What is the foundation of Eco City and who has to fund it?
With no doubt, ecological and sustainable development of growing urban areas is essential for future of humankind. However, the process has its risks with some projects falling short of their ambitions. Those that succeeded become Eco City benchmarks, like Helsinki. This article explores the mistakes of new Eco Cities. Deputy Mayor of Helsinki shares the insight of successful way to handle city's eco-development of the highest level.
Eco City as
a source of income?
We have done an overview of new Eco Cities worldwide. Now it is time to see how and by whom they have been founded.
To begin with, let us look at the city of Masdar. The city is a subsidiary of the Mubadala Development Company, governmentally owned company, which has invested about $22bn into the project. Masdar is a part of The Abu Dhabi Economic Vision 2030, a plan that ensures new sources of income and economic development of the country. The city is located 17 kilometers away from Abu Dabi. Its construction began in 2006. Due to the global financial crisis, the completion of the city has been pushed back from 2020 to 2030. According to the master plan, Masdar is designed to be a global hub for the cleantech industry, with 50,000 residents and 40,000commuters by 2025. However, in 2016, the city has about 2,000 employees, 1,000 residents, and 300 students. What went wrong with a project that was supposed to become a profitable, sustainable source of income for Arabic pearl? One of the reasons might be the broken link between government and business communication.
Masdar City has a number of benefits for developers, investors, and businesses. Eco City is 5 minutes away from Abu Dabi international airport, 20 minutes from Abu Dabi downtown, and only 40 minutes ride to Dubai. It has a free zone status, which enables to use opportunities like 100% foreign ownership, no corporate or personal income taxes, an absence of import tariffs, quick and easy registration, government relations and visa processing, and other benefits for tenants. Despite all those factors, Masdar's economic development is a lot slower than anticipated. Moreover, it has failed to attract residents and companies. Maybe focusing more on the people than business opportunities would have brought Masdar City to the successful development. For now, the city is a museum of innovative carbon neutral technologies and outstanding architecture.
Another government-led eco city project with a focus on business only and, therefore, a similar outcome is in China. Tianjin - £24bn – is a joint venture between the governments of China and Singapore. The city is worldwide famous for becoming a ghost town instead of being distinguished for its innovative cleantech solutions. It has been reported that, at the moment, the city has more than 50,000 residents and 3,500 registered companies. However, those numbers have been questioned. The Guardian and other sources find that city looks more like abandoned urban area with no people around. Officially, companies keep the post box in Tianjin while prefer locating their operational offices someplace else. Trying to find a solution, Tianjin has changed already four CEOs and is still looking for the way to attract life to the city.
There are more examples of newly built eco cities projects which have been fully governmentally-led and funded. Most of them have failed to fulfill expectations, not even mentioning return of investments. So is it sustainable to use taxpayers money to build new carbon neutral ghost towns? Let's see an example of better use of money by transforming existing megapolises towards zero footprint living.
The green business
The answer to the question of what went wrong with new Eco Cites can be found from the benchmark of existing green cities - Helsinki. Focusing Future has spoken with Deputy Mayor of Helsinki Pekka Sauri about the plans and current situation of the way towards a carbon neutral and climate resilient city. Initiative to make Helsinki a carbon neutral capital by 2050 and attract businesses to eco-development comes from the government. Finns know that sustainable development is not just an assignment – it is a lifestyle. Therefore, the concept of Eco City is not a separate project but is an inseparable part of the Helsinki's strategy. Sustainable eco-development of the city is a foundation of its master plan.
According to Pekka Sauri, one of the main checkpoints on the way to carbon neutrality is improving city’s mobility. The priority ranking for commuting in the city ideally looks like this: first – walking, second - cycling, third - public transport, and only the last one is usage of private transport. The municipality of Helsinki is ready to make its public transportation system affordable and attractive to all the residents. Administration of the city is developing innovating 'mobility on demand' system that integrates all forms of shared and public transport in a single payment network. Already today, less that 50% of Helsinki’s households own a private vehicle. The mobile application will perform as both journey planner and universal payment platform, routing the shortest way from point A to B. Moreover, carbon emissions will be listed for every route option. "Mobility on demand" will empower citizens to make a choice towards more sustainable future. Pekka Sauri says: ”The concept of mobility as a service is that you don’t have to possess a vehicle, but purchase a service of mobility. Route planner of the regional public transport organization is a basis of the mobility concept. Giving the whole travel chain and carbon emission for the trip.”
Another important issue that cannot be overlooked in the sustainable future is a waste management. As well as mobility service, it is built on the trust of smart choice of the citizens. Waste management in Helsinki is based on the domestic sorting of the household waste. Each building has own recycling rooms with a separate bin for each waste product. What is not recycled material is transported to the energy waste for district heating and electricity. The strongest and weakest link to the concept is a resident himself who is responsible for sorting the waste. It has been showed to be a very sophisticated sort of recycling system. The idea is not innovative, but important to mention for underlining that eco-development does not solely depend on government regulations and businesses but also on citizens themselves.
There are several programs for energy saving. For example, the Energy Saving Council started to work in Helsinki in 1974, right after the first oil crisis. It is one of the oldest energy saving municipal body in the world. Since that time the aim of the company has evolved from saving to efficient usage of electricity. Council finds ways of retrofitting old buildings and finding new ways of achieving energy efficiency. The city can retrofit only own building. For other real estate stakeholders, municipality provides assistance and support in energy efficiency. The projects have shown a spillover effect from the government initiative to the real estate business. For instance, there are some apartment buildings, which have opted to install the solar panels on the roof of the building. Even without city contribution, there is more and more of such project from private actors. Sustainability is a fast catching trend for Helsinki.
Deputy Mayor says that while initiative for sustainable development comes from the city administration, it would be impossible to achieve any results without cooperation with the business sector. City buys technologies needed for sustainable projects from private companies, which generates market for technology companies. At the same time, to boost the development, municipality of Helsinki has created an initiative called Climate Partners. It is a bridge between the municipality and businesses in the capital. Companies are members of Climate Partners network, which organizes a yearly conference to compare notes and share knowledge within the network. As a part of the initiative, municipality of Helsinki gives ideas and information for businesses on the investments in climate projects, which are most suitable for their particular business sector. Pekka Sauri comments: “This cooperation has shown to be a very useful way of networking between private and public sectors. We share experiences and information on that network. It is obvious that eco-development should be driven by business. If the market is not attractive, eco-development will simply not happen. By breaking the ice and sharing the knowledge, experimenting in different sustainability and smart projects with Climate Partners, the city hopes to create opportunities for business community.”
The foundation of all cities is its residents. If a city fails to offer a good living it will stay empty burying all the investments. It is important to make new carbon neutral megapolises attractive not only for businesses but also for those who will live there. Moreover, the funding should come from private sector instead of taxpayers money. It ensures more transparent and rapid development. Therefore, governments shall follow Helsinki's example and establish the connection with local companies creating the market for sustainable eco-friendly development.