creating resilient cities for the future
The built environment remains a major contributor to energy-related emissions. Image: Canva.
  • 77 million urban residents may be forced into poverty due to climate change
  • 39% of global energy-related emissions come from the built environment
  • Experts say recent extreme weather in Australia is "... a clear indicator that our climate is becoming more unpredictable and hostile"

By 2050, 68% of the world’s population is projected to live in cities, which is almost seven billion people.

As cities across the globe continue to expand, the pressure to meet the needs of our growing population and balance that with environmental, social and economic impacts grows too.

According to Selina Short, Managing Partner Real Estate Oceania at EY, the biggest issues impacting the future of humanity and the planet will play out in our urban environments.

That means investing in a resilient future for our cities is critical.

On top of the well-known and long-term challenges related to climate change, Niels Holm-Nielsen, Practice Manager, Global Facility for Disaster Reduction and Recovery at the World Bank says that disasters such as floods and earthquakes hitting densely populated areas will only magnify issues for our cities.

“Poorer populations are particularly vulnerable,” Mr Holm-Nielsen said. “As they often lack basic services and land rights, inhabit more hazard-prone places, and are ill-equipped to prepare for, respond, and recover from economic or environmental shocks.

“According to the World Bank’s Investing in Urban Resilience report, 77 million urban residents may be forced into poverty due to climate change.

“As just one example, fishing communities in Vietnam are being forced out of their homes by sea level rise, harming not only their residences and economic futures, but the sustainability of the wider economy as well.

“Natural hazards thus undermine the social fabric of urban communities while driving larger-scale disruptions, increasing population displacement and undermining national economic stability.”

niels holm nielsen
Niels Holm-Nielsen

Ms Short agrees, stating that the floods, fires and other extreme weather events we’ve experienced here in Australia over the last few years are a clear indicator that our climate is becoming more unpredictable and hostile.

“Our cities must be built to bounce back from acute shocks,” Ms Short said.

“But we can’t forget the chronic stresses that also erode our quality of life, like housing affordability, for example. A resilient city is one that is built to withstand both acute shocks and chronic stresses.”

The Intergovernmental Panel on Climate Change says greenhouse gas emissions must be halved this decade if we are to limit the most catastrophic effects of climate change.

“Despite two decades of concerted effort from Australia’s property and construction industry, the built environment is still responsible for around a quarter of our national emissions,” Ms Short said.

“Globally, the statistics are more dire – 39% of global energy-related emissions come from the built environment. We have a huge task ahead of us.”

In terms of short term challenges, Ms Short advises that Australia’s cities also need to adapt to a new geography of work.

“Flexible working has reoriented activity away from our CBDs and if we don’t manage the evolution carefully we could be faced with a huge economic and opportunity cost,” Ms Short said.

“Around 15% of the nation’s jobs are generated in our CBDs, for instance, and every $1 spent on entertainment in our CBDs generates $2 of local economic activity. And all those skyscrapers that cluster in our CBDs are tied up with our superannuation.”

Ms Short says that building resilient cities is a multi-layered challenge – and that means embracing complexity to solve multiple problems at the same time.

“How can we address housing affordability and energy efficiency simultaneously? How can we build safer streets that are EV-ready? How do we address the urban heat island effect and create vibrant CBDs?

“We already have solutions to these questions, and this is where we should be directing investment,” Ms Short said.

Future-proofing infrastructure

According to Mr Holm-Nielsen, we need to be investing in urban infrastructure, whether networked services such as roads and pipes, buildings such as homes and workplaces, or green infrastructure like the tree canopy – while prioritizing infrastructural resilience to climate change and disasters which helps cities secure livelihoods and employment, human capital development, and municipal budgets.

“As natural hazards disproportionately affect vulnerable residents, initiatives that enhance social resilience – by helping people prepare for and recover from disasters – are critical in ensuring socioeconomic resilience for all, rather than just some urban residents,” Mr Holm-Nielsen said.

“As countries ramp up their efforts to reduce emissions in line with their climate mitigation pledges, the accompanying economic transition presents unprecedented opportunities for cities to bring new climate mitigating technologies and practices to their populations to help adapt to more extreme weather events.

“A city is most resilient only when its most vulnerable communities are well prepared and protected against climate change and disasters.

“With national transitions from fossil fuels to renewables, cities must seize on green transformation opportunities and reduce the exposure of poor residents, migrants, refugees, and other vulnerable populations.”

In terms of where investment should be focused to build more resilient cities, Mr Holm-Nielsen says that the initial step starts with inclusive strategic and resilience planning processes which identify the most appropriate investments for resilience building.

“Many countries have unveiled national climate action plans,” Mr Holm-Nielsen said. “It is crucial to equip local governments, too, with the tools for both mitigation and adaptation and elicit their inherent contextual expertise to address local challenges.

“Resilient infrastructure often is the bedrock of lasting urban growth. Planning must highlight the extent of new investments needed in infrastructure to sustain the healthy functioning of a city and reduce negative externalities (such as the air pollution of urban transport) in the face of growing climate change and disasters.

“Achieving the right balance of grey and green nature-based solutions can further help cities maintain resilience as the climate changes.

“Sufficient investment must also be devoted to infrastructure’s ongoing maintenance needs, as upkeep can be quicker to implement, effective at adapting resilient infrastructure to changing conditions, and efficient on municipal budgets.”

ESG guides investment

In terms of global investment trends, Ms Short points to the importance of ESG – environmental, social and governance factors as having been pivotal to investment decisions for several years now.

“As just one illustration, the European Commission has just outlined new obligations for large companies to ensure that their activities and those of their supply chains comply with human rights and environmental sustainability criteria,” Ms Short said.

“This will mean these companies will have a ‘corporate duty to identify, prevent, mitigate and account for external harm resulting from adverse human rights and environmental impacts’ in their operations, as well as those of their business partners and their supply chains.”

Selina Short EY
Selina Short

In a globalised world, legislation in other parts of the world inevitably impacts Australia’s property and construction industry.

“Investors are getting ahead of the game. For example, EY’s 2021 Global Institutional Investor Survey found 74% of the 324 investors surveyed had disinvested in companies with poor ESG positioning,” Ms Short said.

“The message is loud and clear: investors want to know their investments are future-proofed.”

In terms of low- and middle-income countries, the World Bank Group is the world’s largest financier of climate adaptation, in recognition of the need to invest in people, systems and infrastructure to achieve urban resilience.

Since the World Bank started tracking climate finance in 2011, it has invested over $56 billion in climate adaptation worldwide. The Bank invests about 6 billion dollars in urban development and resilience projects every year, in four key areas: in infrastructure to achieve physical resilience, in governance systems to achieve institutional resilience, in people to achieve resilient communities, and in financial systems to achieve financial resilience.

The Bank has committed to support national and local governments to develop, finance, and implement solutions that reduce emissions, build resilience, and promote shared prosperity in cities, highlighting planning for low-carbon and resilient cities, green buildings, and integrated waste management and circular economies.

Closer to home, Infrastructure Australia has released sustainability principles to guide the assessment of infrastructure business cases and the Infrastructure Sustainability rating scheme has influenced sustainability outcomes on $92 billion of infrastructure projects.

Ms Short says this is evidence that sustainable, resilient infrastructure is possible.

“We just need every piece of infrastructure to be assessed with resilience in mind, and then we need to move quickly to build resilient, sustainable infrastructure at scale and pace,” Ms Short said.

However, Ms Short warns that Governments simply don’t have the funds to finance climate adaptation and mitigation efforts on their own.

“Consider just two eye-watering statistics. The International Energy Agency estimates that we will need to spend around US$5 trillion a year to meet our de-carbonisation goals and the World Bank says we’ll need $100 billion a year for adaptation and resilience,” Ms Short said.

“Public Private Partnerships with sustainability and resilience embedded into their frameworks can harmonise public and private sector goals.”

Mr Holm-Nielsen cites the Global Facility for Disaster Reduction and Recovery (GFDRR) as a major supporter of urban resilience globally, through the provision and funding of technical assistance, research and analytics, knowledge management, and partnership building.

Since 2010, GFDRR has funded close to $200 million in grant resources, leveraging over US$12.7 billion in lending. The City Resilience Program (CRP), housed within GFDRR, is the World Bank’s dedicated team for enhancing urban resilience operations.

The Program helps cities to identify and target their key resilience challenges and solutions from a multi-sectoral perspective, where the different silos of a city’s management can agree on priorities. It helps to improve the design of projects so that they genuinely address resilience needs. And it brings in more financing possibilities to ensure that projects deliver the greatest possible benefits.

The CRP has so far engaged over 175 cities in over 75 countries to increase their access to tools and technical support, increase their access to sources of financing, and leverage global partnerships to plan for, invest in, and support their resilience objectives.

Ms Short ends by reminding us all of the fact that cities are built for people.

“People increasingly expect a forward-looking, holistic approach to infrastructure investment,” Ms Short said.

“EY’s latest Future Consumer Index, for example, found 60% of Australian consumers are determined to reduce their emissions, and 80% are committed to living more sustainably.

“Furthermore, 67% of consumers we surveyed expect organisations to step up as leaders in driving positive ESG change.”

It seems the pathway forward is clear in terms of the investment priorities for more resilient cities.

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