Bigger ideas, not just bigger budgets, will help to green our cities

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The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

Thinking outside the box will be beneficial for many of the world’s major metropolises

To have a two-in-three chance of limiting global warming to 1.5℃, we must release no more than 400 gigatons of CO₂ into the atmosphere between 2020 and 2050. As cities generate over 70% of total greenhouse gas emissions, they play a vital role in leading the charge to net zero. With around a third of urban emissions coming from transport, driving the adoption of electric vehicles (EVs) is a sensible strategy.

In recent years, governments at all levels have been investing in, and incentivising, this shift to EVs—and it is working. Global EV sales leapt 55% in 2022, making up 13% of total vehicle sales. If consumer demand continues to grow, and prices continue to fall, battery EVs and plug-in hybrids could make up 55% of global vehicle sales by 2030.

The impact of the widespread adoption of EVs on cities would be powerful. By generating 17%–30% lower emissions than petrol and diesel cars, EVs would improve both air quality and quality of life for citizens. And by creating new jobs—an estimated 334,000 by 2030 in the US and Canada alone—they could also help reduce economic inequity.

To realise these benefits, though, cities will need to overcome some substantial challenges.

INCENTIVISE UPTAKE

Many cities are expanding and electrifying their public transit systems. In China, Shenzhen already has a fully electric fleet of buses and taxis, for example. And Medellin in Columbia is one of 26 cities to commit to procuring only zero-emission buses by 2025.

Cities are also using incentives to encourage citizens to adopt EVs. Popular approaches include scrappage schemes (in which motorists are given cash toward a new, greener vehicle when trading in an old one), free parking and exemptions from road pricing charges.

Incentives can also be targeted at those who can least afford to make the shift. In San Francisco, subsidies are available to help low-income residents buy old and new EVs. The results of such initiatives can be powerful: in India, where two- and three-wheeled vehicles dominate city streets, e-rickshaws and e-mopeds now cost as little as $1000 and are cheap to run.

Meanwhile, Singapore is combining the carrot with the stick to achieve its goal of 100% cleaner vehicles by 2040. Cleaner vehicles are eligible for rebates, and by 2030, citizens will no longer be able to register new cars and taxis with new pure internal combustion engines.

GREENER SUPPLIES

There are two aspects to supply in the context of EVs: ensuring an adequate supply of charging points and switching to cleaner ways of producing the electricity they provide.

On the infrastructure side, cities bump up against an age-old problem: only a fraction of the tax revenues collected within the city stays in the city. So they cannot access funding on the scale needed to deliver large-scale projects. To get around the issue, cities are engaging with the private sector to raise investment and deliver innovative solutions.

In New York City, where on-street parking presents a logistical headache for EV charging, the city is working with an energy company and charging network to pilot a curbside scheme. Cities can also issue green city bonds, use public seed capital to attract private investment and send clear signals to the market by setting deployment targets.

When it comes to producing clean energy, rooftops—which take up 15-35% of total land area in cities—are an obvious opportunity. But other, more creative solutions are emerging. In its bid to host Expo 2030, Rome proposes building the world’s largest urban solar farm made up of hundreds of “energy trees.” By opening and closing their panels, the trees will generate energy and provide shade helping to keep the city cool.

Cities that want to nurture this kind of green innovation can use tax credits to attract more private capital into startups and support more R&D.

CARBON STORAGE

Even with all the necessary funding, partnerships and policies in place, the shift to EVs will not happen overnight. Nor will it remove all urban transport emissions.

Carbon removal solutions can complement emissions reduction strategies by removing unavoidable CO₂ emissions from the air and storing them, often underground. In doing so, they can help cities to achieve their net-zero goals or even become carbon-negative.

As ever, though, the main barrier to implementing these large-scale projects is the high price tag. Along with raising private capital, cities can take advantage of the early-stage subsidies and market integration policies of their national and regional governments.

California’s Low Carbon Fuel Standard credits alternative fuel providers for removing carbon from the value chain. Cities can support these initiatives by creating a regulatory and tax climate for innovation and attracting inward investment.

BUDGET REALLOCATION

With 70% of the global population expected to live in cities by 2050, it is crucial that urban leaders act to reduce greenhouse gas emissions—particularly from transport.

With the right targets, policies and regulations, cities can become hubs for green technology while also reducing transport emissions on the demand and supply sides. Public-private partnerships, innovative financing solutions and appropriate regulation will all play an important role.

But if national governments are serious about reaching net zero, they will need big ideas and not just big budgets to deliver the biggest reductions in emissions.

If you have a thoughtful response to the opinions expressed here or if you have an idea for a thought leadership article regarding an aspect of the global energy transition, please send a short pitch of 200 words outlining your thoughts and credentials to: opinion@foresightdk.com.