deliver more than 10 hours of storage and aims to reduce the lifecycle costs by 90 percent in one decade.
Third, national labs are driving technology development and much-needed technical assistance, including a focus on social equity. The Pacific Northwest National Laboratory in Richland, Washington, runs the Energy Storage for Social Equity Initiative, which aligns in many respects with the Union of Concerned Scientist’s (UCS) equitable energy storage principles. The lab’s goal is to support energy storage projects in disadvantaged communities that have unreliable energy supplies. This initiative is currently supporting 14 urban, rural and tribal communities across the country to close any technical gaps that may exist as well as support applications for funding. It will provide each community with support tailored to their needs, including identifying metrics to define such local priorities as affordability, resilience and environmental impact, and will broaden community understanding of the relationship between a local electricity system and equity.
Fourth, the Federal Energy Regulatory Commission (FERC) is nudging RTOs to adjust their rules to enable storage technologies to interconnect faster as well as participate fairly and maximize their energy and grid support services. These nudges are coming in the form of FERC orders, which are just the beginning. Implementing the changes dictated by those orders is crucial, but often slow.
States support storage development, too
Significant progress to support energy storage is also happening at the state level.
In Michigan, for example, the Public Service Commission is supporting storage technologies and has issued an order for utilities to submit pilot proposals. My colleagues and I at UCS and other clean energy organizations are making sure these pilots are well-designed and benefit ratepayers.
Thanks to the 2021 Climate and Equitable Jobs Act, Illinois supports utility-scale pilot programs that combine solar and storage. The law also includes regulatory support for a transition from coal to solar by requiring the Illinois Power Agency to procure renewable energy credits from locations that previously generated power from coal, with eligible projects including storage. It also requires the Illinois Commerce Commission to hold a series of workshops on storage to explore policies and programs that support energy storage deployment. The commission’s May 2022 report stresses the role of pilots in advancing energy storage and understanding its benefits.
So far, California has more installed battery storage than any other state. Building on this track record, California is moving ahead and diversifying its storage technology portfolio. In 2021, the California Public Utilities Commission ordered 1 GW of long-duration storage to come online by 2026. To support this goal, California’s 2022–2023 fiscal budget includes $380 million for the California Energy Commission to support long-duration storage technologies. In the long run, California plans to add about 15 GW of energy storage by 2032.
To accelerate their transition to clean energy, other states can look at these examples to help shape their own path for energy storage. Illinois’ 2021 law especially provides a realistic blueprint for other Midwestern states to tackle climate change and deliver a carbon-free energy future.
Energy storage is here, so let’s make it work
Storage will enable the growth of renewables and, in turn, lead to a sustainable energy future. And, as I have pointed out, there has been significant progress, and the future looks promising. Federal initiatives are already helping to advance storage technologies, reduce their costs, and get them deployed. Similarly, some states are supporting this momentum.
That said, more work will be needed to remove the barriers I described above, and for that to happen, the to-do list is clear. The battery industry needs to develop responsible, sustainable supply chains, FERC needs to revamp interconnection rules to support faster deployment, and regional grid operators need to reform energy markets so storage adds value to a clean grid. My colleagues and I at UCS are working to ensure all that happens.
US President Joe Biden signed the Inflation Reduction Act yesterday, bringing with it tax incentives and other measures widely expected to significantly boost prospects for energy storage deployment.
“The Inflation Reduction Act invests US$369 billion to take the most aggressive action ever — ever, ever, ever — in confronting the climate crisis and strengthening our economic — our energy security,” Biden said.
The legislation was readied for Biden’s signature at a speed which took many by surprise, from the announcement of compromises being reached by West Virginia Senator Joe Manchin and Senate Majority Leader Chuck Schumer at the end of July, to its quick passing in the Senate and then the House of Representatives in just over a fortnight.
Its investment in energy security and climate change mitigation targets a 40% reduction in greenhouse gas (GHG) levels by 2030, supporting electric vehicles (EVs), energy efficiency and building electrification, wind, solar PV, green hydrogen, battery storage and other technologies.
Most directly relevant to the downstream energy storage industry is the introduction of an investment tax credit (ITC) for standalone energy storage. That can lower the capital cost of equipment by about 30%, although under some prevailing conditions it will be more or less, depending on, for example, use of local unionised labour.
It also unties developers from pursuing a disproportionately high percentage of solar-plus-storage hybrid projects, since prior to the act, batteries were eligible for the ITC, but only if they charged directly from the solar for at least 70% of every year in operation. The industry has campaigned for the standalone ITC for many years.
For the upstream battery and energy storage system value chains, there are also tax incentives for siting production within the US, as there are for wind and solar PV equipment manufacturers that source components or make their products domestically.
There are also 10-year extensions to existing wind and solar ITCs along with new or extended clean energy production tax credits (PTCs) and the ITC for solar goes up from 26% to 30%, while the standalone storage ITC will also be in place for the next decade.
There are also provisions that community solar installations where at least 50% of customers live in low to moderate income communities can prevail of an extra 20% ITC, and an extra 10% ITC for projects built with at least 40% domestic content, rising to a 55% threshold in 2027.
Interconnection costs are also included in ITC-eligible project costs.
Incentives will scale down by small increments every couple of years but could be further extended if targeted emissions reductions are not achieved in that timeframe.
As might be expected, many companies and commentators across the industry had plenty to say on the act becoming law with the stroke of Biden’s pen. Here are a few of their comments:
American Clean Power Association
National trade association representing clean energy companies, since last year merged with the national Energy Storage Association
“This does for climate change and clean energy what the creation of Social Security did for America’s senior citizens. This law will put millions more Americans to work, ensure clean, renewable and reliable domestic energy is powering every American home, and save American consumers money.
For our industry, it’s the starting gun for a period of regulatory certainty which will triple the size of the US clean energy industry and generate over US$900 billion in economic activity through construction of new clean energy projects,” Heather Zichal, CEO.
Provider of standalone storage and solar-plus-storage solutions to behind-the-meter commercial and industrial (C&I) and distributed front-of-meter market segments
“…we view the investments in clean energy within the Inflation Reduction Act as transformational for our country, the energy industry, and our company as we continue to accelerate the clean energy transition.
For customers deploying energy storage and solar, the most significant parts of the bill are tax credits for clean electricity investment and production. We anticipate that these incentives will increase investment certainty and make adoption more affordable in existing and new energy markets,” John Carrington, CEO
Trade association representing technology providers and large end-users for long-duration energy storage (LDES)
“The passing of the landmark Inflation Reduction Act is a critical win for long-duration energy storage technologies. This historical act enables energy storage to accelerate to the scale we need by levelling the playing field for all types of storage. LDES improves grid reliability, resiliency, and flexibility around renewable energy sources like wind and solar, and has the ability to standalone [sic] and contribute increased stability to the grid,” Julia Souder, executive director.
US-based provider of vanadium redox flow battery (VRFB) solutions
“Stryten Energy welcomes this legislation’s long-term, standalone energy storage investment tax credits and its ten-year runway, which will help our customers incorporate medium and long-duration energy storage such as VFRB batteries into their operations more economically than before.
Leveraging domestic VFRB technology and other long-term energy storage solutions will enable reliable access to clean power and help the U.S. achieve energy security as it transitions to a clean energy economy,” Tim Vargo, CEO.
Manufacturer of battery cells, racks and complete systems, serving the energy storage system (ESS) and electric mobility infrastructure sectors
“The clean energy provisions in the Act prioritise scaling the domestic clean energy ecosystem, renewing our focus on raw material production and manufacturing, and catalysing the maturation of the nation’s domestic supply chain. It will position domestic suppliers to meet the demands of decarbonisation in the energy and transportation sectors.
As a lithium-ion battery cell manufacturer building a gigafactory outside Phoenix, we look forward to accelerating the growth of an end-to-end battery supply chain by delivering American IP built by American workers with recyclable North American materials to power e-mobility and energy storage solutions.
As a partner to suppliers, end users, and recyclers, we are most excited that the Act will expand access to the jobs needed to realize these goals and will rapidly expand the benefits that modern electrification and energy storage offer our economy, our customers and communities,” Lyndsay Gorrill, CEO.
International Zinc Association
Trade association representing zinc production and related companies, including a subsidiary trade group, Zinc Battery Initiative
“The International Zinc Association (IZA) applauds the passage of the Inflation Reduction Act of 2022 for bringing critical focus and funding to the cleantech space. This unprecedented climate legislation will promote the production of critical minerals required for batteries as well as the manufacture and purchase of energy storage, such as rechargeable zinc batteries. IZA members are proud to provide safe, sustainable options for the energy storage industries, an essential part of the clean energy transition,” Andrew Green, executive director.
Center for Sustainable Energy
National clean energy non-profit group
“These tax credits and incentives will spur increased manufacturing and adoption of clean technologies by all Americans, including people with low and moderate incomes and communities that have borne the brunt of pollution. We’re investing in climate solutions – including energy-efficient, all-electric homes; rooftop solar; energy storage; and electric vehicles,” Lawrence Goldenhersh, president.
Provider of mission-critical air and gas handling products
“The very generous tax credits, up to US$3/kg for 10 years, will make the renewable H2 produced in the US the cheapest form of hydrogen in the world.
“There is no doubt that this step will accelerate progress in the global hydrogen market, and more and more countries and organisations will now start speeding up their plans to become major players in this growing sector,” Salah Mahdy, global director of renewable hydrogen.
No doubt, there will be much more to follow on this topic…
Urban activities — think construction, transportation, heating, cooling and more — are major sources of greenhouse-gas emissions. Today, a growing number of cities are striving to slash their emission to net zero — here’s what they need to do.
By: Deepa Padmanaban View the original article here
Global temperatures are on the rise — up by 1.1 degrees Celsius since the preindustrial era and expected to continue inching higher — with dire consequences for people and wildlife such as intense floods, cyclones and heat waves. To curb disaster, experts urge restricting temperature rise to 1.5 degrees, which would mean cutting greenhouse gas emissions, by 2050, to net zero — when the amount of greenhouse gases emitted into the atmosphere equals the amount that’s removed.
More than 800 cities around the world, from Mumbai to Denver, have pledged to halve their carbon emissions by 2030 and to reach net zero by 2050. These are crucial contributions, because cities are responsible for 71 percent to 76 percent of global carbon dioxide emissions due to buildings, transportation, heating, cooling and more. And the proportion of people living in cities is projected to increase, such that an estimated 68 percent of the world’s population will be city dwellers by 2050.
“Urban areas play a vital role in climate change mitigation due to the long lifespans of buildings and transportation infrastructures,” write the authors of a 2021 article on net-zero cities in the Annual Review of Environment and Resources. Are cities built densely, or do they sprawl? Do citizens drive everywhere in private cars, or do they use efficient, green public transportation? How do they heat their homes or cook their food? Such factors profoundly affect a city’s carbon emissions, says review coauthor Anu Ramaswami, a professor of civil and environmental engineering and India studies at Princeton University.
Ramaswami has decades of experience in the area of urban infrastructure — buildings, transport, energy, water, waste management and green infrastructure — and has helped cities in the United States, China and India plan for urban sustainability. For cities to get to net zero, she tells Knowable, the changes must touch myriad aspects of city life. This conversation has been edited for length and clarity.
Why are the efforts of cities important? What part do they play in emissions reductions?
Cities are where the majority of the population lives. Also, 90 percent of global GDP (gross domestic product) is generated in urban areas. All the essential infrastructure needed for a human settlement — energy, transport, water, shelter, food, construction materials, green and public spaces, waste management — come together in urban areas.
So there’s an opportunity to transform these systems.
You can think about getting to net zero from a supply-side perspective — using renewable, or green, energy for power supply and transport — which is what I think dominates the conversation. But to get to net zero, you need to also shape the demand, or consumption, side: reduce the demand for energy. But we haven’t done enough research to understand what policies and urban designs help reduce demand in cities. Most national plans focus largely on the supply side.
You also need to devise ways to create carbon sinks: that is, remove carbon from the atmosphere to help offset the greenhouse gas emissions from burning fossil fuels.
These three — renewable energy supply, demand reduction through efficient urban design and lifestyle changes, and carbon sinks — are the broad strategies to get to net zero.
How can a city tackle demand?
Reducing demand for energy can be through efficiency — using less energy for the same services. This can be done through better land-use planning, and through behavior and lifestyle changes.
Transportation is a great example. So much energy is spent in moving people, and most of that personal mobility happens in cities. But better urban planning can reduce vehicle travel substantially. Mitigating sprawl is one of the biggest ways to reduce demand for travel and thus reduce travel emissions. In India, for example, Ahmedabad has planned better to reduce urban sprawl, compared to Bangalore, where sprawl is huge.
Well-designed, dynamic ride sharing, like the Uber and Lyft pools in the US, can reduce total vehicle miles by 20 or 30 percent, but you need the right policies to prevent empty vehicles from driving around and waiting to pick up people, which can actually increase travel. These are big reductions on the demand side. And then you add public transit and walkable neighborhoods.
Electrification of transportation — the supply side — is important. But if you only think about vehicle electrification, you’re missing the opportunity of efficiency.
Your review talks about the need to move to electric heating and cooking. Why is that important?
There’s a lot of emphasis on increasing efficiency of devices and systems to reduce these big sources of energy use, and thus emissions — heating, transport and cooking. But to get to net zero, you also have to change the way you provide heating, transport and cooking. And in most cities, heating and cooking involve the direct use of fossil fuels.
For example, house heating is a big thing in cold climates. Right now, we use natural gas or fuel oil for heating in the US, which is a problem because they are fossil fuels that release greenhouse gases when they are burned. With many electric utilities pledging to reduce the emissions form power generation to near-zero, cities could electrify heating so that the heating system is free of greenhouse gas emissions.
Cooking is another one. Some cities in the US, like New York City and others in California, have adopted policies that restrict natural gas infrastructure for cooking in new public buildings and neighborhood developments, thereby promoting electric cooking. Electrifying cooking enables it to be carbon-emissions-free if the source of the electricity is net zero-emitting.
Many strategies require behavior change from citizens and public and private sectors — such as moving from gasoline-powered vehicles to lower-emission vehicles and public transport. How can cities encourage such behaviors?
Cities can offer free parking for electric vehicles. For venues that are very popular, they’ll offer electric vehicle charging, and parking right up front. But more than private vehicles, cities have leverage on public vehicles and taxi fleets. Many cities are focusing on changing their buses to electric. In Australia, Canberra is on track to convert their entire public transit fleet to electric buses. That makes people aware, because the lack of noise and lack of pollution is very noticeable, and beneficial.
The Indian government is also offering subsidies for electric scooters. And some cities across the world are allowing green taxis to go to the head of the line. Another incentive is subsidies: The US was offering tax credits for buying electric cars, for example, and some companies subsidize car-pooling, walking or transit. At Princeton, if I don’t drive to campus, I get some money back.
The main thing is to reduce private motorized mobility, get buses to be electric and nudge people into active mobility — walking, biking — or public transit.
How well are cities tackling the move to net zero?
Cities are making plans in readiness. In New York City, as I mentioned, newly built public housing will have electric cooking and many cities in California have adopted similar policies for electric cooking.
In terms of mobility, California has among the world’s largest electric vehicle ownership. In India, Ola, a cab company similar to Uber, has made a pledge to electrify its fleet. The Indian government has set targets for electrifying its vehicle sector, but then cities have to think about where to put charging stations.
A lot of cities have been doing low carbon transitions, with mixed success. Low carbon means reducing carbon by 10 to 20 percent. Most of them focus entirely on efficiency and energy conservation and will rely on the grid decarbonizing, but that’s just not fast enough to get you to net zero by 2050. I showed in one of my papers that even in the best case, cities would reduce carbon emissions by about 1 percent per year. Which isn’t bad, but in 45 years, you get about a 45 percent reduction, and you need 80-plus percent to get to net zero. That means eliminating gas/fossil fuel use in mobility, heating and cooking, and creating construction materials that either do not emit carbon during manufacturing or might even absorb or store carbon.
That’s the systemic change that is going to contribute to getting to net zero, which we define in our Annual Review of Environment and Resources paper as at least 80 percent reduction. The remaining 20 percent could be saved through strategies to capture and store carbon dioxide from the air, such as through tree-planting, although the long-term persistence of the trees is highly uncertain.
Are there notable case studies of cities you could discuss?
Denver has been covering the most sectors. Some cities cover only transportation and energy use in buildings, but Denver really quantified additional sectors. They even measured the energy that goes into creating construction materials, which is another thing the net zero community needs to think about. Net zero is not only about what goes on inside your city. It is also about the carbon embodied in materials that you bring into your city and what you export from your city.
Denver was keeping track of how much cement was being used, how much carbon dioxide was needed to produce that cement, called embodied carbon; what emissions were coming from cars, trucks, SUVs and energy use in buildings. They measured all of this before they did any interventions.
The city has also done a great job of transitioning from low-carbon goals (for example, a 10 percent reduction in a five-year span) to deep decarbonization goals of reducing emissions by 80 percent by 2050. During their first phase of low-carbon planning back in 2010, they counted the impact of various actions in each of these sectors to reduce greenhouse gas emissions by 10 percent below 1990 baselines, through building efficiency measures, energy efficiency and promotion of transit, and were successful in meeting their early goals.
Denver is also a very good example of how to keep track of interventions and show that it met its goals. If the city did an energy efficiency campaign, it kept track of how many houses were reached, and what sort of mitigation happened as a result.
But they realized that they’re never going to get down to net zero because, while efficiency and conservation reduce gas use for heating and gasoline use for travel, it cannot get them to be zero. So in 2018, they decided that they’re now going to do more systemic changes to try to reduce emissions by 80 percent by 2050, and monitor them the same way. This includes systemic shifts to heating via electric heat pumps and shifting to electric cars as the electric grid also decarbonizes.
So it’s counting activities again: How many electric vehicles are there? How many heat pumps are you putting into the houses that can be driven by electricity rather than by burning gas? How many people adopt these measures? What’s the impact of adoption?
What you’re saying is that this accounting before and after an intervention is put in place is very important. Is it very challenging for cities to do this kind of accounting?
It’s like an institutional habit — like going to the doctor for a checkup every two years or something. Someone in the city has to be charged with doing the counting, and so many times, I think it just falls off the radar. That was what was nice about Denver — and we worked with them, gave them a spreadsheet to track all these activities.
Though very few cities have done before and after, Denver is not the only one. There are 15 other cities showcased by ICLEI, an organization that works with cities to transition to green energy.
I have worked with ICLEI-USA to develop protocols on how to report and measure carbon emissions. One of the key questions is: What sectors are we tracking and decarbonizing? As I mentioned at the start, most cities agree with tackling energy use in transportation and building operations, and greenhouse emissions from waste management and wastewater. ICLEI has been a leader in developing accounting protocols, but cities and researchers are realizing that cities can do more to address construction materials — for example, influencing choice between cement and timber, which may even store carbon in cities over the long term.
I serve on ICLEI-USA’s advisory committee for updating city carbon emission measurement protocols, and I recommend that cities also consider carbon embodied in construction materials and food, so that they can take action on these sectors as well.
But we don’t have the right tools yet to quantify all the major sectors and all the pathways to net zero that a city can contribute to. That’s the next step in research: ways to quantify all those things, for a city. We are developing those tools in a zero-carbon calculator for cities.
Thanks to climate change, sea levels are lapping up against coastal cities and communities. In an ideal world, efforts would have already been made to slow or stop the impact. The reality is that climate mitigation remains difficult, and the 40% of humanity living within 60 miles of a coast will eventually need to adapt.
One option is to move inland. A less obvious option is to move offshore, onto a floating city.
It sounds like a fantasy, but it could real, later if not sooner. Last year, Busan, South Korea’s second-largest city, signed on to host a prototype for the world’s first floating city. In April, Oceanix Inc., the company leading the project, unveiled a blueprint.
It sounds like a fantasy, but it could real, later if not sooner. Last year, Busan, South Korea’s second-largest city, signed on to host a prototype for the world’s first floating city. In April, Oceanix Inc., the company leading the project, unveiled a blueprint.
Representatives of SAMOO Architects & Engineers Co., one of the floating city’s designers and a subsidiary of the gigantic Samsung Electronics Co., estimate that construction could start in a “year or two,” though they concede the schedule might be aggressive. “It’s inevitable,” Itai Madamombe, co-founder of Oceanix, told me over tea in Busan. “We will get to a point one day where a lot of people are living on water.”
If she’s right, the suite of technologies being developed for Oceanix Busan, as the floating city is known, will serve as the foundation for an entirely new and sustainable industry devoted to coastal climate adaptation. Busan, one of the world’s great maritime hubs, is betting she’s right.
A Prototype for Atlantis
Humans have dreamed of floating cities for millenniums. Plato wrote of Atlantis; Kevin Costner made Waterworld. In the real world, efforts to build on water date back centuries.
The Uru people in Peru have long built and lived upon floating islands in Lake Titicaca. In Amsterdam, a city in which houseboats have a centuries-long presence, a handful of sustainably minded residents live on Schoonschip, a small floating neighborhood, completed in 2020.
Madamombe began thinking about floating cities after she left her role as a senior adviser to then-UN Secretary General Ban Ki-Moon. The New York-based native of Zimbabwe had worked in a variety of UN roles over more than a decade, including a senior position overseeing partnerships to advance the UN’s Sustainable Development Goals. After leaving, she maintained a strong interest in climate change and the risks of sea-level rise.
Her co-founder at Oceanix, Marc Collins, an engineer and former tourism minister for French Polynesia, had been looking at floating infrastructure to mitigate sea-level risks for coastal areas like Tahiti. An autonomous floating-city industry seemed like a good way to tackle those issues. Oceanix was founded in 2018.
As we sit across the street from the lapping waves of Busan’s Gwangalli Beach, Madamombe concedes that they didn’t really have a business plan. But they did have her expertise in putting together complex, multi-stakeholder projects at the UN.
In 2019, Oceanix co-convened a roundtable on floating cities with the United Nations Human Settlements Program — or UN-Habitat — the Massachusetts Institute of Technology Center for Ocean Engineering and the renowned architectural firm Bjarke Ingels Group (better known as BIG). “The UN said there’s this new industry that’s coming up, it’s interesting,” Madamombe said. “They wanted to be able to shape the direction that it took and to have it anchored in sustainability.”
At the Oceanix roundtable, BIG unveiled a futuristic, autonomous floating city composed of clusters of connected, floating platforms designed to generate their own energy and food, recycle their own wastes, assist in the regeneration of marine life like corals, and house thousands.
The plan was conceptual, but the meeting concluded with an agreement between the attending parties, including UN-Habitat: Build a prototype with a collaborating host government. Meanwhile, Oceanix attracted early financial backers, including the venture firm Prime Movers Lab LLC.
Busan, home of the world’s sixth-busiest port, and a global logistics and shipbuilding hub, quickly emerged as a logical partner and location for the city. “The marine engineering capability is incredible,” Madamombe tells me. “Endless companies building ships, naval architecture. We want to work with the local talent.”
Busan’s mayor, Park Heong-joon, who is interested in promoting Busan as a hub for maritime innovation, shared the enthusiasm and embraced the politically risky project as he headed into an election. An updated prototype was unveiled at the UN in April 2022.
Concrete Platforms, Moored to the Seafloor
The offices of SAMOO, the Korean design firm that serves as a local lead on Oceanix Busan, are located high above Seoul. On a recent Monday morning, I met with three members of the team that’s worked closely with BIG, as well as local design, engineering and construction firms, to bring the floating city to life.
Subsidiaries of Samsung don’t take on projects that can’t be completed, and SAMOO wants me to understand that they’re convinced this project is doable. They also want me to understand that it’s important.
“Frankly, it’s not the floating-city concept we were interested in, but the fact that it’s sustainable,” says Alex Sangwoo Hahn, a senior architect on the project.
Floating infrastructure is nothing new in Korea. Sebitseom, a cluster of three floating islands in Seoul’s Han River, were completed in 2009 and are home to an event center, restaurants and other recreational facilities.
But they are not autonomous or sustainable, and they were not built to house thousands of people safely. Built from steel, they are likely to last years. But corrosion and maintenance will eventually be an issue.
Oceanix Busan must be more durable and stable. Current plans place it atop three five-acre concrete platforms that are moored to the seafloor, with an expected life span of 80 years. The platforms will be 10 meters deep, with only two meters poking above the surface. Within the platforms will be a vast space designed to hold everything from batteries to waste-management systems to mechanical equipment.
That’s a lot of space, but the design and engineering teams are learning that there’s never enough room to do everything. For example, indoor farming — an aspiration at Oceanix — requires large amounts of energy that must be devoted to other goals.
Dr. Sung Min Yang, the project manager on Oceanix Busan and an associate principal at SAMOO, acknowledges that — for now — the floating city won’t meet all its aspirations. “We hoped to be net positive with energy, we would recycle everything and not have any waste going out,” he says. “Now we are striving for net zero, but we are also looking at a backup connection to the mainland for electricity and wastewater.
Madamombe, who spends much of her time working out differences between the various teams involved in the project, isn’t bothered that some of the initial vision must be reined in. She recounts a piece of advice she received from advisers from the MIT Center for Ocean Engineering: “Don’t try to prove everything.” She shrugs. “If we grow 50% of our food and bring 50% in, will it be a great success?” she asks. “Yes, it would be. It’s a city!”
That wouldn’t be the only success. Creating three massive floating concrete platforms that can safely support multi-story buildings while recycling the wastes of residents (including water) would be a major technological advance, and one that Oceanix says that it — and its partners — can pull off, and profitably market. In time, the technologies will improve, becoming more autonomous and sustainable, in line with Oceanix’s earliest aspirations.
But first a prototype must be built. SAMOO estimates that constructing the first floating platforms will require two to three years as the contractors and engineers work out the techniques. Even under the best of circumstances, construction won’t start until next year at the earliest, putting completion — aggressively — mid-decade.
Costs are also daunting. Estimates for this first phase of Oceanix Busan range as high as $200 million and — so far — that funding hasn’t been secured. That will require private fundraising, including in Korea.
Madamombe says Busan will “help raise money by backing the project and making introductions,” not by contributions. But the slow ramp-up isn’t dissuading anyone. According to SAMOO, multiple Korean shipbuilding companies are interested in the project.
It’s a Start
Visionaries have long dreamed of floating cities that are politically autonomous, as well as resource autonomous. One day, that dream might be achieved. But for now, Oceanix is about developing technologies that help coastal communities adapt to climate change and persist as communities.
To do that, Oceanix Busan will be directly connected to Busan by a roughly 260-foot bridge. Rather than function as an autonomous city, it will instead function as a kind of neighborhood under the full administrative jurisdiction of Busan city hall.
Of course, three platforms and 12,000 planned residents and visitors won’t be enough to save Busan from climate change. Neither will the additional platforms that Oceanix hopes to see built and connected to the first three in coming years.
But it’s a start that can serve as a model and inspiration for other communities hoping to adapt to sea-level changes, rather than just respond to them. After all, disaster assistance and sea walls are expensive and require intensive planning, too.
Long term, humanity will need to learn to live with rising sea levels. Floating cities will be one way for coastal communities to do it.
Over the past few years, several startups have released one-off solar-powered concept vehicles, but up until now, we have yet to receive a mass-produced solar-powered car. It looks like that will change soon with the introduction of the Lightyear 0—an electric sedan that gets its power from the sun.
Lightyear is a Dutch startup that has an ambitious goal to start production of the Lightyear 0 this fall with the first deliveries starting in November. The Lightyear 0 features 5 square meters of double-curved solar arrays that can charge the electric vehicle while it’s driving or parked outdoors. The solar panels can add up to 43 miles (70 kilometers) of range a day in addition to its estimated 388 miles (625 kilometers) on Europe’s WLTP cycle.
This means drivers can literally drive for months without having to use an outlet or public charger. Lightyear estimates people who drive an average daily commute of about 22 miles, could go up to seven months between charges. Lightyear estimates the solar panels can add up to 6,835 miles (11,000 kilometers) of range per year.
“Today is the day we’ve all been waiting for since us five co-founders sat in a kitchen sketching out our dream of building the most sustainable car on the planet,” says Lightyear co-founder and CEO Lex Hoefsloot. “In 2016, we only had an idea; three years later, we had a prototype. Now, after six years of testing, iterating, (re)designing, and countless obstacles, Lightyear 0 is proof that the impossible is actually possible.”
In addition to its groundbreaking solar panels, the Lightyear 0 also stands out from current EVs with its four in-wheel motors. The electric motors generate a combined 174 horsepower and 1,269 pound-feet of torque, which can accelerate the Lightyear 0 from 0-62 mph in 10 seconds and a top speed of 100 mph.
With an energy use of 10.5 kWh per 62 miles (100 kilometers), Lightyear says it is the most efficient electric vehicle and its drag coefficient of less than 0.19 makes it the most aerodynamic family car yet. Although the Lightyear 0 is more than 16.4 feet long, it only weighs 3,472 pounds.
Inside the Lightyear 0 focuses on sustainability and minimalism with naturally-sourced and vegan materials, like microfiber suede seats and rattan palm detailing. Its interior also features a 10.1-inch touchscreen infotainment system that runs the Android Auto operating system.
Hoefsloot said in a statement that the Lightyear 0 is unique from electric vehicles: “Electric cars are a step in the right direction, but they have a scaling problem. By 2030, we can expect 84 million electric vehicles (EVs) on roads in Europe alone. There’s no hiding from it, access to charging stations will not keep up with the demand for electric cars. To minimize plug-charging and maximize range, the industry’s strategy, so far, has been to add batteries. That increases the carbon footprint of production and, in turn, boosts weight and the need for high-power charging stations. Our strategy flips that approach. Lightyear 0 delivers more range with less battery, reducing weight and CO₂ emissions per vehicle.”
The company only plans to build 946 Lightyear 0 vehicles a year. It hasn’t announced the market distribution.
The Lightyear 0 is definitely not cheap with a starting price of €250,000 ($263,243 USD), which means accessibility will be a barrier to entry for most consumers. The good news is the company is also working on a second model that will better appeal to the mass market with its €30,000 ($31,589 USD) starting price. Production of its second EV will begin in late 2024 or early 2025.
There’s still much to be seen with the Lightyear 0. While the most sustainable way to view car ownership is to not own a car, the reality is many people need vehicles in their day-to-day lives and Lightyear’s concepts spotlight innovation in the car space.
By Bloomberg Cities Network View the original article here
As gas prices surge past $5 a gallon and the global climate crisis deepens, city leaders stand on the front lines of America’s transition to more sustainable and affordable transportation options.
Cities are taking bold steps to accelerate the changeover to electric vehicles (EVs), using their purchasing power to prime new markets for electrified cars, trucks, buses, and bikes, and making it easier for residents to make the switch. Leading the way are 25 cities who received support and resources from Bloomberg Philanthropies’ network of partners while participating in the American Cities Climate Challenge.
Mayors in these cities increasingly see transforming transportation as critical to delivering results for residents when it comes to sustainability, equity, and public health. The transportation sector is the single largest source of carbon emissions in the United States. It’s also a driver of air pollution and respiratory conditions such as asthma that disproportionately impact people of color and low-income households. On both fronts, electric vehicles offer benefits over models that run on fossil fuels.
“We can’t afford to wait for someone else to take the kind of bold action on climate change we need to protect our community,” Albuquerque, N.M., Mayor Tim Keller said while announcing his city’s first purchase of EVs for the municipal fleet. “Any realistic effort to fight climate change has to include steps to reduce the impact of vehicles on our air quality and public health…and the time has come to turn the page on gas-powered cars and trucks.”
With billions of federal infrastructure dollars available to supercharge this transition, local leaders will have an even bigger role to play in the years ahead. Cities that want help navigating federal infrastructure funding opportunities can sign up for supports through the Local Infrastructure Hub, a new initiative of Bloomberg Philanthropies and its partners.
Here are four ways that the 25 cities that participated in the American Cities Climate Challenge are driving innovation with electric vehicles—using data, resident engagement, and collaboration to make a lasting impact.
1. Establishing community car sharing programs and charging stations
Car-sharing programs have already shown that they can save participating households thousands of dollars and take cars off the street. Now, cities are electrifying these car-sharing programs, expanding access to both EVs and places to charge them, particularly for traditionally underserved communities.
St. Paul, Minn., for example, launched the largest publicly owned, renewably powered, electric car-sharing program in the nation, Evie Carshare, with 100 EVs currently operating and plans to grow the fleet to 173. Equitable access was a major factor in determining the pricing structure and charging locations. The program design was informed by a prototyping process with residents and, to make it affordable to all, Evie Carshare includes a discounted membership rate for people with low incomes. Car-share locations also include spots where anyone with an EV can charge up, effectively boosting the number of public EV charging ports in the city by 70 percent.
Similarly, Boston partnered with E4TheFuture and the Massachusetts Clean Energy Center for the launch of the EV car sharing program Good2Go. It’s an income-tiered service with a focus on equity that enables qualifying residents to pay as little as $5 per hour to use a vehicle. Meanwhile, St. Louis is piloting a program for social services agencies to share EVs in order to shuttle seniors to medical appointments and to deliver meals. The agencies are seeing savings in reduced fuel costs, freeing up resources for other services.
2. Electrifying municipal fleets
City leaders also are looking at their own fleets of vehicles as a big opportunity to reduce carbon emissions, cut fuel and maintenance expenses, and lead by example. Across the American Cities Climate Challenge, 22 cities have already purchased more than 1,300 electric vehicles and have made plans to purchase dramatically more in the years ahead.
St. Louis, for example, started by adding four new EVs to its municipal fleet, and plans to acquire at least eight more in the coming months. Each vehicle is labeled “Zero Emissions 100% Electric” with eye-catching green streaks on the side, to promote the change with residents. For the long term, an executive order requires city agencies to continue prioritizing the purchase of low- and no-emission vehicles to keep the municipal fleet transition going.
Albuquerque has likewise committed to a 100-percent clean light-duty fleet, meaning that any eligible pickup truck and passenger vehicle purchased from now on will be an electric, hybrid, or alternative-fuel vehicle. Meanwhile, Boston added a new kind of vehicle to its municipal fleet: an electric-assist cargo tricycle. City leaders are testing it to see if employees would be willing to use the e-bike for work-related trips instead of a car or truck.
3. Electrifying public transit
City buses are a ripe target for electrification. Compared with existing diesel models, electric buses significantly reduce air pollution, make less noise, lower maintenance and operating expenses, and can deliver a more comfortable experience for passengers.
Honolulu is looking to leverage all of those benefits as part of an effort to make public transit a more attractive option for residents. In addition to building its first dedicated bus lane since 1988, the city has incorporated 17 fully electric buses into its service routes. It’s also installed a charging system to support the process of transitioning 100 percent of the city’s bus fleet to fully electric by 2035. These zero-emission electric buses are not only providing cleaner transportation, but they are notably quieter, to the enjoyment of passengers and residents.
In Charlotte, N.C., the city council approved a groundbreaking approach to overcome initial hesitation about upfront costs of transitioning to electric buses. A pilot program enables the city to try out—and train staff on—18 electric buses and charging infrastructure from various manufacturers in order to collect data on what works. The program is an important first step in the city’s mission to reach net-zero emissions targets and has the potential to be a model for other cities.
4.Requiring new buildings to be ready for EV charging infrastructure
For EV owners, more than 80 percent of their vehicle charging occurs at home. But workplaces are also a popular place to charge. That’s why a number of cities are requiring newly constructed residential and commercial buildings to design-in the ability to scale up future EV charging infrastructure. Doing so up front adds less than 0.2 percent to construction costs, while sparing much higher costs associated with retrofitting buildings later.
Through its new EV Ready code, Orlando, Fla., is now requiring all new buildings and major remodel projects to integrate EV charging infrastructure. Specifically, the ordinance requires 20 percent of multi-family, hotel, and parking structure spaces and 10 percent of non-residential parking spaces to be EV-capable, which requires installing dedicated electrical capacity and conduit to parking spaces. By starting with community engagement workshops and then collaborating with developers and EV-industry stakeholders, city leaders garnered support needed to pass this ordinance, a major milestone in achieving its sustainability goal of reducing greenhouse-gas emissions 90 percent by 2040. Similar EV-readiness ordinances recently passed in Boston, Columbus, Ohio, Charlotte, St. Louis, and Pittsburgh.
Environmental, social and corporate governance (“ESG”) practices are becoming an increasingly significant topic for businesses and a vital investment criterion for real estate capital sources. Increases in the frequency and intensity of severe-weather-related events are forcing companies to assess property vulnerability and resiliency to proactively manage risk and mitigate the effects of climate change. A company’s corporate social responsibility is just as important because it draws attention to community outreach and talent development. Furthermore, with proper governance in place, management can implement and assess its policies, goals and reporting efforts for their ESG initiatives. Due to these compounding matters, real estate companies now have an increasing responsibility to perform climate-risk due diligence; assess its corporate social responsibility initiatives; and develop, implement and govern its ESG policies. As a result, investors and lenders are beginning to factor a company’s ESG policies into their decision-making processes because they want to ensure the business is developing sustainable plans to combat the effects of climate change; reduce costs; attract tenants; create ways to support the community; retain talent; and properly set, monitor and report on the company’s goals. What exactly is ESG, and how does it influence investor and lender decisions within the real estate sector?
The environmental aspect of ESG represents management’s responsibility to assess each property’s vulnerabilities, resilience and fortification with respect to its climate and to investigate the environmental impact of operating its properties. While reviewing or developing a building portfolio, it is crucial for management to perform an environmental analysis of each property to determine each building’s vulnerability and/or resistance to severe weather (e.g., hurricanes, flooding, extreme heat or cold, wildfires, tornadoes, blizzards) as well as to consider the environmental and community impacts associated with property development.
Using a variety of tools, management can establish and track key environmental factors associated with property development and operations, including the amount of energy used, the usage and/or possible contamination of water, the amount of waste generated and/or avoided in favor of recycling initiatives, and the building’s impact on air quality and the surrounding ecosystem. By evaluating a property’s environmental impacts, companies can be proactive about mitigating risk and assuring proper protocols are in place—not to mention saving money.
Management also should consider weather forecast predictions and climate migration trends in its analysis because climate change poses both physical and transitional risks that can have a substantial financial impact on a real estate business. As outlined in “Climate Risk and Real Estate Investment Decision-Making,” an article published by Urban Land Institute, “Physical risks, such as catastrophes, can lead to increased insurance premiums, higher capital expenditure and operational costs, and a decrease in the liquidity and value of buildings. Transitional risks—which center on the economic, political and societal responses to climate change—can see locations and even entire metropolitan areas become less appealing because of climate-change-related events, leading to the potential for individual assets to become obsolete.” Accordingly, climate migration presents a legitimate concern to real estate investors because climate relocation will lead to significant shifts in demand for real estate as individuals respond to environmental changes.
ESG initiatives are gaining significant attention among regulators and the Biden administration due to a rise in the necessity of, and public interest in, sustainability. In January 2022, the Biden administration launched a coalition of states and local governments to strengthen building performance standards. This partnership, consisting of 33 state and local governments, focuses on providing “cleaner, healthier and more affordable buildings.” The new commitments to design and implement more efficient building performance standards are intended to “accelerate progress toward reducing buildings emissions, advance climate action and environmental justice, create good-paying union jobs, lower energy bills for consumers, keep residents and workers safe from harmful pollution, and cut emissions from the building sector.” Property owners and operators must closely follow the developments of these governmental policies to stay current with their ESG initiatives.
Additionally, as part of the government’s initiative to strengthen building performance standards, the Department of Energy (“DOE”) and the Environmental Protection Agency (“EPA”) announced technical assistance opportunities to design, measure and manage local building-performance policies. For example, the “Biden-Harris Administration Launches Coalition of States and Local Governments to Strengthen Building Performance Standards Whitehouse Statement” outlines the following:
The DOE will share best practices for state and local governments that are adopting building performance standards, including public- and private-sector financing options, and will also provide analytical support to examine how policies targeting emissions reductions in existing buildings can pave the way for minimum new-construction building energy codes.
There will be enhanced support from the EPA Climate Protection Partnerships Division. The EPA will support policy development and implementation, including through analysis and recommendations of metrics and best practice toolkits. The EPA will provide insight into current building energy use data as the foundation for jurisdiction-specific analysis and target setting and will enhance ENERGY STAR Portfolio Manager to provide new policy tracking and reporting capability and will assist jurisdictions in its use. The EPA will also provide new tools that calculate localized greenhouse gas emissions to inform reporting, compliance and assessment.
High-performing buildings are not only good for the environment, but they are also good for the bottom line. Although capital is needed to build or retro fit such properties, companies that invest in ESG initiatives often see a quick return because high-performing buildings attract higher occupancy rates, thereby generating more revenue and decreasing the amount spent on utilities, insurance premiums and repairs due to severe-weather-related events. Additionally, there are incentives available at both the federal and state levels that are issued to businesses to help make the initial investment more attractive. Businesses today should assess their building portfolios, evaluate their alignment with industry benchmarks and leading practices, evaluate future trends and possible policy changes, and identify gaps and opportunities. With a thorough understanding of the company’s current position, its plans and stakeholders’ expectations, management can prioritize goals and set efficient ESG targets.
Businesses can develop appropriate strategic ESG plans by using climate risk scorecards, performing property vulnerability and resilience assessments, mapping physical risk, and evaluating benchmarks established by organizations such as the Sustainability Accounting Standards Board, Global ESG Benchmark for Real Assets or ISO 14001, as well as state and local governmental regulations.
Strong ESG policies and procedures can help build trust, attract and retain employees and tenants, and prevent costly mishaps while meeting community needs. Social initiatives, which are often assessed at the partnership and overall company level, represent the company’s corporate social responsibility. Today, the need for companies to evaluate their social actions is great because employees are demanding ESG services and better working conditions. These include demands for ensuring diversity, equity and inclusion throughout the business and governing board; developing ways to attract, retain and promote employees; and implementing an effective code of conduct. Additionally, businesses could further enhance their social responsibility by ensuring all employees have a safe and clean work environment, requiring all vendors and contractors to follow the company’s code of conduct, hiring contractors and vendors whose social responsibility is in line with their own social efforts, and assigning an internal resource dedicated to the ESG initiatives. Businesses today excel from the use of strong social responsibility practices because they incorporate diversity and inclusion, recruitment, talent development and mentorship programs, health and wellness, and create a conducive work environment for everyone throughout the company.
Tenants today are also considering companies’ ESG initiatives as a deciding factor for their tenancy because they want to rent high-performing spaces from a socially responsible company with strong ESG policies. Therefore, it is imperative that management evaluates its social responsibility with respect to the surrounding community. This could include a company publicly displaying its ESG policies, promoting its progress in sustainability efforts, and asking its tenants for feedback. Furthermore, tenants want affordable and accessible space, quality access to/from the property, and equal access to features and amenities within the community including good schools and shopping centers. By management taking into consideration tenants’ desires and opinions, it will help the business improve tenant attraction and retention and, thus, generate more rental income.
ESG is metrics-based with documented evidence. Consequently, it’s necessary that there are strong governing practices in place to help the company report and oversee its business performance, track progress, and strengthen data management and analytics. Management has a responsibility to implement the ESG policies and procedures as well as maintain and evaluate its progress and standards. Therefore, governing practices need to be in place to enable the company to perform due diligence and collect data and documentation to further improve planning efforts. Investors and lenders expect companies to track their environmental and sustainability metrics at the asset level and provide transparent reports that support the process for making meaningful and effective ESG plans. Through use of effective governing practices, management can perform decisive analytics, track progress, and create accurate and transparent reports on its corporate social responsibility and ESG efforts that showcase sustainability evidence to attract investors, lenders and tenants.
Companies often struggle with collecting data to support their ESG plans. However, data is in high demand because it enables companies to understand where change or innovation is needed. There are a variety of software and tools available that can help management efficiently document, track and assess its ESG progress. New emerging property technology (“proptech”) and proptech companies are designed to help streamline the gathering of data and aid in auditing and reporting for real estate. Using proptech, companies can review real-time data on energy usage, determine if environmental and sustainability opportunities exist, and quantify and standardize resource consumption to maintain safer and more valuable real estate. Through use of proper and effective governing practices, companies will develop a more efficient work environment backed by strong and accurate data, thus fostering a greater likelihood they will successfully achieve their ESG initiatives.
ESG and Investors
ESG is shaping and influencing real estate valuation and, therefore, gaining in importance among capital providers. Investors today use a variety of tools to determine future opportunities, and ESG policies are getting higher on their due diligence checklists. Although not a deciding factor, a business’s ESG plans can significantly impact an investor’s decisions. Through developments in technology and an increased transparency in reporting, investors now have more insight and want to know that businesses are forward looking and have sustainable business practices in place. By assessing a business’s ESG plans, investors can assess the risk versus the rewards as well as potential growth areas. Additionally, investors often believe the more proactive a company is with its ESG initiatives, the more attentive and responsive the company will be in mitigating risks. Accordingly, a strong ESG policy adds value to the investment because it attracts tenants, reduces operating costs and increases capital demand.
Debt and equity capital providers are incorporating the analysis of ESG and climate risk in their transaction due diligence. Recent floods, fires and extreme heat are forcing tenants (and their insurers) to assess property vulnerabilities. As confirmed in EisnerAmper’s article, “Commercial Real Estate 2022 Outlook: Fixing the Horizon to Navigate Through Change,” real estate companies should consider:
Hodes Weill’s 2021 Institutional Real Estate Allocations Monitor indicates that 49% of investors globally consider the ESG policies of the investee.
ULI’s 2022 Emerging Trends in Real Estate indicates that 82% of survey respondents consider ESG elements when making operational or investment decisions.
A recent report by JLL showed that office tenants are considering an owner’s ESG activities when selecting space, focusing particularly on building sustainability and efforts to create a healthy work environment, including quality air flow.
A Cushman & Wakefield study found that sellers are achieving 25% higher prices per square foot in Class A LEED-certified office buildings and 77% higher prices in Class B LEED-certified office buildings versus non-certified buildings.
Real estate companies and their management must develop a plan for prioritizing the implementation of ESG policies and initiatives because capital providers look for climate data and disclosures as well as resiliency, proactiveness and a property’s ability to attract tenants. Furthermore, as governmental policies are being implemented and net zero targets are set for 2050, capital providers need to know real estate companies are forward looking and performing due diligence to assess the impact of net zero goals on its assets to achieve new ESG standards. As a result of a growing trend and strong push for a decrease in the carbon footprint worldwide, there is an increase in investor demand for ESG policies that will significantly impact their decision-making process.
Most businesses today are looking to limit their impact on the environment by following real estate trends, moving away from fossil fuels, using renewable energy and developing net-carbon-zero real estate efforts. For property developers, this formidable endeavor includes management mapping out the ideal location using weather forecast predictions and climate migration trends, while also developing properties with the lowest emissions level possible and then offsetting the emissions created by finding ways to reduce and/or reuse waste and utilize renewable energy sources. Resilience is the key because it generates value. The initial investment will be repaid after these companies attract tenants and capital on the revenue side and reduce operating costs.
The need for socially responsible business practices will continue to grow because there are strong demand indicators for ESG and sustainability services. This, it is imperative that real estate companies continue to be forward looking and implement ESG initiatives to protect their assets. Effective ESG policies are directly correlated with stronger financial performance and better risk management because they provide companies the opportunity to mitigate risks and appease investors. Creating sustainable business practices, while preparing for implementation of future regulations, will help companies be environmentally conscious and socially responsible in conducting their day-to-day business, while simultaneously aide them in mitigating risks associated with climate change, improving relationships with investors and increasing overall long-term financial performance.
The conversation within and beyond the boardroom around environmental, social, and governance (ESG) is rapidly maturing. In recognition of the important role ESG plays in driving long-term value creation, more and more boards are focused on and are disclosing how their governance structure is evolving to consider ESG more intentionally. Having a defined plan for overseeing the integration of ESG and the interconnectedness across the pillars of “E”, “S”, and “G” into strategy and disclosure helps demonstrate the significance and prioritization of ESG efforts from the top, to both investors and broader stakeholders.
Amid this shift in board governance, investors continue to increase expectations on climate and ESG matters, as noted by the number and breadth of shareholder proposals on related issues in the 2021 proxy season. As investors update and finalize their proxy voting guidelines for 2022, there is the potential for more votes to be cast against board directors who do not demonstrate an adequate understanding of ESG and sufficient disclosure.
Change is also coming quickly on the regulatory front. The SEC has disclosed its regulatory agenda and has included four important areas that fall under the ESG umbrella: climate change, cyber risk governance, board diversity, and human capital management; proposed rules are expected in early 2022. The SEC also has begun to focus more on ESG-related comment letters. In late September, the commission issued a “Dear CFO” letter that provided a sampling of the types of comments issued about climate change and sustainability disclosures, with a particular emphasis on the consistency of climate-related risk disclosures and the relevance to financial reporting.
In addition, there has been significant movement toward the global convergence of standards. The IFRS Foundation announced at the UN Climate Change conference in Glasgow in early November the formation of the International Sustainability Standards Board (ISSB), which will consolidate the Climate Disclosure Standards Board and the Value Reporting Foundation (which includes the Integrated Reporting Framework and Sustainability Accounting Standards Board (SASB) Standards) by June 2022. The global ISSB standards are intended to elevate sustainability standard setting to be in line with that of financial reporting and accounting, and will promote transparency and consistency in sustainability disclosures to better inform decision-making for users of general-purpose financial reporting.
Other standard-setting entities enhancing their involvement in ESG include FASB, which has released a staff educational paper on the intersection of ESG matters with financial accounting standards; and the Commodity Futures Trading Commission, which has established a climate risk unit. With the pace of the ESG developments expected to accelerate rapidly in 2022, company management and boards should be focused on enhancing governance structures and the control environment around managing, and overseeing, ESG risks and opportunities and delivering high quality disclosure.
Trends in board governance of ESG
The “G” in ESG pertains to the broader corporate governance policies and practices that a company has put in place, and ESG is a significant area of focus for boards to better understand and oversee. As a starting point, the board should define its governance structure, policies, and practices that provide a framework for overseeing ESG accountability and strategic focus. This includes the structuring of board and committee oversight and the associated delegation of responsibilities.
Building on our 2020 initial research in this area, as highlighted in figure 3 (see PDF), there was a marked increase in 2021 in the percentage of S&P 500 companies disclosing in their proxies the primary committee(s) overseeing ESG relative to last year (from 72% to 86%). This trend likely is the result of companies progressing along an ESG maturity model (see figure 1 in PDF) that is more integrated into their core business strategy and risk program and defining how the board oversees such ESG efforts.
Notably, the 35 companies newly added to the S&P 500 this past year (see figure 2 in PDF) were more than twice as likely not to have disclosed the committee overseeing ESG, suggesting that company size and market expectations may have an impact on the formalization of an ESG governance framework.
When compared by industry (see figure 4 in PDF), energy, resources, and industrials (ER&I) companies continued to lead, with 94% of ER&I S&P 500 companies disclosing their governance approach in the proxy. This is not unexpected given the industry’s longstanding focus on employee health and safety and environmental matters, coupled with significant regulatory requirements. In the wake of the pandemic, there has also been strong upward movement in life sciences and health care industry proxy disclosure from 63% to 82%, and a similar trajectory has been seen in the technology, media, and telecommunications industry.
Despite the overall increase in proxy disclosure, there continues to be significant variation in the committee(s) that oversee ESG. The percentage of boards utilizing their nominating and governance committee for primary oversight has grown significantly. Not surprisingly, several companies have changed the nominating and governance committee’s name to be more transparent about the broader committee purview. In the callout boxes, within the PDF, we provide a sampling, from S&P 500 proxies, of some of the tailored committee names within the general nominating and governance category as well as some name variations with the ESG/Sustainability category.
Another trend and shift from last year’s research is an increase in the number of companies disclosing that the full board and a committee or multiple committees have a role in overseeing ESG elements (categorized as “multiple”). As ESG programs evolve and specific elements of the “E” and “S” are defined, a shared governance model whereby certain committees are delegated a specific ESG remit evolves. As an example, for many companies, human capital management initiatives, including diversity and inclusion initiatives, may fall under the “S” category and be allocated to the compensation, management development committee, or its equivalent talent committee, while corporate responsibility initiatives may be overseen by the governance committee. The trend for companies to disclose how the full board or committees are delegated certain ESG oversight responsibilities can effectively enable the board to execute on its fiduciary responsibility.
Only 1% of S&P 500 companies reported that the audit committee was the primary committee overseeing ESG for both years. While this is not surprising, following the shared governance model, the audit committee has certain important roles in ESG efforts, including the following:
Audit committees should understand whether there are appropriate internal and disclosure controls and procedures for the metrics disclosed, whether in an SEC filing or a separate sustainability report. This includes working closely with other committees to understand how ESG risks are identified and prioritized and how materiality is defined.
The audit committee should understand the companies’ ESG program—its interconnectedness across the pillars of “E”, “S”, and “G” and the related goals and metrics—and how management considers ESG strategies and the impact they may have on the financial statements.
As the development of companies’ integration of ESG into strategy and disclosure objectives continues to evolve and marketplace standards become more established and authoritative, the role of internal audit and the value of assurance as a tool to drive trust and confidence in ESG performance will become central. Assurance can provide a strong signal to investors and other stakeholders regarding the quality and reliability of disclosures. Audit committees should take the lead in overseeing the assurance engagement. The committee may consider inquiring with management about engaging with public company auditors on how to evolve and mature its ESG programs to meet the increasing demands of the market and regulators.
ESG’s integration into reporting and disclosure continues to proceed rapidly, and having a defined ESG plan and governance structure is increasingly an expectation rather than an exception, particularly for large public companies. Accordingly, boards will likely need to recalibrate their oversight to accommodate these changes and meet the requirements of regulators, investors, and other stakeholders. Given growing scrutiny and market expectations, companies are realizing value and identifying opportunities more quickly and confidently through a more rigorous ESG governance and data measurement and reporting process. Audit committees should consider adding ESG matters as a standing agenda item in 2022, understand the company’s disclosure process, and regularly assess the company’s progress, risk oversight, financial statement implications, and the integration of ESG considerations into the core business strategy.
2020 was a critical year for cities and communities. The pandemic affected the core of our urban living, and local governments needed to react quickly to protect people’s lives and simultaneously look for the best approaches to handle the long-term effects of COVID-19. View the original article here
At the intersection of both these challenges, one topic stands out: the importance of making cities more human and nurturing a strong sense of connection, shedding light on what cities should care about the most – people.
This is the motto of this study and the underlying idea in the 12 trends we present. Committed to helping cities drive change, we have listened to prominent actors in order to understand what we might expect to happen next. Researchers, practitioners, policymakers and city leaders are just some of the people we interviewed, and their insights helped identify 12 trends that cities, leveraging technology and data, can follow on the road to becoming smarter, more sustainable and resilient.
The 12 trends are not equally applicable or desirable for all cities. They cover most of the domains of a city and touch on the main changes emerging from the pandemic. However, we do not suggest that all these trends form a recipe for every city – after all, there is no one-size-fits-all approach to city development.
These are the 12 trends we have identified:
GREEN PLANNING OF PUBLIC SPACES: Cities are being planned and designed for people, with ‘green’ streets, new corridors and public spaces as centers of social life.
SMART HEALTH COMMUNITIES: Cities develop health care ecosystems that are focused not only on diagnosing and treating sickness, but also on supporting well-being through early intervention and prevention, while leveraging digital technologies.
15-MINUTE CITY: Cities are being designed in a way that amenities and most services are within a 15-minute walking or cycling distance, creating a new neighbourhood approach.
MOBILITY: INTELLIGENT, SUSTAINABLE AND AS-A-SERVICE: Cities work towards offering digital, clean, intelligent, autonomous and intermodal mobility, with more walking and cycling spaces, where transport is commonly provided as a service.
INCLUSIVE SERVICES AND PLANNING: Cities evolve to have inclusive services and approaches, fighting inequalities by providing access to housing and infrastructure, equal rights and participation, as well as jobs and opportunities.
DIGITAL INNOVATION ECOSYSTEM: Cities attract talent, enable creativity and encourage disruptive thinking, developing themselves through an innovation model approach and a combination of physical and digital elements.
CIRCULAR ECONOMY AND PRODUCING LOCALLY: Cities adopt circular models based on a healthy circulation of resources, and on principles of sharing, reusing and restoration, with an emphasis on limiting municipal waste volumes and on producing locally – for instance, by urban farming.
SMART AND SUSTAINABLE BUILDINGS AND INFRASTRUCTURE: Cities aim to have regenerated buildings; they leverage data to optimise energy consumption and the use and management of resources in buildings and utilities: waste, water and energy.
MASS PARTICIPATION: Cities evolve to be human-centered and designed by and for their citizens, promoting mass participation by the ecosystem in a collaborative process and following open government policies.
CITY OPERATIONS THROUGH AI: Cities adopt automated processes and operations (orchestrated by a city platform) and are following data-driven planning approaches.
CYBERSECURITY AND PRIVACY AWARENESS: Cities strive to promote awareness of the importance of data privacy and preparedness for the impact of cyberattacks since data will be an important city commodity.
SURVEILLANCE AND PREDICTIVE POLICING THROUGH AI: Cities are leveraging artificial intelligence (AI) to ensure safety and security for their citizens while safeguarding the privacy and fundamental human rights.
Trend 1: GREEN PLANNING OF PUBLIC SPACES
Cities need to be planned and designed for people, with ‘green’ streets, new corridors and public spaces as centers of social life.
Urban areas are traditionally characterized by high population density and heavy construction to support modern amenities, such as transport and commercial buildings. They now face increasing pressure from expanding populations, limited resources and the growing impact of climate change. One of the indicators for measuring SDG 11 is the area of public and green space in a city, as the lack of natural space creates an unhealthy urban living environment.
Cities should be driving a decarbonization agenda. Becoming low carbon is the first step towards mitigating carbon emissions and achieving ecosystem resilience. At the same time, cities should ensure that urban planning is capable of dealing with the pressures of climate change in the adaptation agenda.
Green public spaces entail:
a large number of trees in cities (Singapore ranks first in the Green View Index from MIT’s Senseable City Lab, which measures the canopy cover in cities);
creation of more and larger public parks and nature-based solutions in the urban environment, fostering a closer connection to nature even in cities with high population density;
more walking and cycling facilities instead of car-centric designs and parking areas, with space for children and adults to enjoy outdoor activities, and fostering a sense of security and safety (according to a study by C40, investing in a shift to mass transit and developing walking and cycling corridors can reduce carbon emissions in cities by 5-15 per cent.).
Cities around the world are recognizing the benefits of a green approach to urban planning, as it has the potential to lower urban temperatures, mitigate air pollution and build natural environmental resilience. World Economic Forum’s Global Agenda Council on the Future of Cities has included increasing green canopy cover in its top ten list of urban planning initiatives.
How to ensure successful implementation
Understand sustainability drivers and societal targets.
Promote equal, fair and integrated urban planning.
Do not underestimate the power of community engagement.
Ensure funding and financing.
Trend 2: SMART HEALTH COMMUNITIES IN THE CITIES
Cities are developing health care ecosystems that are not only focused on diagnosing and treating sickness but also on supporting well-being through early intervention and prevention, leveraging digital technologies.
The health crisis during the pandemic made the case clear: there is a community role in creating a better health environment, and cities need to pay more attention to the well-being of their citizens. Globally, five of the top ten causes of death are related to unhealthy behavior. This brings into the spotlight the need for preventive medicine. The factors that affect a person’s health and behavior are complex; therefore communities (physical and virtual) must play a part.
Cities will develop health care ecosystems that move away from a focus purely on diagnosing and treating sickness and injuries to one that is equally focused on supporting well-being through early intervention and prevention. Instead of being designed and funded to treat individual patients one by one, they will have a greater appreciation of the interconnectedness of communities. The social determinants of health will be better understood, and government and the private sector will collaborate to address some of these challenges.
As care moves outside of the hospital walls new community players and disruptors will become critical in forming the new ecosystem. Scientific advancements and the affordability of personalized health care (genomics, micromics, metabolism and behavioral economics) will ensure that care is tailored for individuals and their families. The citizens’ health journey will be underpinned by interoperable data and analytics guiding them through positive health choices and behaviors.
Cities have a responsibility to create a healthy environment. Smart Health Communities (SHCs) engage patients, companies and public entities to deliver digital health services, in order to develop and shape communities, reducing costs dramatically, improving wellness and longevity, and promoting economic growth. Governments act as enablers of change by promoting this interconnected health care ecosystem. A city, as a geographical SHC, can drive a shift towards preventive and curative therapies, as well as provide solutions that foster collective and cooperative healthy behavior, and generate and analyze interoperable data to predict risks and evaluate impact. While privacy is a concern, investment in smart public health initiatives generates substantial return on investment for cities while improving public health and well-being.
How to ensure successful implementation
Work to generate trust.
Invest in a data privacy and security infrastructure.
Establish partnerships between public and private stakeholders, namely government agencies, technology companies, health care and life sciences players, the media, NPOs/NGOs, social care entities and citizens.
Collaborate with technology companies to launch awareness-creation programs and knowledge-sharing platforms.
Establish community-driven funding hubs to strengthen the reach and support capabilities and operational efficiency of SHCs.
Restructure policies and consider incentivizing SHC development plans.
Trend 3: THE 15-MINUTE CITY
Cities are being designed so that amenities and most services are within a 15-minute walking or cycling distance, creating a new neighborhood approach.
The ‘15-minute’ city concept – primarily developed to reduce carbon emissions by reducing the use of cars and motorized commuting time – is a decentralized urban planning model, in which each local neighborhood contains all the basic social functions for living and working. Many people argue that the concept of creating localized neighborhoods in which residents can get everything they require within 15 minutes by walking, cycling or on public transport will ultimately improve the quality of life. Such spaces entail multipurpose neighborhoods instead of separate zones for working, living and entertainment, which reduces the need for unnecessary travel, strengthens a sense of community and improves sustainability and liveability.
Today most cities have ‘operation-based’ neighborhoods, with separate areas used predominantly for business or entertainment. Fragmented urban planning results in a sprawl, with people having to travel long distances across the city to get to their destination. In contrast, compact cities of the future, or ‘hyperlocalization’, prioritize strategies for urban infrastructure that aim to bring all the elements for living and working into local neighborhood communities.
The ‘15-minute’ city is an iteration of the idea of ‘neighborhood units’ developed by American planner Clarence Perry during the 1920s. The theory of ‘new urbanism’, an urban planning and design concept promoting walkable cities, subsequently gained popularity in the US in the 1980s. Similar versions of ‘urban cells’ or 30- and 20-minute neighbourhoods have also emerged across the globe in the past decade.
The rezoning model will gain further traction in the future, boosted during the COVID-19 disruption, by new ways of working that require less transport. With climate change as a major global concern, C40 in its “C40 Mayors’ Agenda for a Green and Just Recovery”has recommended this model for cities worldwide, arguing that its pedestrianization approach contributes to a reduction in greenhouse gas emissions and supports environmental sustainability.
While this approach may not be entirely applicable to every city – for example, it is probably more suitable for a big metropolis than for smaller cities – remote working and the digitalization of services have increased the impetus to apply the principle of neighborhood planning regardless of city size.
How to ensure successful implementation
Correlate sustainability goals and urban planning initiatives.
Ensure community endorsement.
Decentralize core services.
Launch schemes to promote affordable housing in every neighborhood.
Allow flexible use of urban spaces and properties across neighborhoods.
Trend 4: MOBILITY: INTELLIGENT, SUSTAINABLE AND AS-A-SERVICE
Cities are working towards offering digital, clean, intelligent, autonomous and intermodal mobility, with more walking and cycling spaces, where transport is commonly provided as a service.
This is one area where cities should expect huge disruption. Some major changes in how people move around in cities are already under way, but the trend will accelerate further in the next decade, with electrification, autonomous driving, smart and connected infrastructure, modal diversity, and mobility that is integrated, resilient, shared and sustainable – powered by disruptive business models. In answers to an ESI ThoughtLab survey question, 54 per cent of city leaders admitted they will rethink mobility and transportation in the aftermath of the COVID-19 pandemic.
Less need to travel. It is expected that in general people will travel less than they have in the past. With new urban planning concepts such as the ‘15-minute city’ promoting compact environments, ‘connected corridors’ and changes in the way that people work, movements within urban areas will decrease substantially and bicycles, scooters and even walking will increasingly be the preferred options in community neighborhoods.
Electrification. It is estimated that in 2030, electric vehicles (EVs) will have around 32 per cent of the total market share for new car sales globally,although there will be differences between regions.
Connectivity and automation. Recent Deloitte research in the United States estimates that by 2040, up to 80 per cent of passenger miles travelled in urban areas could be in shared autonomous vehicles. This development will be led by major technology-based corporations or the automotive and transport sector and by technology-based start-ups. Solutions such as passenger drones by EHang and drone delivery by Amazon are making rapid advances. Logistics companies look increasingly to autonomous technology to meet the rising demand for goods.
Sharing. Cities will also benefit from an increase in on-demand multimodal mobility and Mobility-as-a-Service (MaaS) platforms, such as in Helsinki. For instance, residents will be able to plan and book door-to-door trips digitally, use the same fare card for all transport modes, access automated last-mile cargo shipment services, and have end-to-end real-time visibility of freight in transit – and with seamless payment models.
Intelligent mobility. With data playing a central role in some of these shifts, customised travel is something that cities will start to deliver, segmenting their customers (citizens) in a mobility context and implementing strategies for each market segment. The value of ‘intelligent’ mobility is forecast to grow to €850 billion by 2025, representing more than 1 per cent of global GDP.
How to ensure successful implementation • Embrace a holistic approach (and consider the total mobility mix), and start with a minimal viable ecosystem for ‘smart mobility’, adding features over time in an agile way.
• Invest in infrastructure – physical, energy, digital and telecoms – that supports effective transformation.
Be aware that a new generation of vehicles is needed, and there should be a resurgence in the use of some existing types of vehicles, such as motorbikes and bicycles, with a strong focus on micromobility.
Make mobility management a priority, both management of assets (infrastructure and vehicles) and management of clients (people).
Make sure regulation adapts to the new circumstances, covering vehicle security and liability in cases of accidents, data management and privacy, interoperability, connectivity, risk and responsibility, and cybersecurity.
Trend 5: INCLUSIVE SERVICES AND PLANNING
Cities are evolving to have inclusive services and approaches, fighting inequalities by providing access to housing and infrastructure, equal rights and participation, and jobs and opportunities.
Cities are not only centers of economic development; they symbolize equality, healthy communal coexistence and prosperity for all. Social inclusion should be a key pillar of urban growth and development for the cities of the future, bearing in mind the three building blocks identified by World Bank: spatial inclusion (providing affordable housing, water and sanitation), social inclusion (expanding equal rights and participation) and economic inclusion (creating jobs and offering citizens opportunities for economic development).
Cities should be planned and designed to generate social and economic outcomes for everyone, avoiding the costs that occur when people are excluded. Although the poor are usually the most affected, cities will also remove the barriers caused by differences in gender, race, nationality, disability or religion. Inclusive design could mean building gender-inclusive urban centers to provide safe and secure spaces for carers and installing wheelchair-accessible features for those with mobility difficulties. Inclusive design may mean building greener and safer neighborhoods for all citizens and investing to create secure and joyful spaces for children to play and accessible places for the elderly, making cities pleasurable for the silver generation. An inclusive social care system will embrace migrants and offer them tailored services that address their particular needs and circumstances, just as for everyone else.
There are already some signs of cities prioritizing inclusion. A survey of 167 cities worldwide found that 40-47 per cent use metrics to track progress towards inclusion goals, although the majority are in advanced economies.
Digitalization enables governments to facilitate access to a range of services, accelerate business opportunities, analyze societal gaps, educate mass audiences, collect real-time data, boost data-driven decision-making, facilitate predictive and proactive governance, and engage larger audiences in social activity. It also frees up government capacity to re-direct finite administrative and case management resources to those who need it most.
Although a fundamental requirement for social inclusion, technology may also create disparities. City planners should remain aware of the large numbers of ‘digitally invisible’ citizens, to avoid skewing the results of city analysis that would compromise urban planning efforts and even contribute to widening the inequality gap.
How to ensure successful implementation
Implement proactive multisector solutions, both preventive and curative.
Promote an integrated planning approach instead of a fragmented one.
Follow an equity-centered by design approach.
Improve the adoption of technology solutions and digital skills, supported by adjusted regulation.
Pursue data equity.
Establish inclusive living labs.
Use agile methods to respond rapidly and anticipate citizens’ needs.
Trend 6: THE CITY AS A DIGITAL INNOVATION ECOSYSTEM
Cities strive to attract talent, enable creativity and encourage disruptive thinking; developing themselves through an innovation model approach and a combination of physical and digital elements.
While traditionally companies and industrial parks have been concentrated in suburbs of the city, start-ups and digital nomads are bringing innovation and ideas to the city centres. As population numbers increase in urban areas, cities compete for investment, skilled workers (talent) and cultural prominence, and this is turning urban regions into innovation hubs, leveraging data.
In some cities with an innovation or technology department, individuals try to innovate from a silo. This is not what we mean. Cities will adopt a multidimensional approach to innovation, the so-called quintuple innovation helix framework (of interactions between university, industry, government, public and environment), and city governments will act as platforms enabling the right connections, policies, places and infrastructure to make the ecosystem flourish; solving the town’s most prominent challenges and bringing positive change to the city and its industries.
Cities will be Living Labs for digital transformation and centers of experimentation, using data to develop pilots that can be scaled up. By putting talent attraction at the center of its strategy, a city can develop with the goal of being the most attractive host (of people, companies and research centers), in order to facilitate ecosystem development. The City Hall has to develop the right skills, and data collection and usage, and modernize its governance model to foster collaboration and encourage open innovation. Increasing the level of adoption of digital innovation in high-priority economic sectors generates a positive impact on local competitiveness, by opening up new sources of employment and economic growth.It also supports the uptake of disruptive and promising digital technologies. Remote working has lengthened the list of cities that can adopt this strategic approach. In line with the ‘rise of the rest’ theory put forward by Richard Florida in 2019, the shift from enterprise attraction to talent attraction makes it possible for smaller cities to thrive in a post-pandemic world, using data as a source of competitiveness in the digital innovation environment. It is a time for small remote hubs.
How to ensure successful implementation
Create capacity to attract talent, expertise and open talent networks.
Foster agile processes and avoid a risk-aversion culture.
Add the required skill sets and gain an awareness of the opportunities that new technologies offer.
Ensure data mastery and interoperability standards.
Embrace a new way of management and leadership.
Trend 7: CIRCULAR ECONOMY AND LOCAL PRODUCTION IN THE CITY
Cities are adopting circular models based on a healthy circulation of resources; principles of sharing, reusing and restoring; and with emphasis on limiting municipal waste volumes and on producing locally – for instance, urban farming.
Do you know that on average a car is parked more than 90 per cent of the time? Or that the average office is used only 35-50 per cent of the time? That 30 per cent of food is wasted? That half of the waste is produced in cities? Increasingly, cities are developing aspects of a circular economy, which entails decoupling economic activity from the consumption of finite resources and designing waste out of the system.
What does it mean to live in a city with a circular economy? It is a city that:
promotes a better use of resources through procurement policies;
consumes less, and reuses and recycles water, energy, products and materials;
recycles and manages waste according to regulations;
stimulates an economy of repair, borrowing and second-hand commerce;
nurtures a sharing mindset (e.g., car trips, spaces and materials);
fosters better use of resources in construction (e.g., 10-15 per cent of building materials are wasted during construction);
stimulates an innovative approach to how the city and its citizens consume, store and use resources.
A circular economic model is one of the pillars of the European Union’s European Green Deal strategy,and there are already some examples of its application, as well as policies and mechanisms to fund the transition. Cities will also increasingly encourage a ‘produce local’ approach to food and energy. Urban and small-scale farming is gaining traction in some urban centers as a way to deliver fresh and healthy food, establish direct contact with food producers and reduce carbon emissions, while strengthening the local economy. Innovative approaches make better use of space and light, such as vertical farming, hydroponics, LED indoor farming and rooftop farming. Simultaneously, the energy revolution is contributing to the circular economy through decentralization of energy production, mainly through renewable sources (biogas, wind, solar, wood biomass, waste, etc.), and off-grid and microgenerators, paving the way for self-sufficiency whereby cities generate as much energy as they consume, creating communities of energy and offering further economic opportunities.
How to ensure successful implementation
Secure funding for the transition.
Establish flexible and simple regulatory structures and smart procurement.
Create or rethink metrics to measure circularity.
Leverage national or regional policies and invest in awareness campaigns.
Trend 8: SMART AND SUSTAINABLE BUILDINGS AND INFRASTRUCTURES
Cities aim to have regenerated buildings and to leverage data to optimise energy consumption and the use and management of resources in buildings and utilities: waste, water and energy.
In 2019, the Coalition for Urban Transitions estimated that it should be possible to cut emissions from cities by about 90 per cent by 2050 (15.5 GtCO2e by 2050) using proven technologies and practices, in particular for buildings and infrastructure. Estimated cuts include 36.5 per cent from residential buildings and 21.2 per cent from commercial buildings. Buildings are currently responsible for 30-40 per cent of total city emissions. To achieve the COP21 target by 2050, emissions from buildings must be 80-90 per cent lower than they are today.
Many buildings are energy inefficient and contribute heavily to carbon emissions. In the EU, as of February 2020, roughly 75 per cent of building stock was energy inefficient. So there is some way to go. A 2019 Navigant report stated that only 5 per cent of the smart city projects that it tracked had a focus primarily on building innovation, and just 13 per cent had ‘some level’ of focus on buildings.
World Green Building Council defines a green building as one that, “in its design, construction or operation, reduces or eliminates negative impacts, and can create positive impacts, on our climate and natural environment; preserve precious natural resources and improve our quality of life”.9 Given the pressure on cities to act on climate change, green buildings are going to invade our urban centers. Besides being built with sustainable and ethical materials, they will be energy, water and resources-efficient; environment-friendly by design – powered by renewables (such as solar) and capable of producing their own energy (electricity prosumers); covered by vertical and/or rooftop gardens; and able to provide a better indoor environment for those who live in them or use them.
On top of that, they will leverage data and digital technology to enable components of infrastructure to become more efficient and better adapted to the stakeholders’ usage. Business models provided by flexible office operators will foster an Office-as-a-Service or even Real Estate-as-a-Service approach.
Gartner predicts that by 2028 there will be more than 4 billion connected IoT devices in commercial smart buildings. They will be powered by telecommunications infrastructures, with 5G and High Efficiency Wi-Fi (6 or 6E) at the forefront, and smart utilities such as power, waste and water.
As of May 2020, 28 major cities have signed up for the World Green Building Council’s Net Zero Carbon Buildings Commitment, which calls for cities to reach net-zero carbon operations by 2030 for all assets under their direct control, and to advocate for all buildings to become net-zero carbon in operations by 2050.
How to ensure successful implementation
• Define a vision and technological guidelines, and develop a roadmap.
• Stimulate and prioritise sustainability-targeted renovation, construction and restoration projects.
• Launch incentive plans to promote alternate materials and build a strong engagement ecosystem.
• Beyond investing in buzzwords like 5G or sensory-tech solutions, extract value from data.
• Promote data-sharing standards and policy.
Trend 9: MASS PARTICIPATION IN CITY BUILDING AND DEVELOPMENT
Cities are evolving to be human-centred and designed by and for their citizens, promoting mass participation by the ecosystem in a collaborative process and following open government policies.
What does an ideal experience in our city look like? How can our city contribute to a brighter global future? How would we like our children to grow up in the city? What would we like our city to be known for around the world?
These are some of the questions you will be asked in cities where there is open government and mass participation. These are places where citizens, social innovators, civil society organisations, businesses and academia are part of the process of building their cities (in a quintuple helix model), closing the gaps between local government and the ecosystem.
Through mass participation, supported by open data and technology, and with local government acting as a platform, cities can use citizens as a ‘sensor’ and benefit from greater innovation, better utilisation of resources and an increased sense of ownership. Co-creation through mass participation is a bi- or multidirectional human-centred approach, rather than just a bottom-up or traditional top-down approach.
Cities are increasingly innovative in the way they promote participation, and technology plays a key role in enabling innovation – for instance, mobile applications and reporting websites overcome the need for groups to meet in person to discuss new ideas and collaborate; and digital currency opens the door to gamification strategies. But to ensure the three principles of open government are met (participation, collaboration and transparency), it is necessary to have open data platforms and other initiatives. Participatory budgets are a good starting point. Some cities go a step further and provide citizens and the ecosystem with real-time access to information, to keep them informed about changes that affect where they live. Ultimately, cities will progress towards having true platforms for collaboration, fostering co-creation and leading to new governance models (co-governance), where responsibility is shared among the participants and is not just a burden on the local government. From this perspective, a new culture is created, and citizen engagement emerges as critical for ensuring the long-term sustainability of policy initiatives.
How to ensure successful implementation
Engage the city population at scale and combine physical and virtual interactions whenever possible.
Follow the digital imperative, but create a smart population for smart cities.
Ensure accessibility and inclusiveness for all citizens.
Establish clear governance processes and transparency to boost trust – an enabler of open governments and collaboration.
Align objectives and expectations, and make clear connections between participation and decisions taken.
Trend 10: CITY OPERATIONS THROUGH AI
Cities are adopting automated processes and operations (orchestrated by a city platform) and following data-driven planning approaches.
Machines run 24/7, and there are operations and tasks that cities perform that will become increasingly smart and powered by artificial intelligence (AI). AI will contribute to the optimisation of operational efficiencies, benefiting city managers, and ultimately citizens, through reshaped service delivery. In an ESI ThoughtLab study, 66 per cent of 167 cities surveyed are investing heavily in AI, and 80 per cent will do so over the next three years.
While chat assistants are currently among the most common solutions powered by AI, cities will evolve to have digital platforms as ‘city brains’, where all urban activity is orchestrated and operated, providing a holistic view of the city, allowing for events correlation, fast and assertive root-cause analysis, predictive analysis (through machine learning) and incident management; and providing operational insights through visualisation. If the behaviour of almost every citizen is registered through anonymised data, and 5G technology enables cities to become huge connected ecosystems, it will be of paramount importance to maximise data value and improve planning and decision-making using AI and data analytics, on the way to a cognitive city. Gartner predicted in 2019 that a city platform will be a mature smart city solution in five to ten years’ time, when it is expected that 1-5 per cent of cities will be using a city platform to manage their operations.
But cities can go even further. We see cities like Dublin and Singapore, among others, creating a Digital Twin – a dynamic digital replica of their physical assets and environments and their interdependencies – for urban planning purposes and using machine learning to predict future events and trends. Digital Twins will become increasingly powerful in enabling data-driven decisions and will have a high adoption rate among city governments, with the promise of making cities more resilient.ABI research has predicted that by 2025 the number of urban Digital Twins will exceed 500.
How to ensure successful implementation
Start with data strategy and governance.
Be aware of privacy issues, and stimulate a culture of trust.
Ensure data standards and interoperability.
Avoid algorithmic bias.
Develop the right skill sets among the city workforce.
Follow a citizen-focused approach to operations.
Trend 11: CYBERSECURITY AND PRIVACY AWARENESS IN THE CITY
Cities strive to promote awareness of the importance of data privacy and to get prepared for the impact of cyberattacks, since data will be an important city commodity.
As services are becoming highly integrated and interconnected, and vulnerabilities created during data exchanges are more common, data security is vitally important. In 2018, the total cost of losses from cyberattacks for cities in a survey averaged €2.8 million.
Cybersecurity is now a key consideration for developers and planners of smart cities, and attention is turning to the risks inherent in such a highly interconnected environment. However, while the cybersecurity industry has developed a mature understanding of how to measure and mitigate the impact of cyberattacks on infrastructure in ‘non-smart’ cities, there is limited knowledge of the potential impact of attacks on smart cities.
An attack on smart city infrastructure may create effects that cascade – or ‘ripple’ – outwards and affect other parts of the city or country, or beyond. Resilience is the essential concept that must be considered when creating these complex and highly interconnected environments. It is essential to use resilience as a cornerstone of city building, and to do so in a way that can be scaled up and remain flexible for future upgrades and enhancements.
As the complexity of technologies, operational interdependencies, and systems management increases, so does the interest of hackers in profiting from this environment. Developing smart city initiatives without considering cybersecurity and privacy can result in a highly vulnerable environment that poses security risks to critical infrastructure and data, and in some cases may even create safety risks for citizens.
Advance planning is essential. By one estimate, 95 per cent of Cities 4.0 (as labelled by ESI ThoughtLab, referring to hyper-connected cities that use technology, data, and citizen engagement in pursuit of the SDGs) ensure that cybersecurity is considered early in the process, compared with only 51 per cent of other cities.
However, many cities are not ready for the challenges. Besides lagging far behind in the digital revolution, with outdated technologies running critical infrastructure, they lack the human resource expertise to be capable of addressing the challenges. Creating ecosystems of innovation – as Tel Aviv has done – could be one approach to improving security. Another approach is to invest in models of public/private cooperation and coordination. Efforts must be backed by city executives and not left to external entities or departments alone.
How to ensure successful implementation
Ensure three major goals:
Govern like a nation.
Treat smart cities as a defensive ecosystem.
Reboot with resilience.
Syncronise the city with cyber strategy, and allow for flexibility.
Have a clear cyber and data governance in place, with accountability.
Leverage the ecosystem and build strategic partnerships to grow cyber capabilities.
Align regulation policies.
Adopt a specific tool to manage the cybersecurity landscape of a smart city.
Invest in awareness campaigns on privacy.
Trend 12: SURVEILLANCE AND PREDICTIVE POLICING THROUGH AI
Cities are leveraging artificial intelligence (AI) to ensure safety and security for their citizens while safeguarding privacy and fundamental human rights.
Surveillance and predictive policing through AI is the most controversial trend in this report, but one that has important implications for the future of cities and societies.
Technology is frequently used as a synonym for evolution, but the ethics of its use may need to be questioned. An underlying question is what society we are aiming to build. There are doubts and uncertainties about the impact of AI on communities and cities: the most fundamental concern is privacy, but there are frequent debates about AI from other perspectives, such as its impact on jobs, the economy and the future of work. Therefore, one cannot disconnect the discussion about surveillance and predictive policing from recent debates about the societal, ethical and even geopolitical dimensions.
The pace of adoption of AI for security purposes has increased in recent years. AI has recently helped create and deliver innovative police services, connect police forces to citizens, build trust and strengthen associations with communities. There is growing use of smart solutions such as biometrics, facial recognition, smart cameras and video surveillance systems. A recent study found that smart technologies such as AI could help cities reduce crime by 30 to 40 per cent and reduce response times for emergency services by 20 to 35 per cent. The same study found that cities have started to invest in real-time crime mapping, crowd management and gunshot detection. Cities are making use of facial recognition and biometrics (84 per cent), in-car and body cameras for police (55 per cent), drones and aerial surveillance (46 per cent), and crowdsourcing crime reporting and emergency apps (39 per cent) to ensure public safety. However, only 8 per cent use data-driven policing. The International Data Corporation (IDC) has predicted that by 2022, 40 per cent of police agencies will use digital tools, such as live video streaming and shared workflows, to support community safety and an alternative response framework.
Surveillance is not new, but cities are exploring the capabilities of predicting crime by analyzing surveillance data, in order to improve security. Cities already capture images for surveillance purposes, but by using AI, images can now be analyzed and acted on much more quickly.Machine learning and big data analysis make it possible to navigate through huge amounts of data on crime and terrorism, to identify patterns, correlations and trends. When the right relationships are in place, technology is the layer that supports law enforcement agencies to better deliver their job and trigger behavior change. The ultimate goal is to create agile security systems that can detect crime, terrorism networks and suspicious activity, and even contribute to the effectiveness of justice systems.
How to achieve these goals while respecting privacy and liberties remains a crucial question.
Experts say it is almost impossible to design broadly adopted ethical AI systems, because of the enormous complexity of the diverse contexts they need to encompass. Any advances in AI for surveillance and predictive policing need to be accompanied by discussions about ethical and regulatory issues. Even though the value proposition of these technologies might seem attractive from a use case perspective, liberties and civil rights need to be protected by proper privacy and human rights regulations.
In summary, cities need to consider if using technology for surveillance and policing implies making concessions to convenience at the expense of freedom.
How to ensure a successful implementation?
Balance security interests with the protection of civil liberties, including privacy and freedom.
Experiment responsibly, and regulate first.
Establish institutional review boards that include experts from multiple disciplines.
Create mechanisms for monitoring and reviewing algorithms.
Privilege the usage of environmental data instead of personal data.
Promote strong collaboration and trust between law enforcement systems and citizens.
Accompany digitalisation with a change in culture.
Social impact and decarbonization strategies will be the pillars of urban development projects in the coming years View the original article here
From revamping disused docklands to rejuvenating rundown neighbourhoods, cities are embarking on urban development projects that put health and sustainability at the heart of placemaking.
These mixed-use schemes increasingly focus on implementing features that support wellbeing, champion strong environmental credentials, build communities and promote equality and inclusion.
The redevelopment of the western edge of Dublin city center aims to bring the concept of the 15-minute city to life while Rotterdam’s M4H project will re-green the site surrounding a manufacturing hub, and add sport facilities, housing, hospitality and cultural space.
Such schemes show how thinking around what makes a successful city is shifting, says Jeremy Kelly, Lead Director, Global Cities Research at JLL.
“City governments are looking beyond traditional metrics like GDP and employment growth and are refocusing on harder-to-measure factors relating to liveability, opportunity and experience,” he explains.
“That has implications for real estate because city governments now expect the industry to deliver developments that have a positive social impact.”
Looking beyond the money
Many of today’s schemes draw from major urban projects of the previous decade – such as Hudson Yards in New York City and London’s King’s Cross.
“These were substantial projects that changed the spatial logic of a city, opening up new areas that were increasingly mixed-use, and cutting-edge when it came to responding to the demands of occupiers and well-off residents,” says Kelly.
One big difference is that urban transformation projects of the 2020s will positively impact surrounding communities, in part by addressing challenges to provide affordable housing.
“That’s where the shift is – thinking about the community impact,” says Kelly. “And for developments to boost or retain their value, they’ll need to be part of neighbourhoods that are also regenerating.”
Health is another key focus for today’s projects, tying into trends such wellness in the workplace and more active lifestyles.
Outdoor access, natural light and green areas – long shown to boost mental health – will be critical features for projects, along with easy access to leisure and healthcare amenities.
“Health and wellbeing concepts are foundational to today’s developments, whatever the size of the project,” says Walid Goudiard, Head of Project and Development Services at JLL. “It’s a matter of placemaking and curating the built environment to provide a healthy, positive experience whether in an office or residential setting.”
The McEwan in Edinburgh, for example, is the first European residential scheme to receive a Fitwel 3-start rating for its focus on health and wellbeing through landscaped gardens and neighbourhood amenities.
And there will be more to come. “The pandemic has accelerated that transition toward creating more human and sustainable places,” says Richa Walia, Director, Work Dynamics Research at JLL. “There’s a genuine desire among companies to act responsibly and their first priority is to create human-centric places.”
Sustainability for social good
Environmental concerns will equally guide urban development, as municipalities develop plans to hit net zero targets and more real estate companies report their environmental impact in line with globally recognized standards.
In Paris, the recently completed regeneration of Clichy-Batignolles is designed as an eco-quarter with low-energy building powered from geothermal and solar sources.
Biodiversity, too, will become a key pillar for transformation projects, with city authorities more likely to greenlight schemes with features such as green roofs, areas given over to rewilding and living walls. Many municipalities now restrict the construction practice of soil sealing to improve carbon capture in buildings and boost biodiversity.
What’s more, plans will need to consider retrofitting and repurposing existing buildings instead of embarking on carbon-intensive new builds. Here, technology and digitisation can offer two vital benefits in optimising resources, says Goudiard.
“Firstly, sensor-enabled smart buildings can automate operations for improved efficiency and reduced emissions,” he explains. “Digitizing spaces also helps with tracking how they’re used and then getting the maximum value from them – especially in dense city centers. The concern is how to embed tech solutions in a way that really benefits users.”
Technology could also boost inclusiveness in urban developments through data analytics that align space design with users’ needs – such as enhancing play areas or accessible walkways – or digital services that offer more equitable access to housing and infrastructure. However, with less defined metrics to track than decarbonisation initiatives, inclusion can be a design challenge in many projects.
“There is a lot of work to be done when it comes to creating inclusive spaces,” says Walia. “The elements that make up diversity and inclusion need to be addressed holistically. Companies are trying to understand how a development can truly create social impact.”
Governance is also moving with the times.Whole of place governance, where authorities collaborate closely with the users of a space, will be the critical difference in urban transformation projects of the coming years.
City planning in Paris, for example, now calls for developers to run consultations where local communities provide feedback to design teams and investors on major projects, helping to improve inclusiveness.
“It’s a more holistic view that’s not just based on the economic output of that district,” says Kelly. “It’s about value creation and improving quality of life for the whole neighborhood.”