Managing environmental resources as a group of strategic assets that are crucial to a municipality’s goals, important to ecosystem health, and beneficial to the community is key to successful urban management. What are the ways in which the environment can be viewed as an asset for cities?

The natural environment provides cities with countless ecosystem services. Some of these are so fundamental to urban liveability that they may seem invisible to urban managers: air, water, open space. Environmental resources are frequently taken for granted, rather than being utilised, enhanced, and invested in.

These are just some of the countless examples of the services that the natural environment provides to urban settlements

  • Clean air is essential to a healthy environment.
  • Rivers and water bodies provide drinking water and act as natural pollution filters.
  • Biodiversity is essential for food, materials, medicine and improved quality of life, not just locally but also globally. Biospheres range far beyond the boundaries of a city and urban activity in a single location can damage forests thousands of kilometres away, or disrupt migratory patterns. Biodiversity increases the resilience of ecosystems to environmental change.
  • Forests serve as watersheds, habitats, carbon sinks, leisure amenities and tourist destinations. If managed sustainably, forests are also a source of energy and building materials.
  • Wetlands filter and process waste and act as a nursery for fisheries.
  • Sand dunes, coral reefs and mangroves protect cities from storm surges, prevent erosion and siltation, and in the case of the latter two act as nurseries for fisheries. Attractive coasts draw tourism.
  • Parks and greenbelts act as sinks for carbon dioxide (CO2) and counteract the heat island effect of large built-up areas. They also provide essential open space for urban residents, flora and fauna, counteract traffic noise and improve the general ‘liveability’ of a city.

To assess just how valuable the natural environment is to cities, let’s look at the role that forests on the outskirts of a city play.

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If a forest is cut down for firewood and to permit city expansion, the value of the forest is reduced to the value of the wood as fuel and the value of the land for development. However, forests help watershed protection, and their removal can jeopardise urban water supplies.

In addition, clear-cutting forests often results in serious erosion, damaging surrounding agricultural lands and causing urban flooding. Sprawling urban development imposes much higher costs on the provision of infrastructures such as roads, sewers, water and power.

It is, therefore, more cost-effective for a city to maintain its forest ecosystem as the city’s watershed, benefiting from all of the environmental services that the forest provides drinking water, erosion control, soil protection, flood control, recreation, biodiversity and to harvest the wood products at a sustainable rate from the forest in perpetuity.

Making sure that a city’s environmental assets are used sustainably is important to the urban economy for many reasons, in addition to the reduction of costs. As society and the economy marches inexorably towards globalisation, cities across all regions must compete with each other to attract enterprise, investment and employment. The quality of life or ‘liveability’ which a city offers is important in ensuring its future economic performance.

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Environmental resources are assets to a city: investment in environmental protection helps the economy and reduces city budget expenditure. It is far less costly to avoid environmental degradation than it is to live with its consequences or to repair its damage.

Interestingly, many municipal activities ultimately do protect the environment, even if that was not the primary intention: for example, actions to improve transport, protect water catchment areas or develop tourism also improve air quality, benefit sensitive wetlands and address coastal pollution.

The case study of Goiânia included in this report shows that certain urban plans and projects resulted in huge environmental gains, but these were a by-product of the main goal: concern for the environment was not the main driver. The most successful urban centres have a mutually rewarding relationship with the environment which builds on the city’s natural advantages and which in turn reduces the burden which the city places on its surroundings.

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Urban life provides opportunities for economies of scale in regard to human energy and material requirements. This has been referred to by William Rees as the “urban sustainability multiplier”, or the process through which the high density of urban living significantly shrinks the per capita ecological footprints by reducing energy and material needs. (Rees, 2003.)

These factors include

  • High population densities, which reduce the per capita demand for occupied land;
  • Lower costs per capita of providing piped treated water, sewer systems, waste collection, and most forms of infrastructure and public
    amenities;
  • A high proportion of multiple-family dwellings, which reduces per capita consumption of building materials and services infrastructure;
  • Increasing interest in forms of cooperative housing with mass transit facilities, which reduces demand for individual appliances and personal automobiles; and,
  • Easy access to the necessities for life and to urban amenities by walking, cycling, and public transit. This further reduces the demand for private automobiles, thereby lowering fossil energy consumption and air pollution (Rees, 2003).

Despite the essential services offered by the environment, however, cities tend to view environmental considerations as supplementary to economic and spatial strategies, or as issues which can be dealt with through infrastructure programming based on conventional civil engineering standards.

In other words, the environment has not been viewed as a matter of primary importance. Instead, prominence is given to the economic growth/public investment in infrastructure/poverty eradication nexus as the foundation for social development, and sustainability is not given the attention it deserves.

This approach is typical in many urban centres, particularly but not exclusively in developing countries. Mayors are under pressure to focus on economic performance and capital investment in infrastructure during their term of office. In China, for example, while many mayors are interested in environmental management, their performance in office is assessed by the local GDP growth rate (Conference on Eco-City Development Experience Exchange (ECODEE).

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If the environment is such an asset to cities, why is it often last on the list of priorities for urban managers? A key reason is the use of accounting systems that externalise real costs and do not account for natural capital. The planet’s forests, watersheds, wetlands, minerals and other natural resources all have a value that must be accounted for: these are natural capital.

While it is not difficult to place a capital value on an environmental asset, it can be difficult to calculate and to quantify the exact financial value of the benefits derived from that asset. A range of tools does exist, however, including environmental assessments, ecological budgeting and full-cost accounting methods. Some of these tools are outlined in an annexe to this report.

Misuse of the urban environment can have grave consequences for the city

Poor urban planning which permits construction on unsuitable land such as wetlands can result in damaging floods. Inadequate waste disposal leads to the spread of disease. Coastal cities which fail to manage their coastline efficiently will find themselves with erosion and siltation problems and are likely to lose valuable income from tourism. Urban sprawl will damage urban biodiversity, and the costs of providing infrastructure will be significantly higher.

Many urban settlements will be completely unable to keep pace with urban expansion, and unserviced slums will proliferate, with their attendant problems of poor health, poverty, social unrest and economic inefficiency. While healthy ecosystems provide cities with a wide range of services essential for their economic, social and environmental sustainability, damaged ecosystems have a very negative effect on urban

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