Unlocking opportunities in Sustainable Cities
Cities account for less than 2% of the Earth’s surface, yet they epitomise human progress and have been an enormously disproportionate growth engine, generating 85% of global GDP.1 People have steadily flocked to cities in search of better economic prospects and opportunities. With higher population density and energy-hungry infrastructure, however, it has become clear that in order to tackle some of the world’s most pressing issues such as climate change, cities need to be an integral part of the discussion. This includes the need to address mobility and transport, as well as housing, but also rising emission levels. Companies that are actively addressing these needs will benefit from multi-year tailwinds.
The world is becoming more urbanised: The United Nations expects 68% of people to live in cities by 2050, up from 55% in 2018, and 3% in 1800.3 The urban shift has given rise to megacities – cities with a population of 10 million or more, including Tokyo, Delhi and Shanghai. In 2020, the world had over 30 megacities – a number that is expected to rise.
Unsustainable mobility: Mobility is a universal urge. And a more numerous, more affluent global population will demand even more mobility. The UN estimates that the global car fleet could triple by 2050.4 So how do we ensure that this degree of mobility is sustainable? Lots of travel is done in a way that is detrimental to human and environmental health:
- 95% of the world’s transport energy still comes from fossil fuels,5 emitting CO2 into the atmosphere and contributing towards global warming.
- The resulting emissions, especially in densely populated areas, are partly responsible for the 5 million deaths per year globally from air pollution.6
Tipping point in EVs: Transportation is responsible for 24% of direct CO2 emissions from fuel combustion.7 Electric vehicles (EVs) swerve this problem – and we appear to be at the cusp of mass adoption, with Covid potentially having just nudged us over the edge. Whilst global new car sales dropped by 30% in 2020, EV sales boomed: in Europe, EV volumes jumped 45% year on year. Even within the year itself, the electrification process accelerated, with EVs hitting a 16% share of new sales in November 2020, something that would have been utterly unthinkable even a couple of years ago.8 The battery-powered vehicles market share now stands at 11%,9 which is way ahead of expectations, with a long way still to go.