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strategy and business
 / Autumn 2010 / Issue 60(originally published by Booz & Company)


Reinventing the City to Combat Climate Change­

Policymakers should view the projected $350 trillion in global spending on construction, operation, and maintenance of urban infrastructure over the next 30 years as an opportunity for their cities to become early adopters and investors in transformational solutions — and, by extension, to create healthier and more sustainable lifestyles.

Our analysis has shown that the most successful cities tailor their sustainability approach to their unique resources and challenges. Although developed cities may choose energy-efficient technologies that work with existing infrastructure, smaller cities in developing nations can use their developmental window of opportunity to invest in ambitious energy models that capitalize on their particular energy assets. Cities in Africa, for instance, can leverage solar technology better than those in Ukraine, which may instead rely on wind power.

“If you identify what your city has and what it can use,” says Malmö’s Trevor Graham, “then you can actually get it to work.” For its part, Malmö harvests its natural wind energy and generates 50 percent of its heat from the city’s waste. Similarly, in France, the city of Lille turns biomass into enough methane gas to power about a third of its buses.

The city of Dezhou in China’s northeastern Shandong province is a testament to harvesting the power of the sun. The city’s roofs are a landscape of solar panels; everything from buildings to tourist carts is powered by photovoltaics. Dezhou’s solar technology helps cut down on greenhouse gases and is already highly cost-effective: A solar heater pays for itself in just over five years and costs nothing to operate afterward.

Dezhou’s commitment to solar technology has done more than provide the city with environmental benefits; it has spawned a vibrant green industry. In fact, the early adoption of green technologies allows cities to serve as entrepreneurial hubs, creating both jobs and tax revenues. In 2007, the solar industry in Dezhou employed 800,000 people — a figure that is expected to nearly double by 2020. Dezhou is home to the world’s largest solar water heater manufacturer, Himin Solar Energy Group, with 2007 profits of nearly $10 million. It was Huang Ming, the Himin Group’s founder and CEO, who proposed the Renewable Energy Law of the People’s Republic of China, passed in 2006, which laid the foundation for China’s climate change strategy. Companies such as the Himin Group are reducing China’s reliance on coal and creating a template for transformational technology and green entrepreneurship.

Transformational technologies create a win-win situation in global environmental protection and local development needs. For example, the Chinese city of Baoding, with a population of 11 million, is building its economy by providing clean technology to other cities. Solar photovoltaics, wind power, and other energy-efficiency industries have been a major source of Baoding’s green growth engine for the past five years. Baoding, dubbed the Green Electric Valley of China, has seen its green energy companies expand from 64 in 2005 to 200 in 2008, and its green revenues quintuple in the same period, from $700 million to $3.5 billion. At the same time, these companies created 13,500 new jobs.

Although the city’s green industry does produce carbon emissions, preliminary findings from the WWF’s local chapter show that the solar and wind energy products the city had manufactured by 2008 — which have been installed globally and are providing energy that otherwise would have been produced by fossil fuels — will, in use, reduce global CO2 emissions by a greater amount than the entire city of Baoding itself produces.

As they adopt such green technologies as solar heating, cities of the near future will most likely have a smart grid at their hub, allowing electricity to flow where it is most needed. Electric vehicles could be connected to the grid, storing energy when a surplus is produced and feeding the grid when there is an energy deficit. Buildings could serve as both housing and power plants.

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  1. Stewart Brand, “City Planet,” s+b, Spring 2006: How the profound consequences of increasing urbanization are changing the way we think about demographics, cultural vital­ity, and economic development.
  2. Viren Doshi, Gary Schulman, and Daniel Gabaldon, “Lights! Water! Motion!s+b, Spring 2007: Rebuilding the world’s urban infrastructure can be done only by integrating energy, transportation, and water.
  3. Peter Senge, Bryan Smith, and Nina Kruschwitz, “The Next Industrial Imperative,” s+b, Summer 2008: Why facing up to climate change requires a revolution in business thinking.
  4. World Wide Fund for Nature and Booz & Company, “Reinventing the City: Three Prerequisites for Greening Urban Infrastructure,” (PDF) March 2010: More analysis and ideas on why we need to aggressively pursue urban sustainability.
  5. For more thought leadership on this topic, see the s+b website at:
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