Factors Driving and Blocking Adoption of Innovative City Solutions and Role of New Technology in Implementing Sustainable Governance and Finance Models

Factors Driving and Blocking Adoption of Innovative City Solutions and Role of New Technology in Implementing Sustainable Governance and Finance Models

1.Introduction

 The world is experiencing rapid urbanisation (Godfrey & Zhao, 2016). Urban areas now accommodate over half of the global population (UN, 2014), but generate approximately 82% of global GDP (CCFLA, 2015). The share of global economic output attributable to cities is expected to reach 88% well before 2030 (CCFLA, 2015) and the 750 largest cities are likely to account for up to 60% of global GDP growth between 2012 and 2030 (Godfrey & Zhao, 2016). Scholars have highlighted that the current economic system has developed with no concern for the environment or little interest in recycling (Su et al. 2013).

2. Current state of cities

Cities are the main poles of human and economic activity that hold the potential to create synergies allowing great development opportunities to their inhabitants (Monzon, 2016). But due to the above mentioned environmental aspect, they are now struggling with their distribution, which is considered to be unsustainable (Macharis & Kin, 2016). For years, the topic of city distribution has been neglected by city planners in European cities (Lindholm and Behrends, 2012; Dablanc, 2007; Zunder and Ibanez, 2004). It has only resurfaced recently because its effects on mobility and quality of life have become increasingly apparent (Cherrett et al., 2012; Lindholm, 2013; Stathopoulos et al., 2012). Cities and urban infrastructure are key energy consumers and emitters of greenhouse gases (GHG) emissions; around 70% of global energy consumption and over 70% of GHG emissions are associated with urban areas (Seto, et. al, 2014).

Thus, it is no surprise that rapidly expanding urban settlements in the developing world face severe climatic risks in light of climate change (Tanner et. al, 2009). The main risks urban populations face include vector-borne diseases, heat stress, flooding, air and water pollution (Wilbanks et al. 2001; Parry et al. 2007). Deteriorating water accessibility in cities and an increasing risk of forest fires in peri-urban areas are supplementary dangers faced by urban populations. Climate change has the capacity to modify the climatic potential for urban heat islands, with increases of 30% in some locations, but a global average reduction of 6% (McCarthy et. al, 2010). The absence of long-term stability of carbon price or the lack of public incentives for low carbon initiatives makes investment in low carbon technologies unattractive (Martinez et. al, 2013).  Moreover, the inconsistency in international, national and regional rules and regulations related to environmental policies does not help to scale initiatives (Kinver, 2011). There is also a lack of appropriate and systematic methodologies and metrics for reporting and verifying the investment returns due to smart city technologies (Walravens & Ballon, 2013).

3. Key issues faced by cities

Apart from key social and environmental issues faced by cities that hamper implementation of ground-breaking city solutions, there are economic and financial issues prevalent too that are slowing down public investments (Martinez et. al, 2013). Unavailability of credit and new pressures and regulations on financial institutions is limiting the available cash flows, slowing down private investments (Mulligan & Olson, 2013). Although the idea of a smart city is attractive to policy makers, empirical research is needed to advance our academic understanding of the new ‘‘marriage’’ between technology and urban governance (Meijer & Rodrı´guez Bolı´var, 2015). The focus of ‘‘smart cities’’ research for governments has typically been on how cities might improve urban economies, quality of life, and myriad problems by employing information and communication technologies (Gil-Garcia, Helbig, & Ojo, 2014). Many of the challenges faced by smart cities surpass the capacities, capabilities, and reaches of their traditional institutions and their classical processes of governing, and therefore require new and innovative forms of governance (Rodrı´guez, 2015). Moreover, there are few alternative secondary markets to finance large smart city projects as only grants coming from EU funds or small local initiatives and local philanthropic capital are allowed to run first trials (Ruhlandt, 2018).

4. Cities and climate change

Climate change has the capacity to modify the climatic potential for urban heat islands, with increases of 30% in some locations, but a global average reduction of 6% (McCarthy, Best & Betts, 2010). Keeping this and other important actualities mentioned above in mind, this study will focus on how breakthroughs in technology can help us build self-governing and self-financing sustainable models that will assist us in setting up climate resilie