April 25, 2012 8.41am AEST
Author : John Mathews, Professor of Strategic Management, Macquarie Graduate School of Management
The debate over how to green industry remains locked into national and regional settings. However, it is really at the level of cities that progress is likely to be achieved. Increasingly, the focus of efforts to green the current fossil-fuelled industrial system, as it spreads relentlessly worldwide, will have to focus at the city level for real solutions, both of technology and of finance – because it is at the level of cities that the most acute problems arise. And it is at the level of cities that political and economic coalitions can come together most readily to drive change.
There are several outstanding examples of industrial cities that have transformed themselves from fossil-fuelled nightmares to clean and green exponents of a new way forward.
Take Ulsan, the second-largest city of Korea and the country’s industrial centre. When he turned the sod for this first of Korea’s new “industrial parks” in 1962, Korea’s then-president, Park, Chung-hee, declared that only when the sky over Ulsan was black with industrial smoke, and the air was ringing with the sound of hammers on metal, would Korea throw off its centuries of poverty.
Within a few decades of the creation of petrochemical, automotive and shipbuilding complexes at Ulsan, Korea did indeed attain the status of a newly developed economy. But it did so at fearful cost for Ulsan itself. Environmental contamination of soil, water and air reached catastrophic levels, and the Taehwa River became an open industrial sewer.
A decade ago, in 2002, a new city administration took office. It pledged to regenerate Ulsan and turn it into an “eco-industrial park”. There would be resource and energy sharing between industrial complexes, reducing overall resource and energy throughput. So far, the efforts to reframe linkages between firms have shown substantial progress, and the Taehwa River is emerging as a symbol of the newly regenerated city.
This story was told by the former vice-mayor of Ulsan, Dr Bong-hyeon Joo, at a recent gathering of urbanists, economists and policy officials at a Greening Urban Growth symposium, staged in Penang in Malaysia by the Growth Dialogue in conjunction with ThinkCity. This latter is an arm of Malaysia’s sovereign wealth fund and investment agency, Khazanah Nasional, and its focus is on regenerating Georgetown, the colonial heart of Penang.
Other cities to tell their stories of eco-industrial regeneration included Ahmedabad in India and Portland in Oregon. An elected council member of Portland Metro told a fascinating story of how Portland had been moving relentlessly towards the urban uniformity and drabness of so much suburban development in the US, but reversed the process in the 1990s, led by the state’s agricultural and timber industries. They were not happy at seeing their livelihood disappearing under bitumen. This led to an urban regeneration that now boasts a new, “green” Portland, new human-scale transport systems and a general air of cultural revival.
These examples are emblematic of a growing global trend that seeks to reverse the environmental degradation of cities. Fossil-fuelled industrialisation is out. “In” is the recovery of both the economic potential of cities through creation of new green industries and the liveability and potential of cities through the regeneration of green precincts.
The symposium was enlivened by presentations from urbanists such as Professor Alfonso Vegara, founder of Fundacion Metropoli, and leader of urban redesign efforts in his native Spain and in south-east Asia. Dr Vegara sees cities as connected in patterns he describes as “diamonds” of spatial linkages – illustrated by the diamond that links the southern European cities of Lisbon, Madrid, Barcelona, Marseilles and Milan, or the diamond linking Singapore to the Malaysian industrial clusters of Iskandar Malaysia, Kuala Lumpur and Penang.
This latter diamond brings Singapore into a fruitful relationship with Malaysia, particularly with Iskandar Malaysia on the southern tip of the Malay peninsula. It provides a way to triple the land area of Singapore and extend its model of administrative guidance into the heartland of Malaysia. All these visions of new linkages provide opportunities for greening that were ignored or overlooked during the phase of fossil-fuelled industrialisation.
Perhaps the highlight of the symposium was the account of a new green technology for urban recycling, which has emerged in China. This is a process for recycling the solid waste of cities and turning its organic content into fertiliser, and inorganics such as plastics into pellets that are then available for recycling through manufacturing.
If there were a Nobel Prize for technological breakthroughs, this would surely be a candidate. It is the brainchild of Dr Zheng Shunchao whose company Zizhao Environmental Protection Development is building modular solid waste recycling (SWR) plants throughout China, through negotiation of a series of concessional arrangements. After decades of depending on non-solutions like landfill and incineration, here is a closed system that recycles everything promptly (within four hours), without odour or discharge. It creates a valuable fertiliser from the organic matter in the waste, which is appreciated by the local agricultural sectors. Dr Zheng describes his system as an “industrial stomach” that digests the organic materials in under four hours, day after day, in modular units that handle 200,000 tonnes per day. So out of China comes a technological breakthrough of the first order.
The Growth Dialogue has done the world a service in mounting this important initiative. But it is significant that it did so in partnership with Khazanah Nasional, which is likely to play a lead role in financing Malaysia’s greening, and specifically in its development of eco-industrial clusters. As the BICs take charge of the urban greening agenda, they are likely to utilize their sovereign wealth funds and investment agencies as the tools for transforming the current fossil-fuelled industrial model.
There are challenges aplenty in this agenda. So far, the successes raise the issue of what kinds of preconditions might be needed for eco-industrial initiatives to prove successful. One thing the Penang symposium made clear is that it is not just technological initiatives that are needed, but an equal emphasis on financing – such as the development bonds that have been used by the Indian city of Ahmedabad – to finance eco-industrial growth. Finance and technology are emerging as the twin faces of the incipient “greening of capitalism” revolution.
An earlier version of this article appeared on The Globalist.