Every day, the world’s urban population swells by 200,000. At this rate, more than two thirds of us will be city dwellers by 2050 compared with just over half today.UN World Urbanisation Prospects, May 2018
Urbanisation is typically considered harmful for the planet. This is especially the case when cities already generate three quarters of greenhouse gas emissions and half of global waste.
Yet properly planned and managed, the expansion of cities has the potential to yield a number of environmental and societal benefits, cities are more efficient than rural areas – more than five times on a certain measure – as agglomeration increases productivityAsian Development Bank, 2016. This can help create jobs, reduce poverty, provide better health and education and foster culture and innovation.
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Cities are responsible for more than 70% of carbon dioxide (CO2) emissions
Source: IPCC, March 2023,
www.ipcc.ch/report/ar6/wg3/chapter/chapter-8/
City planners and builders are already harnessing a number of innovative clean technologies and smart solutions to tackle urban challenges that should in turn become a template for the rest of the world to solve its environmental problems.
Participants at The Klosters Forum (TKF) this year discussed ways in which cities are pioneering in the adoption of innovative and commercially viable solutions to reduce emissions and build resilient foundations for the coming decades.
© 2024 Menah Wellen
During three days of intense discussions that took place in the Swiss mountain town of Klosters, delegates – including investors, entrepreneurs, policymakers and urban planners – explored promising ideas and best practices for urban carbon sinks, smart cities, the role of big data and nature-based solutions.
Feeling the heat
In the session “Financing the transition towards sustainable and resilient cities”, representatives from Pictet Asset Management (AM) explained why cities provide early warning systems of change.
“Many of the problems society is facing show up in cities first because of population density,” said Ivo Weinöhrl, senior investment manager in thematic equities at Pictet AM. “With so many people living in a small space, you get an amplifier effect because we have air and noise pollution, congestion and the heat island effect.”
Take climate change. Global temperatures are expected to rise at least 2.5°C on average above pre-industrial levels this century, far above the Paris Agreement goals.UN Emissions Gap Report, November 2023 Yet cities could experience much worse. TKF delegates heard that the increase could be as much as 8°C in urban areas.
“Places like London will typically experience 40°C temperatures. These are not far-flung futures,” said Indy Johar, co-founder of Dark Matter Labs, a global non-profit focusing on societal transitions.
“Remember, cooling is 10 times more difficult than heating.“
Extreme weather events, such as this year’s searing heatwaves in Delhi and deadly floods in Dubai, stretch cities’ infrastructure beyond breaking point. In June, a major power outage hit Balkan states after temperature soared near 40°C, shutting down traffic lights, halting water pumps and leaving people sweltering without air conditioning.
© 2024 Magnus Arrevad
“Once-in-a-century events are now happening every year,” Erion Veliaj, Mayor of the Albanian capital of Tirana, told TKF participants.
Carbon removal
As worrying as these threats are, city planners aren’t short of options to address them. Climate adaptation and mitigation technologies abound, and many work especially well in urban settings.
Delegates heard how the removal of carbon dioxide from the atmosphere is becoming a viable solution, and potentially commercially attractive too.
There are a number of ways to remove carbon from the air. The most traditional carbon removal solutions consist of tree planting, while more sophisticated nature-based versions include enhanced rock weathering (ERW). ERW is a strategy that spreads crushed volcanic rocks on land to accelerate the natural process of “weathering” – or the creation of a permanent CO2 sink – from millions of years to just decades.
Newer techniques involve directly capturing carbon from the atmosphere. Direct Air Capture (DAC) filters carbon dioxide from the air and stores it in liquid or solid form.
DAC doesn’t come cheap. Typical levelised costs – a measure of the average present cost over its lifetime – are estimated to be around several hundreds of dollars per tonne of captured CO2, more expensive than nature-based alternatives. Yet investors are betting that this technology will soon scale up.
Carbon Removal Partners is a Zurich-based venture capital firm which assesses carbon capture start-ups globally. Its fund holds a stake in Switzerland’s Climeworks – which operates and develops DAC plants around the world.
“On the path towards a net zero economy, we will create an industry of the size of the oil and gas sector today. The Carbon Economy is an economy that captures, stores and utilises CO2 and constitutes a trillion-dollar market opportunity,” Max Zeller, founding partner of Carbon Removal Partners, told TKF delegates.
Biodiver-cities
TKF participants also discussed less industrialised and tech-heavy methods of solving urban challenges. Specifically, they focused on ways in which cities can incorporate nature and harness ecosystem services – such as pollination, provision of clean air, food and fresh water and flood prevention.
These adaptation methods are known as nature-based solutions (NbS), designed to protect and restore nature, address environmental and societal problems and increase resilience at the same time.
Some of the real-life NbS examples participants shared included tree canopy, timber buildings, green walls, municipal farms and pocket parks – all of which are proven to reduce emissions and pollution, provide cooling, water retention and flood prevention, while improving social well-being and enhancing urban resilience.
© 2024 Magnus Arrevad
NbS for infrastructure are estimated to be 50 per cent cheaper than traditional man-made infrastructure and provide 28 per cent added value – including decarbonisation of the built environment, climate resilience, land value capture and job creation.World Economic Forum, January 2023
The use of timber in cities, in particular, is becoming more popular as new technologies like cross-laminated timber (CLT) and changes in building codes allow architects to swap concrete for wood even in skyscrapersPictet Group, February 2024. For more, see https://www.pictet.com/global/en/insights/am/bringing-timber-to-the-masses. It’s also a growing market – the global CLT industry is forecast to expand at nearly 15 per cent on a compound annual basis by the end of this decade from the current USD1.1 billionGrand View Research, 2023.
The UN estimates that investing in nature-related targets – such as nature restoration, the efficient use of resources and reducing water and air pollution – will help plug an estimated USD7.4 trillion gap in natural capital by 2030 and have the potential to deliver more than 20 times return on investmentUN Environment Programme, June 2024, https://www.unep-wcmc.org/en/news/funding-nature-related-sustainable-development-goals-would-deliver-more-than-20-times-return-on-investment-study-shows.
“There’s no net zero future without including nature in cities,” one participant told the session.
Circular cities
TKF delegates also heard that cities must fundamentally change the way they draw on natural resources.
We need to start thinking about becoming sustainable and net zero but also moving into a regenerative, net positive view of the world which is needed if you want to repair some of the damages.
As the number of apartment blocks, offices, roads and bridges, expands to accommodate a growing urban population, the extraction of the world’s natural resources is expected to rise by 60 per cent by 2060.UN Global Resources Outlook, March 2024
For certain resources, the increase will be much steeper. Take lithium and cooper, both of which are critical to the green transition. Meeting the 2050 net zero goals will lead to a five-fold increase in mineral demand. This is likely to compound the environmental problem as energy-intensive mining activity is a significant contributor to the world’s carbon emissions and biodiversity loss.World Bank, June 2022
To consume more sustainably, participants called for a drastic reappraisal of resource value.
Dark Matter’s Johar said the problems facing the infrastructure industry were similar to those confronting fast fashion. For example, an ordinary shirt costing EUR40-50 could see its true retail price rise 5-9 fold if the environmental and resource cost was properly taken into account. We need a similar cost analysis for city infrastructure as well as ecosystem services, he says.
“Currently, we operate in an economy where there is significant arbitrage between what we price and what has systemic value. Operating and investing into that arbitrage is the greatest opportunity and need for our generation,” Johar said.
“We need more transparency. Trees, plants, and soil are the real critical assets that need to be incorporated into the balance sheet. Even a city, where materials are reused, should be considered an asset class.”