Research and discussion for citizens and decision makers

Bruce Katz

A clean economy of place

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I recently returned from Copenhagen, my first time to the Danish capital. Even a three day visit affirms why this city of more than 540,000 residents has received global recognition as a beacon of sustainable development. An incredible 36% of all commuting trips to work or school are made by bike along, in many cases, secure bike lanes that protect cyclists from cars and buses. Another 32% of city residents either walk or utilise the region’s highly-efficient public transportation network of buses and trains.

This kind of sustainable development clearly yields significant environmental benefits. Copenhagen achieved the highest ranking in the 2009 European Green City Index, scoring in the top 10 in all eight categories, from energy efficiency to transport and environmental governance.

Growing green is obviously an environmental imperative. Yet the Copenhagen experience shows that it can be a market proposition as well, with a diverse set of economic and fiscal benefits accruing to cities that are at the vanguard of sustainable development. Cities like Copenhagen, in short, may be inventing a clean economy of place.

Monday Morning, the respected Scandinavian thinktank, recently released a report detailing the effect of building a city that is high in spatial efficiency and rich in transport choices. Some of the benefits are direct and local. Residents who cycle to work or school are healthier, so healthcare costs decline (by an estimated £236m a year). Fewer cars on the road means less congestion and fewer accidents, so additional savings are realised.

Yet the big effect from sustainable development may be indirect and global, as specialised firms naturally rise and expand to meet the growing demand for clean services and clean products. Monday Morning’s report finds that Copenhagen’s clean sector has been a critical contributor to the region’s economy in the past decade, with green exports outpacing all other sectors by growing at an astounding 77% between 2004 and 2009.

Cities in the US are following suit. Portland, Oregon, is also internationally renowned for its commitment to sustainable development. The Portland metropolis has an expansive public transit system and an urban growth boundary to control development at the urban periphery. The city boasts a green investment fund to provide grants for residential and commercial building projects.

Now the city is striving, like Copenhagen, to reap the economic rewards of sustainable development through business formation, firm expansion, job growth and private investment. In February, Portland released its first regional export plan to double exports over five years by building on the region’s distinctive economic and physical attributes. A critical pillar of this strategyinvolves increasing the export orientation of firms in the burgeoning clean technology sector to serve growing markets in Asia, Latin America and elsewhere.

Both Copenhagen and Portland recognise that urbanisation is the dominant market-shaping trend of the century. By 2030 it is estimated that China will have 1 billion residents while India will have 590 million. These nations and others will demand products and services that enable development that is economically supportive, environmentally sensitive and spatially efficient. And those products and services may disproportionately emerge from firms located in cities, in mature economies and rising nations alike, which are first movers on sustainable development.

The economic benefits of sustainable development could be substantial. Last year, my programme at Brookings measured the US clean economy at 2.7m jobs. That means the clean economy has more jobs than fossil-fuel related industries and is nearly twice the size of the biosciences field and 60% of the 4.8m strong IT sector.

The US clean economy is also incredibly diverse (sweeping across five broad categories and 39 separate clusters) and disproportionately located in the nation’s top 100 cities and metropolitan areas.

Green architecture and construction services cluster illustrates the potential for growth and the reality of metropolitan concentration. This segment already employs over 56,000 people in the US. Some 90% of these jobs are located in the top 100 cities and towns (although those communities house only two thirds of the population). The segment grew by a healthy annual average of 6.4% between 2003 and 2010 and includes firms such as Burns and McDonnell Engineering in Kansas City, McKinstry and Co in Seattle, and Gensler in San Francisco. Conclusion: the clean economy of place constitutes a virtuous cycle between cities, companies, consumers and clusters.

Let me end where I began, in Copenhagen. The city is not resting on its cycling laurels but setting its sights higher, towards achieving a goal of carbon neutrality by 2025. Shakespeare was wrong: all is not rotten in the state of Denmark. Nurturing what is good – and green – embracing it and extending it could provide a platform for economic growth for decades to come.


Full story: Urbanisation and inventing a clean economy of place
Source: The Guardian, April 23, 2012

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