 Thank you very much. Thank you very much for inviting me here to speak. I'm going to take a step back a little bit and talk about effectively a study or talk about some of the findings of a study we've been undertaking at the London School of Economics together with LSE cities on the economics of green resource sufficient sustainable cities It's a study chaired by Lord Stern. I worked with him on the Stern review on the economics of climate change And we've got a number of partner cities already. We've got Copenhagen. We've got Portland We've got Stockholm and we're looking to move that collaboration Onward, so I'm going to identify some of the key findings and some of the key elements of this story There we go okay, so In sort of diametric contrast this morning to Ed who put a chart up which was meaningful but Somewhat aesthetically displeasing I'm going to start with a chart that's kind of the precise reverse This is I think a beautiful chart. It looks like a Zaha Hadid painting So I thought it would appeal to some of you in the audience But it's somewhat meaningless. It doesn't even have a y-axis But it tells a story effectively. These are a bunch of resources That are being you can see it's disappearing to the background there a bunch of resources That are being consumed and they are that resource use is increasing pretty much exponentially And resource efficiency is going to be at the core of of this story and cities are going to be at the heart of that story Cities very clearly are part of the problem. We know that They are already home to half of the world's seven billion population by mid century That will rise to about three quarters and even now they account for about three quarters of the world's consumption And three quarters of the world's emissions and emissions can be used as a proxy for all sorts of resource uses But as well as being part of the problem cities are also very much part of the solution Now we know that cities uh by their very nature were developed to take advantage of efficiencies Cities are all about bringing people together and benefiting from the efficiencies that that brings allowing goods services to come in Cities are usually established on rivers or on ports once those services are established They can be distributed more easily to the present day. It's much easier to distribute electricity Water take away waste food and so on and it's of course a vibrant environment where you get people together So you have these what I would call static gains and efficiencies from bringing people together Which are precisely the very reason that cities are developed in the first place But also and I think somewhat more importantly in the resource efficiency context Cities allow for these dynamic Efficiencies, what do I mean by that? Well If we're going to have a chance of living within the world's resource envelope We have to do what economists call increase total factor productivity We can't rely on reducing consumption and reducing output as a means to reduce resource use We have billions of people a particular in the developing world whose only route out of poverty is through economic growth And rising consumption So the only way we're going to square the circle is to consume more but to do so much more efficiently And also maybe to change our tastes and preferences in terms of what and why we consume And to do that we have to change our mode of production production isn't just about what materials and inputs and people and capital You throw into the process It's about and this is what total factor productivity stands for it's about how smartly you use those materials Those people those factories those machines It's about the technologies. It's about the processes. It's about the institutions and cities play a central role in driving innovation that drives total factor productivity that will allow us To grow and live within our resource envelope And the reason is that they contain this unique blend this this heady cocktail of specialization And diversity when you get people together and that provides a highly fertile environment for innovation In ideas in technologies and in processes and that's why a lot of the innovations That we benefit from for the most part tend to originate in urban environments So they are part of the problem But cities are at the same time an important part of the solution And innovation does not happen in a vacuum innovation happens because there is a challenge There is a common understanding of the need to meet that challenge And there is public support with clear lines of sight on how to Rise to that challenge and that's when entrepreneurs and innovators really start getting fired up Cities are essential for that process, but they also benefit from that process So you get innovation, but you also get by Through your attempts to improve resource efficiency you get by definition reduced waste But you benefit also from reduced noise reduced congestion reduced pollution lower health costs And it's a very attractive city to the extent that this innovation is going on You might get a business park. You might get a university Bruce just talked about the importance of that and you might end up with a much more livable city As well as a prosperous and successful one and that's why if you look at cities across the world You very often get cities at similar income levels, but with very divergent resource use There are a number of cities in North America Whose emissions of greenhouse gases again a proxy for resource use more generally are in the order of 20 to 30 tons per head There are cities in Europe Barcelona in fact most cities in Europe Barcelona though Amsterdam Helsinki Stockholm perhaps in key amongst these Copenhagen whose resource use in terms of Per capita emissions is of the order of five or less in some cases So we're talking substantial orders of magnitudes difference for similar levels of income now It's not clear that Copenhagen or Barcelona are less attractive cities to live in than for example, phoenix or atlanta So you can make very big difference and i'm going to talk about how and why that happens and part of that Depends on governance and it depends on the relationship with cities and planning mechanisms Affecting policy is often much easier to do at the urban level because citizens are much closer to their governments both physically But actually also culturally very often when you look at surveys, they show that the urban population We know that you know these urbanites are kind of progressive and edgy But they also put a higher premium on sustainability, especially where there's a clearly understood Mandate and i'm going to come back to some of the the mindsets and psychologies that drive Successful but also resource efficient cities the other element that makes cities absolutely unique the reason if you like Perhaps the key reason why nix turn and others are so concerned about cities when it comes to living Resource efficiently is that you can have the best climate policies in the world You can have globally coordinated agreements, but if you don't meaningfully do something about the urban form You don't have a hope in hell of addressing the climate and resource use problem And the main reason for that is because cities lock in behaviors They lock in institutions and they lock in physical infrastructures for a very long time making it extremely expensive to reverse that process You're also locking in of course emissions into the atmosphere. These sit around for decades Maybe hundreds of years. You're also depleting irreversible Resources in the process and that infrastructure that you're locking into is not just physical. It's psychological So what is it that that demarcates in a sense? Cities like stock home and Copenhagen. Yes, they have great infrastructure But they also have different mindsets that support the development of resource efficiency and reward it Politicians are held accountable for sustainability and they are rewarded Let me give you an example the one I like to use you go to Copenhagen And everybody cycles. Why does everybody cycle? Well, there's fantastic cycling infrastructure Anyone who's been there will will attest to that. Why is there great infrastructure? Well, duh, it's because everybody cycles Hang on a minute. There's a there's a chicken and egg here Well, there is and that's the whole point about path dependency at the urban level It doesn't matter what triggers a sustainable path once you're on it Both because of the physical infrastructure, but also because of the psychological mindsets You tend to get stuck on it again that explains why you get these two very distinct camps In terms of high and low resource efficiency cities one of the tragedies of course is that High sorry low resource efficiency cities are actually more expensive in the short run They require upfront investment. They require careful planning and that's why A lot of the poorer countries in the world have the most wasteful cities They can't afford the infrastructure that stock home and Copenhagen take for granted and it costs them year by year By year and it makes them much less resilient. So resource efficient cities are not just important for the planet They're also important for their own competitiveness and their own development. Now. This is a A pretty graphic picture of someone who's not clearly not very happy For reasons related to the state of that house Which was doubtless hers and it comes from a study by Carl Zenit called the death of sprawl And it relates to a city close to los angeles about 100 miles away called victorville And the story of victorville was that it was built during the housing boom in the u.s At a time when gas prices or petrol prices to use english parlance were around two dollars per gallon They doubled to four dollars per gallon by 2008 and suddenly Driving 100 miles or whatever to your nearest school or to a 50 miles to your nearest school or your shopping center Didn't look quite so attractive. So people didn't want to buy the houses. So the house prices collapsed So the mortgage is full closed The mortgage companies couldn't even sell the houses and in the end they just demolished the whole lot brand new housing stop demolished That development was rendered Unviable more or less overnight because it hadn't planned for a change in resource prices Well, if you like that's a microcosm of what might happen as resource prices rise as india and china And other parts of developing world continue to place demand Which outstrips supply as as a very Jeremy will tell us this fantastic mckinsey report Recently very clearly showed and this isn't just sort of small bit Actually, it's that collapse in the u.s housing market that led to the The credit default swap problem with subprime mortgages, which actually had ramifications Which we all know about since so not planning your open environment is a crucial Or planning your urban environment I should say to put it in in a positive sense is essential for the economic Sustainability as well as the environmental sustainability of your cities Now density is a clearly a very important element here. I said that one of the reasons Why we live in cities in the first place is because of the economies of scale that you get through dense urban environment But it also tells you something about policies policies must be integrated You can't just have a green roof here or a turbine there or combined heat and power somewhere else if you supply Plug-in points for electric vehicles, but those vehicles plug into a coal fired grid and are in a city that is Sprawling and building highways so that they have to drive for long distances That's not going to be an integrated policy that brings emissions down So one of one of the important elements of the policy story is that that policy must be integrated and coherent The sum of policies is always greater than the parts if you look at successful cities There are always ones which have an integrated set of environmental social spatial and planning policies some examples from portland from from Copenhagen indeed Against the backdrop of the very beautiful central station in berlin a number of Examples across leading cities. I'm not going to go through these I I hope that we're going to make these charts available this presentation available at the end There's an appendix as well Which takes you through some of the city actions that have been undertaken, but suffice it to say there are lots of them They are happening across the world not just in the developed world and they are integrated the successful city stories are all about integrated environmental Sustainability and innovation policies Which brings me to the question of smart cities Well, it's it's almost as the u.s. Founding fathers might have put itself evident that if a city is a system with inputs and outputs And through puts we know that mostly food raw materials water comes in we know that products and waste tend to go out and in the middle we've got We've got humans then it is pretty clear that cities that think that adapt that evolve that learn to optimize Their use of resources of energy of health care They communicate so as to provide optimal and efficient use of education social services They connect not just things to things but but people Sorry, not just people to people and things to things as you might associate with a smart grid say But people to things so that you get smart health care smarter public safety and security And the internet and broadband and connectivity Have to be a really important part of making those connections and improving the dynamism and efficiency of cities Policy i've said already has to be coordinated But it's not just a case of building the infrastructure a lot of it by the way is building the infrastructure because i've said how important it is to lock into the Right physical but also psychological infrastructure, but that's not enough You have to keep the policy signals Effective so that the private sector feels it has a stake in the game and can make money out of this if the entrepreneurs and if the innovators Are to continue to invest in sustainable cities and if public support is going to continue to carry That investment and push politicians to be held accountable for that investment That means pricing the damages you do through some form of Pricing externalities such as carbon and other rare resources It means overcoming information barriers through providing standards and regulations It means pushing certain technologies But doing so in a way that is open that is transparent that defines outcomes rather than pick specific technologies So you limit the possibility that policy That that market failures are simply replaced by policy failures where vested interests lobby government hard in order to get a Bigger slice of the cake so i'm going to end with this sort of rather lovely sunset view of of solar panels over london And just say effectively that you know the story of cities and what makes a story of the economics of cities so important Both to the story relating to environmental sustainability the world over and the ability of the planet to win live within its resource envelope but also to the individual Sustainability and competitiveness of cities in an environment where resource costs can only go up in the long term We've seen a hundred years of falling resource prices wiped out in the space of a decade as Asia industrializes and competes for the same resources we're competing and that's happening at a time By the way when a third of the world is more or less in recession So that's quite extraordinary. So if you want your cities to be resilient and successful as well as innovative and dynamic Sustainability has to be part of your economic as well as your environmental strategy the choices that we make today At the city level on transport on infrastructure on buildings on industry will have echoes and ramifications for decades to come People in london where mind the gap t-shirts Why because the central line curves at bank station because the romans designed the streets that way 2000 years ago that echo still rings true today How we make those choices will determine the technology the institutions and the behaviors we lock into And ultimately cities and those choices that are made will determine weather mankind can both manage climate change And capture the benefits of resource efficient growth. Thank you very much