OPEC Fund Quarterly - 2024 Q4

HOUSING URBANIZATION

“IF THE FUNDAMENTALS AREN’T FIXED, THEN SLAPPING TECHNOLOGY ON THE FRONT WILL NOT SOLVE IT”

The British economist and geographer Oliver Harman urges us to embrace – rather than fear – urbanization. Here he explains why By Axel Reiserer, OPEC Fund

OPEC Fund Quarterly : Housing plays a big role in climate change as a major emitter of greenhouse gases. How is housing impacting the climate in developing countries? Oliver Harman: Buildings are responsible for 35 to 40 percent of global energy-

OFQ : How is this possible? OH: It is the density of urban spaces that enables a much larger reduction in per capita emissions. Because pollution is generated in a concentrated way by many people in a comparatively small place, it can be targeted much more precisely and effectively than when it is caused by many small units scattered over a large territory. Urban density makes mitigation more effective, but there is also an adaptation side of things with access to local public goods and services. A study by the London School of Economics titled Weather, Climate and Death in India found that hot days lead to substantial increases in mortality in rural but not in urban India, where people have networks around them that allow them to mitigate this shock better. In contrast, in rural areas the consequences are larger since they cannot manage the shocks to their consumption, income and health as well as people can in urban areas. OFQ : Does this mean we need to rethink urbanization? Should we see it not as a problem, but rather as an opportunity? OH: We always also need to think the counterfactual and ask ourselves, what’s the alternative? It is a fact that urbanization is happening and attempting to inhibit this is both regressive and difficult. The question

is then, how to make urbanization sustainable and how to house people in a way that limits the impact on the environment and ecological systems. And if we look at this in that way we see for a fact that density is a much more effective way of addressing the issue. OFQ : Does that not assume that these cities can at least provide basic services in terms of housing and water supply? Do cities in developing countries meet these kinds of minimum criteria? OH: I am not going to say that all cities in developing countries are green and wonderfully sustainable. But the evidence, for instance data from the Intergovernmental Panel on Climate Change (IPCC), shows that the energy use per capita in almost every world region is much lower in urban areas than it is in rural areas. The same is true of carbon emissions per capita, which are also much lower in urban areas than in rural areas. I think what’s often missed out of this argument is that cities are simply a much more effective way of bringing people together that allows people to use their limited funds in a much more effective way. There’s lower greenhouse gas emissions thanks to the ability for people to use public transit to get around more effectively. There’s less materials on a per capita basis needed because everyone’s

related carbon emissions. What is interesting is that roughly three-

quarters of those come from operational emissions. That’s why heating, cooling, powering etc. are so important when we think about reducing emissions. For many developing countries this is an added challenge because they often are already at the kind of a spiky end of climate change: These emissions will likely only increase as the average temperature increases. The ambient temperature is one thing, but when your country or city is hit with 40°C or more then you see these huge energy spikes. OFQ : How big are the differences between cities in the developing world? OH: We must differentiate between the impact of housing with sustainable

urbanization versus the impact of housing without sustainable urbanization. Our research at the

International Growth Centre (IGC) shows that cities in developing countries are the most vulnerable to climate change, but also the most viable solution to its impact.

18

Powered by