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Urbanization Can Be Good For The Environment

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Urbanization degrades the environment, according to conventional wisdom. This view has led many developing countries to limit rural—urban migration and curb urban expansion. But this view is incorrect. There are a number of reasons urbanization can be good for the environment, if managed properly.

First, urbanization brings higher productivity because of its positive externalities and economies of scale. Asian urban productivity is more than 5.5 times that of rural areas. The same output can be produced using fewer resources with urban agglomeration than without. In this sense, urbanization reduces the ecological footprint. The service sector requires urbanization because it needs a concentration of clients. As services generally pollute less than manufacturing, this aspect of urbanization is also beneficial to the environment.

Second, for any given population, the high urban density is benign for the environment. The urban economics literature shows that compactness is a key determinant of energy use. High density can make public transport more viable and reduce the length of trips. Urban living encourages walking and cycling rather than driving.

Third, environment-friendly infrastructure and public services such as piped water, sanitation, and waste management are much easier and more economical to construct, maintain, and operate in an urban setting. Urbanization allows more people to have access to environment-friendly facilities and services at affordable prices.

Fourth, urbanization drives innovation, including green technologies. In the long term, environment-friendly equipment, machines, vehicles, and utilities will determine the future of the green economy. Green innovations in Asia’s cities will be supported by the region’s vast market as the billions of people who will be buying energy-efficient products will create opportunities and incentives for entrepreneurs to invest in developing such products.

Finally, the higher standard of living associated with urbanization provides people with better food, education, housing, and health care. Urban growth generates revenues that fund infrastructure projects, reducing congestion and improving public health. Urbanization fosters a pro-environment stance among property owners and the middle class, which is crucial for the introduction and enforcement of environmental laws and regulations.

Of course, urbanization also comes with costs. Millions of people are migrating to Asian cities and companies are locating there to employ them. Urban sprawl and industrial activities, such as power generation, transportation, construction, garbage and waste disposal, harm the environment. An assessment of the impact of urbanization on the environment must balance its benign and adverse effects. Figure 1 shows that the Asian environment–urbanization relationship varies, depending on the level of development. Once a certain threshold has been reached, urbanization becomes good for the environment in terms of lower emissions of CO2 and particle pollution (PM10).

Figure 1: Environment–Urbanization Relationship in Asia

Figure 1 Environment Urbanization can be good for the environment

CO2 = carbon dioxide; PM10 = particulate matter with diameter of 10 micrometers or less; μg/m3 = micrograms per cubic meter; t = ton.

Source: ADB estimates.

The graph’s curves show that cities in the 2000s enjoyed a better environment at the same level of urbanization than cities in the 1990s. To ensure green urbanization, developing countries need to continue the downward shift by adopting the following recommendations.

The first priority is to improve energy efficiency and conservation through appropriate pricing, regulations, and public sector support. It is vital to get prices right so that they incorporate the full social costs and benefits, and ensure the efficient allocation of resources. This can be done by imposing congestion and emission charges, as in Singapore, and by removing inefficient subsidies, as in Indonesia. Other examples are the introduction of carbon taxes, as in the Republic of Korea, and increasing block pricing for water, electricity, and other public utilities, as in the Philippines.

Countries need to introduce regulations and standards in a timely manner. These can correct for market or coordination failures on air, water, vehicles, and appliances, as in India. The government can build green industrial zones to attract manufacturing, as in Indonesia. Improved regulations can reduce or prevent urban sprawl.

Cities need to build rapid public transport systems to improve connectivity and reduce pollution. Speedy connections to and from satellite cities can ease congestion in central megacity hubs. Rapid bus transit systems, as in the People’s Republic of China (PRC), and subways, as in India, can reduce environmental degradation in densely populated cities and improve the quality of life.

The second priority is to promote renewable resources and new energy technologies. Waste-to-energy plants reduce pollution and generate energy, as in the Philippines and Thailand. Green technology can be acquired either by importation or innovation through research and development, as in the PRC.

The PRC is building new towns and satellite cities using renewable energy as primary energy sources. Urban sprawl can be tackled by reviving city centers and developing compact, walkable satellite cities centered on efficient train, light rail, or subway systems, without heavy reliance on highways and major roads.

The third priority is to help the poor by reducing disaster risks and improving slum conditions. Disaster risk reduction can be done by building dwellings in safe areas, improving housing affordability for the poor, and investing in drainage infrastructure and climate forecast technology. Policies to improve slum conditions include providing basic services, granting land titles to slum dwellers, and issuing housing vouchers linked in value to the length of a resident’s tenure in the city.

The fourth priority is to strengthen public finance, transparency, and accountability. Public finance can be improved by broadening the tax and revenue base and by increasing the access of urban governments to broader and deeper capital markets in order to lower infrastructure and public service costs.

Politicians can be encouraged to do the right thing by disclosing city government performance to the public and nongovernment organizations, and having national competitions and campaigns to encourage a “race to the top” to reward high achievement.

Reference:

ADB. 2012. Key Indicators for Asia and the Pacific 2012. Manila www.adb.org/publications/key-indicators-asia-and-pacific-2012. The arguments in this post are covered in greater depth in the Key Indicators volume.

 written by Dr. Guanghua Wan is a principal economist at the Asian Development Bank .See more

Callum Connects

Agnes Yee, Legal & Compliance Recruiter of Space Executive

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Agnes Yee started Space Executive in Singapore, which is a hub for businesses in some of the world’s fastest growing economies.

What’s your story?
After graduation, I joined a design media company as a Business Development Executive, during the era when ‘reading a magazine online’ was unheard of. I believe that laid the foundation for being unfazed by rejections.

I fell into recruitment pre-GFC and rode the highs and lows in the early years. A decade later, I decided to set up my own recruitment company, partly because I could. I’m acutely aware of the face that being an Asian female in Singapore is sometimes a privilege, and that many women in the world are living a very different existence.
Thereafter, we joined Space Executive as part of a merger. I am currently the Partner of Space Executive, a recruitment company focused specialist disciplines, including Legal, Finance, Digital, Sales and Marketing and Change. We also run Space Ventures, a venture capital business, which invests in seed and pre-series A businesses.

What excites you most about your industry?
On a daily basis, we’re influencing how one spends a third of their day. It is interesting how the Internet has transformed the industry, and I’m excited to see how we can harness technology to bring us to the next phase of this business.

The VC is an extension of applying our skills and experience in reading people. We very much invest in the people as much as the idea. Being a native Singaporean, it’s been exhilarating watching Southeast Asia becoming a hotbed of ideas; and young entrepreneurs simply daring to dream.

What’s your connection to Asia?
I’m a born and bred Singaporean. I love that I speak both English and Mandarin, grew up playing with Indian friends and eating Malay food.

Favourite city in Asia for business and why?
Singapore for the low barriers of entry to set up a business, but has to be China (and Hong Kong) for their hunger and constant innovation.

What’s the best piece of advice you ever received?
青春不要留白 which translates to ‘Don’t waste your youth.’

Who inspires you?
Anyone who has gone against the grain.

What have you just learnt recently that blew you away?
It wasn’t recent but reading the article on https://waitbutwhy.com/2015/12/the-tail-end.html never fails to blow my mind how little time we have left. Charting our lives in weeks, and realising I only have enough time left to enjoy 60 Christmas turkeys, read 300 books (all if I’m lucky); and mostly, I’m left with the last 5% of the time that I spend in-person with my parents.

If you had your time again, what would you do differently?
I’m cognisant that every decision I made in life has brought me to where I am today, and I wouldn’t change one thing. But I’d really like to have had more time to travel.

How do you unwind?
Exercise and wine.

Favourite Asian destination for relaxation? Why?
Trekking any mountain in Asia. It brings us back to the most basic. To overcome elements of nature and our own mind.

Everyone in business should read this book:
Start with Why, Simon Sinek

Shameless plug for your business:
Space Executive started in Singapore, a hub for businesses in some of the world’s fastest growing economies. We assist organisations in accessing a targeted and specialised, and often times transient talent pool.

Out of Singapore, we have recruited across 14 countries; and have embarked on our global expansion plans with offices in Hong Kong and London this year, and US, Japan and Europe in the following years.

Space Ventures provides funding, management and financial guidance to young businesses with original ideas. We have invested in peer to peer lending platforms, credit scoring, social media education, and other start-ups spanning diverse industries. We are always interested in hearing more about new ideas.

How can people connect with you?
https://www.linkedin.com/in/agnesyee/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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Callum Connects

Chrystie Dao-Szabo, Founder of iPayMy

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Chrystie Dao-Szabo founded iPaymy for Business – a secure and easy to use
platform enabling SMEs to pay rent, salaries, invoices, and even corporate tax using the credit cards they already have in their wallet today.

What’s your story?
I’m Chrystie Dao-Szabo, and I’ve worked as an international banker for over 22 years. During that time, I travelled through Asia, Australia and Europe, and everywhere I saw how my clients struggled with managing their finances and keeping cash around.

I wanted to use my experience to help them, but I also knew the solution they needed didn’t exist yet. This pushed me to give up on my secure career, and instead look into the innovative world of FinTech for an answer.

This is how I founded iPaymy – at its launch, a platform to help consumers pay their monthly expenses using their credit cards. We’ve grown a lot since, and today, iPaymy for Business is a platform that allows business owners to use their credit cards to pay for rent, salaries, invoices and taxes, freeing up their cash for business-critical operations.

What excites you most about your industry?
What excites me most about FinTech is it’s culture of constant disruption, thanks to cool and innovative products and services coming out every day.

What’s your connection to Asia?
I was born in Vietnam, grew up in Australia and worked in Asia, Europe and Australia. Being raised by traditional Vietnamese parents meant that deep down I was still an Asian at heart, so I have a strong connection with the region.

Favourite city in Asia for business and why?
Singapore of course. It’s easy to do business, English is the main language, and the infrastructures like public transportation are great. Also, the government supports local innovation in multiple ways, like giving grants for SMEs and FinTechs.

What’s the best piece of advice you ever received?
Keep giving, and one day you will receive.

Who inspires you?
My parents. My father had a successful business in Vietnam just before the fall of Saigon in 1975. After the war, my father was sent to a re-education camp for three years, which meant my mum had to bring up two young kids – a 3-year-old, me and my 4-year old brother on her own.

In 1980, we all fled Vietnam on a boat and arrived in Sydney, Australia via refugee camps in Indonesia and Singapore. There, my parents had to start over with nothing to their names and only AUD 50 given to them by the Australian government.
They went on to build several businesses in Australia!

What have you just learnt recently that blew you away?
The number of young and smart people who have carved out successful careers by founding their own startups (or joining really cool ones). When I was starting out my career, doing any of these was not a viable option; it was either working for an accounting firm, an insurance company or a bank.

If you had your time again, what would you do differently?
If I were starting out my career now, I would choose the path of joining a startup as you get to learn so much about running a business and how to assemble a winning team.

How do you unwind?
I like travelling to a beach or a resort destination and just relaxing by the pool or beach. I also like to unwind after work with a glass of champagne or wine, and a bowl of truffle fries.

Favourite Asian destination for relaxation? Why?
Thailand. I love the people and the spicy Thai food.

Everyone in business should read this book:
The E-Myth. It’s a book series that dismantles common myths about entrepreneurship in different industries.

Shameless plug for your business:
With iPaymy for Business, SMEs can pay rent, salaries, invoices, and even corporate tax using the credit cards they already have in their wallet today. SMEs love iPaymy because it works like a credit card, but pays like cash.

iPaymy’s secure and easy to use platform reliably delivers payments to vendors while freeing up cash and providing access to interest free credit. Forget the delays and aggravations that come with traditional SME financing options. Schedule recurring payments, manage invoices, set payment reminders, and monitor payment status all from one dashboard.

It’s never been easier for SMEs to meet monthly payment obligations while keeping cash available to fuel growth, bridge receivable gaps, and make immediate investment in the supplies, services, and expertise needed to drive a growing business forward.

How can people connect with you?
You can find me on LinkedIn or contact me by email.
My LinkedIn: https://www.linkedin.com/in/chrystiedaoszabo/
My email: [email protected]

Twitter handle?
https://twitter.com/ceedeees

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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