Proceedings of “South Asian Regional Conference on Transition towards Sustainable Development”

Organized by IHDP-IT and TERI, February 10-11, 2003. New Delhi.

Transitions in Urban Energy and Environment: Perspectives from the South-

Asian Conference

Shobhakar Dhakal
Institute for Global Environmental Strategies (IGES)

Norman W. Garrick
University of Connecticut

Transitions in the urban energy and environment

Industrial Transformation research explores ways to decouple the link between economic
development and environmental degradation in order to lead to a more sustainable pattern
of development. The city research agenda of the Industrial Transformation Project
addresses transitions in urban energy issues, urban transportation, and urban water
resources. The research focus is on studying production, consumption, and macro systems,
with the goal of fully understanding and characterizing urban transition. In addition, incentive
structures are studied in order to address the question of how to re-orient the current path of
development to a more environmentally friendly path by intervening through institutional,
technological and societal structures.

The Asian context

Due to a rapid rate of economic growth, unprecedented changes are underway in Asian
cities in terms of life style, consumption activities, and pressures on the environment. These
pressures of growth create a pressing need for a paradigm shift achieved through changes
in production and consumption systems and through innovative policies to guide future
growth.

In some ways, the Asian way of urbanization is different from the experiences of the
developed countries in Europe and North America. Asian cities tend to be bigger and more
compact than the cities in Europe and North American. The United Nations Population
Division's estimate for 2000 shows that ten out of the sixteen world mega-cities (cities over
ten million population) are in Asia (2001 revision)1. Projections show that there will be twelve
Asian mega-cities in 2015 out of the expected twenty-one mega-cities worldwide. A boom in
medium-scale cities (cities with 1-10 million population) is also expected in Asia by 2015.
With the current cities expanding and additional cities emerging, policymakers and city
managers in the region are in serious need of a better understanding of urban systems and
strategies for effective interventions to control and guide current trends.

Energy plays a vital role to the current debate on sustainability, since extraction, production
and consumption of energy resources are the primary cause of local as well as global
environmental adversities, including air pollutants and the emission of greenhouse gases.
Cities face a dual treat: the health impact of local air pollutants as well as impacts resulting
from global environmental changes. Since cities are the engine of economic growth, and
economic growth is strongly co-related with increasing fossil energy use, often it is difficult to
argue that policy makers should restrain energy use, especially in rapidly industrializing
cities. Nevertheless, energy use can be decoupled from economic growth especially in the
area of energy use for transportation.

Globally about one third of urban energy consumption is expended for transportation. In
Asia, per capita energy use for transportation is amongst the lowest in the world – USA cities

1
World urbanization prospects 2001 revision, United National Statistical Division.
on average used FIVE times more energy per capita for transportation than Asian cities. In
contrast, European cities use only one-and-a-half times more energy per capita than Asian
cities.2 These differences are mostly attributable to the much more widespread use of
private automobiles in the USA compared to Asia and Europe. Consequently, one of the
biggest challenges faced by developing Asia cities is the growing reliance on automobiles
and, perhaps more troubling, the changes in the urban form towards a pattern that fosters
the need for automobile travel. Cities like New Delhi already show signs at its edges of
following the American pattern of sprawl and decentralization which is chiefly responsible for
the high per capita use of energy for transportation in the USA. However, there are many
good models of cities in Asia, which have taken steps to decouple transportation energy use
from economic growth. One such example is Singapore where Newman and Kenworthy2
report that the transportation energy use per dollar of Gross Regional Product (GRP) is 1.40
MJ/$ compared to an average of 3.81 MJ/$ in other large East Asian cities (for comparison
the average is 2.38 and 0.83 MJ/$ in the USA and Europe, respectively). The potential
strategy for decoupling energy use is based on policies that promote and foster the use of
public transportation in urban centers and that direct urban growth in ways that promote
strong, multi-use centers of activities.

Income-environment relation in cities

Cities are dynamic systems. Like the human body, they can be characterized by
"metabolism" where energy and materials are used as input and waste as output. In this
process, waste production is a function of various driving forces and their interactions. The
risk to citizens from exposure to waste is the prime concern for policy makers. Research has
demonstrated that risk perception varies with income level and urbanization among other
factors.

The World Bank (1992) has outlined the following three levels of urban environmental
problems that correspond to different levels of economic development: (1) poverty related
issues (such as safe water and sanitation) (2) industrial pollution related issues (such as PM
and SO2) and, (3) consumption related issues (such as solid waste and CO2 emissions)3.
However, this study does not mention much about the chronological evolution of those
issues over time or with income growth. Bai and Imura (2001)4 hypothesizes and shows that
in selected cities, cities proceeded through these stages, (1) poverty stage, (2) industrial
pollution stage (3) consumption stage and (4) sustainable eco-city stage. These models
provide a picture of how highly industrialized cities have evolved, however a careful
examination is needed of the factors, other than income, which might have contributed to
this environmental transition. Without this background we have no sound theoretical basis
for predicting the environmental transition of cities that are currently undergoing
industrialization. In particularly we need to be cognizant of the following factors in cities that
are transitioning to industrialization:
• The three levels of environmental problems discussed by the World Bank (1992) are
occurring simultaneously in Asian cities rather than in stages, due to the existence of
different income class created by large income disparity among urban dwellers
• Income is only one factor in a large set of factors (political, cultural, societal,
economical, geographical and urban management) that determine the dynamics of
urban environmental transition and the associated environmental burdens from
energy consumption.

2
Newman and Kenworthy, Sustainability and Cities, Island Press, 1998.
3
World Development Report 1992: Development and Environment, The World Bank, Published by Oxford
University Press, New York.
4
Bai, X. and H. Imura (2000). A comparative study of urban environment in East Asia: Stage model of urban
environmental evolution. International Review for Environmental Strategies, Volume 1, Number 1, pp 135-158.
Published by Institute for Global Environmental Strategies (IGES).
 • Evolution theory, such as that discussed above, implicitly supports the hypothesis
that the transition of cities follows some fixed or pre-defined path, which in itself is not
convincing and policy implications from such analysis is difficult to use in a practical
sense. In reality, each city evolves differently due to a unique set of internal and
external factors. IIED (2001)5 affirms that historical transition cannot provide a model
for future urban development when global resources are being depleted and when
other conditions are evolving.

As an alternative to evolutionary theory, McGranahan et al. (2001)6 presents a model of

urban environmental transition, in which the severity of local, regional and global issues are
compressed together rather than treated in stages. This focuses attention on shifting
environmental burdens from the local to the global, from the immediate to the delayed and
from issues that threaten health to issues that threaten life support systems.

“Decoupling” and the role of incentive structures

Many past studies have tested the validity of the Environmental Kuznet Curve (EKC) with
different set of environmental adversities. The validity of EKC seems reasonable for
industrial air pollution, particularly SO2 emissions. Even if the EKC may be valid at the
national level, their applicability in the context of a city is subject to many factors. Firstly,
cities do not have well defined boundaries and their interactions with other places are very
intense and not well documented. There is the real problem of getting reliable data to check
validity or to set a boundary for the city. Secondly, there is a growing trend to relocate major
industries away from densely populated areas; what remain in a city are commercial
activities, service industry and the activities that put a greater emphasis on mobility,
infrastructure development and households. One of the major sources of air pollution in
most cities, especially in South Asian cities, is urban transportation and industries which are
often entangled with income class and urban poverty; thus an EKC relation between income
and environmental adversity is difficult to establish at the level of a city.

The major reason for this anomaly is that when income grows, not only is the scale of growth
important but also the nature of the growth. This question of "How did income grow?" is the
one that is responsible for the transition in terms of the relation between income and
environmental adversity. This places emphasis on two important aspects of development: (1)
the dynamics of the urban transformation process, their evolution, and distinctive internal
and external features; and (2) the responses from the policy makers. These two issues
simultaneously affect the income-environment relation.

Thus urban environmental problems from energy use are strongly tied to urban
management. When environmental problems occur, most policy makers try to solve
immediate issues without paying enough attention to the underlying causes. This is true all
over the world, but perhaps more so in South Asia, where policy implementation is either
weak or does not exist - or the policy itself is not well formulated to address the problem.
Therefore, there is a wide variation in environmental problems between cities with similar
income level; a well-managed city with medium or low income may be significantly different
from a similar city with poor urban environmental management. Good policies and better
urban environmental governance can do miracles. The research on incentive structures of
Industrial Transformation Project addresses these issues.

5
IIED (2001). Urban environmental improvement and poverty reduction. Report prepared by International
Institute for Environment and Development (IIED) for Danida, London.
6
The Citizens at Risk: From Urban Sanitation to Sustainable Cities. Gordon McGranahan, Pedro Jacobi, Jacob
Songsore, Charles Surjadi and Marianne Kjellen, Earthscan Punlications Limited, 2001.
Cities are confronted with the dual tasks of economic development and environmental
protection, yet they tend to give policy priorities to immediate, local issues and to regard
issues such as global warming as long term, distant threats. In fact, municipal policies to
reduce energy consumption will bring multiple benefits to the community. It will help solve
air pollution and traffic congestion problems, and will also facilitate the reduction of global
problems. There are many technology and non-technology management options by which
the decoupling of the environmental implication of energy use and economic growth is
possible. For example, in Japan, the decoupling in 70’s and 80’s was largely the result of
environmental regulation dealing with end-of-pipe, and process enhancement7.

Issues and concerns in the current development paths and transitions

Mapping key physical issues

The major energy, environmental and transportation issues in South Asian cities include
increasing energy use, CO2 emissions and localized air pollutant emissions (especially
PM10 and dust whose concentration far exceeds WHO guidelines) along with rapid
motorization, growing traffic congestion, and increasingly overburdened public transportation
systems.

Two and three wheelers, the majority of which are run on two-stroke engines, dominate
south Asian cities. In recent years some efforts have been made in cities such as Dhaka,
Kathmandu and a few others to phase out two stroke two- and three-wheelers. In the quest
for cleaner air for citizens, the judicial system has been forced to intervene in ordering the
use of CNG in public transportation in New Delhi. There is currently an effort underway
towards CNG conversion for three-wheelers in Dhaka. In Kathmandu, battery operated
three-wheelers have replaced smoke blenching diesel three wheelers for commercial
operations. These changes represent some transition towards cleaner vehicles and fuel.
However, at the moment the role of cleaner vehicles seems to be largely limited to niche
sectors.

The improvements in public transportation systems are progressing at a slower pace in the
region in general. At the moment when private vehicles are increasing at alarmingly high
rate, the efficiency and coverage of public transportation remains poor. Traffic management
and road conditions couldn’t improve at the pace of the growth in vehicle number.
Though vehicle emissions standards and regulation are in place for new vehicles, the
majority of the problem comes from in-use and old vehicles. Old vehicles performing poorly,
in terms of energy use and emissions, are of significant concern in the region. Yet, socio-
political dynamics and public acceptability have prevented phasing out of old vehicles from
the streets in the region. Much debate centers around lack of financial capacity, but policy
makers have not been able to implement measures that don’t demand much financial
resources either. In major cities in the region, the local air pollution situation has worsened
to such an extent that the problem is visible even without need to refer to scientific data.
The scientific data confirms what is obvious to all: air pollutants, energy and CO2 emissions
in cities in South Asian region are all on the rise8, 9, 10, 11, 12.

7
Sawa, T. (1997). Japan’s experience in the battle against air pollution. Committee on Japan’s experience in the
battle against air pollution, Tokyo.
8
Dhakal S. (2003). Implications of transportation policies on energy and environment in Kathmandu Valley,
Nepal. Accepted for publication to Energy Policy, Elsevier Sciences.
9
Shrestha R. M, Shrestha R. and Anandarajah G. (2001). Motigating environmental emissions from the
transport system of selected Asian cities: Analyses of technical options. Proceedings of IGES/APN Mega-City
Workshop on Policy Integration of Energy Related Issues in Asian Cities, 23-23 January, 2002, Riga Royal
Hotel, Kitakyushu, Japan, pp 273-284.
10
Urban Air Quality Management Strategy in Asia, The World bank, 1997.
Lack of scientific understanding

The lifestyles of urban dwellers in Asian cities are becoming more and more energy
intensive. The consumption of material goods and water are increasing. Over motorisation,
over reliance on commercial energy use, electrical and electronic equipment are common
features of cities. There is a little understanding of various forces leading to these changes
and the strategies that can be taken to mitigate the impact on the environment of these
changes. The energy footprint of cities (taking into account direct and indirect energy use
and emission embedded in consumption) is rarely studied at the city level. Existing policies
have typically not addressed the issues with such a comprehensive approach.

A huge gap in the existing knowledge, credible scientific information and data related to
energy use and emissions exists in the region. Some research exists on urban
transportation issues but the depth and coverage of this research is limited. For example,
local emission factors of transport modes, vehicle population with age and engine size
hardly exist for many cities. There are also a number of technical and non-technical gaps in
understanding. The roles of technological and non-technological options and measures
have not been clarified.

Scientific studies in the urban sector in areas other that transportation are even more
scarce. Building energy use and efficient ways to manage buildings while keeping the level
of amenities intact are rarely studied. Some limited work on CO2 emission from municipal
waste has been carried out, but in general research on city scale energy and emissions do
not exist. Since policy makers are largely unaware of the full range of issues, a situation is
created where there is a lack of influence of scientific findings over actual policies. A lack of
sufficient research has also hindered the influence of scientific studies on policy making.

Policies and institutions

Policy failure (due to a combination of market failure and institutional failure) is a common
phenomenon in South Asia. Institutional arrangement for policy formulation and
implementation remains a key issue. Inefficiency of government affiliated enterprises and
related cost recovery problems hinder public transportation restructuring as well as providing
correct signals to the market for private sector participation. Incorrect incentive systems
mostly distort the market. Most of the policies have been reactive rather than proactive and
an over dependence on short-term and ad-hoc policies often results in a chaotic situation.
Too much emphasis on end-of-pipe solutions has also been witnessed in the region.

Serious reform in public transportation system is a key need in the cities along with an
appropriate system of incentives. In addressing transportation energy use and equity
issues, an even more serious concern is the pattern of land development that is beginning to
emerge in the region. Policy needs to be in place for appropriate land development patterns
that that is consistent with transit and non-motorized modes of transportation. The
American pattern of suburban sprawl comes packaged with all the seductive powers of
Hollywood but carries with it a tremendous societal and environmental cost for all cities
worldwide. Policy makers and researchers need to look to environmentally sustainable

11
Benchmarking Urban Air Quality Management and Practices in Major and Megac Cities Stage I. Air
Pollution in the Mega cities of Asia (APMA). Korea Environment Institute, 2002.
12
Final report of IGES/APN project “The Budget of GHGs, Urban Air Pollutants and their Future Emissions
Scenarios in Selected Mega-cities in Asia”. Submitted to Asia Pacific Network for Global Change Research
(APN), February 2003, Tokyo.
cities like Zurich, Curitiba and Singapore for measures to decouple economic growth from
environmental degradation.

A slow pace of economic growth in comparison to East Asia and South-East Asia prevails in
South Asia and this partly hinders reform as transportation issues are intertwined with low-
income groups and equity issues. Due to slow economic growth, the improvements in
process and productivity related to production and consumption system are hard to achieve.

Since the market is not well established for environmental services, the policy-makers are
limited in being able to utilize the market-based mechanisms for influencing changes. This
has led to an over-dependence on a command-and-control approach, although more efforts
are being made to use a market approach, especially in areas relating to urban physical
infrastructure. Regulatory and governance issues are key issues facing South Asia: the
regulatory provisions are not adequate and institutional problems hinder policy
implementations.

Key transition needs in South Asia and research questions

Following are the key observations on South Asian transition needs. These perceived
transition needs are consistent with Industrial Transformation concepts.

Interventions other than end-of-pipe management: As mentioned above, most of the

interventions are happening at the end-of-pipe and interventions in systems are a key
transition need, especially from the policy perspectives. Modal shift from clean vehicles to
clean transportation systems, the drive towards energy efficient buildings, a watershed
approach to urban water management, and moving energy use to clean energy use are key
needs. Usually end-of-pipe policy interventions are reactive and systems interventions are
pro-active in nature. Awareness and research are observed in this direction but the trend is
still insufficient.

Shifting from strong government interventions to strengthening multi-sector and multi

stakeholders: Some efforts are underway, especially in public transportation and the water
sector (infrastructure sector). Awareness raising and capacity building of the society as a
whole to address environmental problems is a key need in the region. This shifts the
burden of problem solving from the specialists to society thus relieving the financial burden
and reduce the scale of the problem.

Changing the management philosophy: This transition seeks a change in the driving
philosophy from minimisation to optimisation. The institutions and policies should play a key
role in such changes.

Use of market based approach while keeping equity issues at the forefront: The need to
create systems for market based approach and promoting public private partnerships is
evident in South Asia. This also helps to overcome some of the infrastructure related
constraints. Getting polluters to pay principle based fees, tariff and taxes without distorting
the market is essential. However, regulatory and institutional reforms for such transition are
a necessary pre-requisite.

This gives rise to following question as a research agenda for South Asia.

What is the exact role of cities (quantification) in the global environmental debate, especially
from the viewpoint of greenhouse gas emissions?

What is the appropriate transportation and land-use system that is needed to decouple
mobility demand from its implications to the environment in South Asia?
What lessons can be learn from cities in other regions to reduce automobile dependency at
this early stage of auto-mobilization in South Asia?

How can we harmonize technological and non-technological options in developing a synergy

between local as well as global environmental concerns from urban transportation?

What are the appropriate incentive systems? What are the roles and limitations of market
based approaches and how can they be used to re-orient future transitions?

What is the relevance and applicability of successful experiences in other regions of world to
South Asia?