Austerity Urbanism and the Economics of Sustainable Cities

Money is often tight in today’s cities, something which was initially attributed to the early impact of the 2008 Global Financial Crisis (GFC). But the challenges associated with what was then known as the ‘current economic climate’ have lingered. The status quo for cities today is now often referred to as austerity urbanism – that is, the reality of urban planning and its associated projects in a time of severe financial strain. For some cities, environmental sustainability measures seem to come with a price tag beyond budgets. With no guarantee of economic growth, these often become a hard sell in a world of neoliberal economic values.

It’s common for the infrastructure that powers our cities to be old and inefficient. In England and Wales, 3.1 billion litres of water are lost every single day through leaking pipes. The congestion that holds up many inner city roads has a huge economic cost, but so does the infrastructure required to install a congestion pricing system. Despite numerous studies suggesting economic advantages from investing in bicycle networks, developing cycling infrastructure remains a low priority for many cities.

Though a transition to a more sustainable energy system is underway in many places, including for public and private transport, it isn’t happening quickly enough. When public transport networks and private vehicles are predominantly powered by fossil fuels, air quality suffers, followed by the health of a city’s residents. In UK cities, somewhere between 28,000 and 36,00 people die every year as a result of poor air quality – a human tragedy with economic repercussions. The cost of transforming public transport and establishing higher emissions standards might hit city dwellers in the wallet, but the social, environmental, and economic benefits would bring benefits.

Despite general consensus on the scale of our environmental challenges, it is common for sustainability to be sidelined as cities embark on development plans. Cape Town’s efforts in forming Economic Development Partnerships between local and regional agencies represented an attempt to build a more vibrant and inclusive economic future for the city, though details on environmental sustainability were vague. The city justifiably aimed for an evidence-led economic approach to bring down stubbornly high unemployment levels, as a result bringing up the much-discussed question of whether developing regions can forego sustainability concerns when pursuing growth rates comparable to other developed and developing countries.

Madrid is considered by many to be one of the most liveable cities in the world, and a past debt-fuelled strategy to development could be part of the reason for this. The city is home to one of the most reliable and extensive transport systems in the world, buried highways topped with open space, and beautiful public parks. However, while these developments made the city a better place to live, the economic impact of pursuing this strategy, combined with the GFC, put the city’s finances and future development at risk and ushered in years of local governance frugality (albeit with a leftist twist). Though it would be inaccurate to attribute the city’s economic struggles solely to infrastructure investments made by local and national government, they are a contributor and a reminder that economic sustainability remains an important part of urban governance in a neoliberal world, like it or not.

It is hard for city governments to justify investments in sustainable urban development when budgets are already stretched. Though environmental sustainability is a long term economic investment, it is also a short term necessity which no one can truly opt out of. Social investments in citizen wellbeing are hard to quantify but essential for creating sustainable cities. Where the economic data doesn’t exist, or is questionable, understanding the tangibility of their impact is probably the next most persuasive tool available to city governments, urban stakeholders and citizens.


Photo: justified sinner. This is an updated version of a post originally published in January 2012.

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