How to emerge stronger with smart and sustainable cities

Governments and other stakeholders must collaborate on green projects and address challenges to shape sustainable economic recovery.

In brief

• As urbanization accelerates and cities grow, environmental and climate risks must be managed alongside economic growth.
• While there are many opportunities in clean energy development and management, private investors are held back by barriers, such as regulatory uncertainty.
• Strong government leadership and consistent, coordinated action from various stakeholders are critical to addressing these challenges.

Economic growth can no longer be pursued at the expense of addressing climate change and environmental degradation. The theme of this year’s World Cities Summit, “Liveable and Sustainable Cities: Emerging Stronger”, aptly reflects this urgent and important imperative.

According to a new report from the Intergovernmental Panel on Climate Change, Southeast Asia is one of the most vulnerable regions to climate change. At the same time, the region is also expecting an urban population surge of 90 million by 20301, and about two-thirds of Asia’s population is projected to be urban by 2050.2 What this means is there will be an increasing burden on existing infrastructure systems and escalating stress on the environment.

How can Southeast Asia build cities that are both smart and sustainable? A focus on four principal areas is key: citizens, technology, collaboration and resilience.

Firstly, governments should take a citizen-centric design approach when addressing problems in services and processes — essentially, develop solutions that prioritize the needs and experiences of the people who use them. Secondly, technology is the key enabler to harness digital power as a growth catalyst and improve user and citizen experience. Next, effective collaboration among the government, businesses, investors and the community is necessary for codesigned projects to be funded and delivered. Finally, governments must plan for long-term economic resilience so that cities survive, adapt and thrive against the impact of stresses and shocks such as climate change.

Capturing green opportunities for sustainable cities

As urbanization accelerates and cities grow with the expected post-pandemic economic recovery, environmental and climate risks must be managed simultaneously.

To that end, governments around the world are tapping into an arsenal of policy interventions and financing measures to support the transformation of sectors (especially energy and industrial), improve energy efficiency and tackle environmental pollution. Many are adopting a carrot-and-stick approach, including green taxes on harmful environmental activities, tighter regulations as well as new environmental standards and certification for energy performance, emissions and pollution. Subsidies and tax rebates are used to boost demand for green products and services such as electric vehicles, solar panels and renewable energy. Loans and grants are also provided to promote green investments in sustainable agriculture, renewable or low-carbon energy sources, energy-efficient buildings, transport and public infrastructures. 

Governments are also offering subsidies and grant funding to research institutes, academic institutions and private investors to boost innovation and develop transformative technologies in renewable energy, carbon capture, waste management and energy efficiency. 

Private investors can participate in a wide array of green projects or collaborate with governments on them. For example, an EY study commissioned by the European Climate Foundation, Green recovery opportunities in Southeast Asia, Japan, South Korea and Taiwan, found a pipeline of over 800 clean energy projects with a total investment potential of US$316b. These plans present a multitude of opportunities in clean energy development and management for the private sector. Yet, private investors are held back by various reasons.