11th Asia –Pacific Eco-Business Forum. Kawasaki, 4th February 2015

The Path to Low-Carbon Green
Growth: The Hard Choices MegaCities Must Make
Venkatachalam Anbumozhi アンブモリ
Economic Research Institute for ASEAN and East Asia (ERIA)
v.anbumozhi@eria.org

The Age and Birth of Mega-Cities
1900

People(Billon)

2010

2050

7.0

9.0

10%50%

75%

16

450

1.7% living
In cities

Cities> 1 million
600Economics of Mega-Cities in Asia
Metropolitan

Land Area (sq.
km)

Population in 2010(thousand)GDP per capita (US$)

BangkokJakarta
Metro Manila7,762
13,601
4,863

11,97024,10021,420

3,893
2,349
1,796

Ho Chi Minh
Kuala Lumpur

2,095
243

7,163
1,720

1,032
20,837

Yangon10,171

3,973

238

Hanoi
Phnom Penh
BandarSeri
BegawanVientiane

1,979
678
5,765

6,451
1,501
203

769
25,914

3,920

795

1,302

Ecology of Asian Mega Cities
 Engines of economic growth Cities produce 80% of theregion’s GDP
 Rich get richer while the poor
remain poor

 Huge ecological footprint Cities account for 67% of allenergy use and for 71% of all
greenhouse gases emissions

 Poverty & disparities are mostconcentrated & visible

Mega Cities As Tipping Point in Resource Consumption

Source: World Bank, 2011

Cities and Costs of Climate Change in Asia

Relationship Between Urbanization and Per-capita Carbon Emissions

Source: World Bank, 2011

Eco-Business Evolution in Advanced Economies
Sequence followed by developed countries like Japan
Povertyalleviation

high rural-urban migration,low per-capita income,low infrastructure investment= slums & squatter settlements,
inadequate access toinfrastructure & services

Industrialization

Mass production &consumptioneconomic growthprioritized overenvironmental managementtimeprosperous lifestyle basedon mass production,
consumption & disposal= air, water & soil pollution=large scale pollution &waste

Adapted from Bai & Imura, 2000

Eco- Business Evolution in Developing Countries of Asia
Challenges for Mega-Cities in Developing Countries of Asia
Poverty-alleviation
Industrialization
Mass production & consumption

high rural-urban migration,low per-capita income,low infrastructure investment= slums & squatter settlements,
inadequate access toinfrastructure & services

economic growthprioritized overenvironmental managementtimeprosperous lifestyle basedon mass production,
consumption & disposal= air, water & soil pollution=large scale pollution &waste

Adapted from Bai & Imura, 2000

Low-carbon Green Growth = Meeting the Trible Challenges

energy, industry,transport, urbanization
etc

Emissions

Conventional
GrowthLow-carbon growth

Economic growth
Accelerated Economic growth, Local Wealth Creation and Reduced Emissions
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Innovative Choice 1: Smart Transport
Transport Related Emissions from Asia

Source: World Bank, 2011

Innovative Choice 2: Waste to Energy
Per Capita Emissions and Waste Generation

Source: World Bank, 2011

Innovative Choice 3 – Smart Housing
Urban density and Carbon Emission

Source: Accenture, 2011

Low - Carbon Pathways for the ASEAN Cities
A liveable low-carbon smart city
• Easy access to quality and affordable
infrastructure• Availability of quality services• Improved social cohesion and safety

Liveable,
low-carbon,
smart city

• Smart economy• Smart mobility• Smart governance•Emission intensity decoupled from economic
growth•Use of Renewable Energy Techonologies•Energy Efficiency optimized
http://www.smart-cities.eu/model.html

Designing low carbon Green Growth for
Megacities in ASEAN – Sectoral Plans
ENERGY• Access to quality, reliable energy services• Use of low carbon technologies
TRASNPORT• Efficient public transport system• More rapid transit system• Smart transport e.g. electric vehicles
HOUSING• Available and affordable housing• Living near to work, minimising vehicle commuting• Energy efficient building through codes and regulations
WASTE• Availability of waste management services• Sustainable waste management practices• Viewing waste as a resource

Designing low carbon Green Growth for Megacities –Sectoral Plans
WATER• Availability of safe water for all• Smart and efficient water use, e.g. rainwater harvesting
ICT• Access to quality digital communication system• Services, e.g. health care, are optimised using ICTFOOD• Availability of quality and affordable food• Maximising home grow food
• Changing food habit to low-km-food
HEALTH• Access to quality and affordable health services for all• Encouraging healthy community – open space, bicycling

Hard Choice: Case of Smart Transport in Jakarta
Key questions:• How to promote the modal “Shift”
from private cars to public
transportation?
• What are the levels of “shift” todifferent measures to improve thepublic transportation?
• How much energy savings could beachieved?

Case setting (improve in BRT operation) for thesimulation analysis

Estimated rate ofmodal shift by case(high rate of the“shift” can beanticipated)

Case study in Jakarta: Tangerang toDowntown

Estimated reduction in oil
consumption(modal shift & smoothertraffic will reduce oil
demand)17

Hard Choice: Smart Transport in Jakarta
Key Observations: Accessibility and economic attractiveness arekeys to promote the modal shift.
 Extend/expand public transport network
 “Rapidness” of public transport will increase its attractiveness.

 Mega-city requires Mass Rapid Transit (MRT)such as metro that has their dedicated lines tomitigate car traffic congestion, and thus oil
consumption.
 BRT is also effective as a short to mid term measure.

Policy Implications:
The urban transport issue shall be part of energy policy.
Comprehensive measures required. (the ASIF approach)Long-term planning (policy + infra.) and implementation are thekey.
18Green Technologies and Services Made in Japan

19Source: Nippon Keidanren (2010)

Hard Choice: Managing the Investment Risks

Country Risk

Political Risk

Economic Risk

Investment
For Low-Carbon Cities

Market Risk

Project SpecificRisk

Policy &Regulatory Risk

Currency Risk

Financial Risk

7 Step Approach to Optimize Hard Choices

Public and Business Areas for Optimized Choices

Public area

ADVISORYSERVICESREGULATION &LEGISLATIONBE

AC
Info./Demo.

Marketing

DEVELOP MARKET

Full Business area

DINNOVATIVEFINANCING

Formal and informal Approaches are needed for Optimising theInvestment Decions on Hard Choices

InformalFormal

 An informal dialogue provides flexibility and vitality• Suitable for brainstorming and information sharing• Can generate a high degree of trust and understanding
between business and governments• Often focused on specific topics

 Formal processes provide longer term solutions• New formal bodies on finance and technology
would benefit from a formal advisory structure
including the private sector
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Reach us at:
Economic Research Institute for ASEAN and East Asia (ERIA)ASEAN Secreteriat Lt. Mezzanine
70 Jl. Sisingamanaraja, Jakarata Seletan 12110
Indonesia
Tel : +62.811.910.6874|

Fax : +62.21.5797.4465

Email : v.anbumozhi@eria.org|

Website : www.eria.org

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