URBANIZATION TRENDS

For the first time in history, more than half the world’s people are urban. Between now and 2030, the world’s rural population is expected to remain largely static, while the urban population is projected to grow by 1.5 billion people.

By 2030, 60 percent of the global population will live in cities. Over 90 percent of that urban growth will occur in cities and towns of the developing world, mostly in Africa and Asia.

The urbanization of the global population has fundamental ramifications for the economy, society and the environment. Urban centres currently cover only a small part of the world’s land surface - 0.51 percent of the total land area. However, urban areas will expand significantly during the next two to three decades.

Based on current trends, urban land cover will increase by 1.2 million km2 by 2030, nearly tripling global urban land area between 2000 and 2030. Cities cover a small part of the world, but their physical and ecological footprints are much larger. Cities accounted for 82 percent of global GDP in 20143 and by 2025 this will rise to an estimated 88 percent. There will be 230 new cities by then, all in middle-income countries. One hundred cities in China alone may account for 30 percent of global GDP at that time.

Cities produce more than 70 percent of the world’s greenhouse gas (GHG) emissions4 and use 80 percent of the world’s energy.5 The International Energy Agency projects that

urban energy-related GHG emissions will rise from around 67 percent today to 74 percent

by 2030.6 Cities also host most of the world’s critical infrastructure, key development assets, political institutions and major socioeconomic activities. Global analyses of climate change and disaster impacts show that a high proportion of the people and economic activity affected by extreme weather events is concentrated in urban centres.

Cities’ vulnerability goes beyond exposure to climate change impacts and extreme events. Violence and crime are pressing issues in many urban areas. The urbanization process in developing countries is often poorly managed, resulting in inequitable, exclusionary and fragmented cities and increased risk of violence, especially among disenfranchised sections of the urban population that cannot access the formal political system, including refugees and Internally Displaced People (IDPs).

While there are challenges to be addressed, there are also critical opportunities to be seized in making growth more sustainable, inclusive and equitable, cities more resilient and their inhabitants less vulnerable. Urban residents in well-planned cities enjoy better

access to employment opportunities, health care, education and public services compared to their rural counterparts. Well-managed urban areas have lower per capita energy, climate and ecosystem footprints and lower costs per person for infrastructure and basic services. And the concentration of resources, ideas and energy in urban areas is fertile ground for the creativity and technological innovation needed to solve the many developmental challenges the world faces today.

Millenials in their 20s and 30s are moving into cities at an astounding rate, attracted by the concentration and density of people that they can connect with. At the same time, companies, including startups companies, are increasing moving into dense, dynamic and energetic urban centers where talent entrepreneurs, infrastructure, knowledge and capital are clustered. These two mutually reinforcing dynamics are shifting and shaping the way cities are developed, spurring innovation and revitalization, creating new relationships between local residents, companies and local governments, as well as exposing underlying challenges in cities.

Cities are also home to significant concentrations of the poor and marginalized. Urban poverty is growing12 and the World Bank estimates that, by 2035, most of the world’s extreme poor will be found in urban areas.

Urbanization has significant impacts on the environment and the well-being of urban dwellers. Cities are key contributors to many environmental problems, such as air and water pollution. Pervasive levels of air pollution has been seen recently in China, India and Mexico City. For many cities, municipal waste is a significant problem. Globally, 3 billion urban residents generate 1.2 kg of waste a day - 1.3 billion tonnes per year.14 This generates challenges such as GHG from transporting waste, marine pollution (including plastics) from coast cities, shortage of land for landfill sites and health hazards such as cholera outbreaks, from informal dumps and untreated waste.

Cities are highly vulnerable to climate change impacts. This is due to the fact that many cities are located in highly exposed coastal areas and riverbanks, which are prone to sea level rise, typhoons, storms, flash floods and landslides. Urbanization also displaces open space such as farmland, wetlands, parks and forests and reduces water supply as excessive ground water usage depletes water tables. These degradations significantly reduce the ability of natural ecosystems to filter air and water and provide other ecosystem services.

 

The impacts of climate change and disasters in cities disproportionately affect the poor, who normally settle in compact settlements and slums, on riverbanks and steep slope areas where land is more affordable or settled illegally. These areas are often prone to floods, storms and landslides. In addition, people living in these areas tend to hold informal settlement status and thus receive inadequate or no basic infrastructure and social services support. About one in seven people in the world lives in deteriorated and overcrowded spaces in urban areas.

By 2040, the world’s energy systems will need to serve 9 billion people, with two thirds of them in urban areas. The urban poor in many developing countries who typically have access to some electricity face a number of challenges. They experience irregular supply, frequent blackouts and quality problems associated with the grid electricity such as low or fluctuating voltage.16 Affordability is another barrier, due to high connection fees and tariffs. This can lead to continued use of unsustainable energy sources such as kerosene for lighting or solid fuels for cooking and heating, which cause indoor pollution and increased health and safety risks. Informal or illegal connections are also a common practice in many urban centres. As economies develop, energy demand also increases significantly for uses such as refrigeration, heating and cooling. In Mumbai, India, for example, 40 percent of total electricity consumption is for air-conditioning.

Many cities remain strongly divided and segregated spatially and socially. High and extreme inequality in cities is a driver of violence and unrest. In Latin America, UNDP’s analysis points to a correlation between urbanization and rising crime where institutional capacities to include marginalized groups are inadequate. Conflict-affected countries such as Sudan, Somalia, Yemen, Lebanon and Iraq have cities characterized by an abundance of slums, comprising 50 percent to 90 percent of total urbanization.

Vulnerable groups such as youths, migrants and IDPs often experience marginalization and stigmatization. Amidst waves of conflict- and disaster-driven migration, the displaced are increasingly seeking refuge in urban areas, with over half of the world’s 38 million ID Ps and 13 million refugees living in towns and cities. Beyond displacement, economic migration continues to be a major factor in the growth of cities. In many global

cities such as Sydney, London and New York, migrants make up more than one third of the population. In Asia and Africa, fast-growing secondary and tertiary cities are expected to absorb much of the future population growth through migration, with many migrants moving to, from and amongst rural and urban areas in seasonal and circular flows.

Inequality between cities is also growing. The increasing concentration of wealth in a few attractive cities is driving up the cost of living, forcing lower-paid residents to migrate to distant suburbs or relocate entirely.

In many developing countries, urban unemployment and underemployment are now a rising concern, particularly for youth, women and marginalized groups. One major element of city economies that still generates less attention is the informal economy, yet it accounts for 50 percent to 80 percent of a city’s GDP and provides livelihoods for the majority of poor and excluded groups in many developing countries.

Limited public space for city residents to access and limited opportunities for the public to influence decision-making regarding public space or land use22 expose cities to the risk of future internal conflict (gang violence, riots, civil unrest) and social exclusion based on a population’s immigration or socio-economic status. It also leads to a range of other issues such as reduced physical and mental health and reduced adaptive capacity to cope with heat island effects and flooding.

In order to meet the SDGs by 2030, around 40 percent of the world’s population will need proper housing and access to basic infrastructure and services such as water and sanitation systems. This creates significant pressure on land and housing, particularly in urban areas where supply is limited and policy and regulatory frameworks to manage demand are poorly developed. The urban poor and other vulnerable groups (migrants, IDPs, female-headed households) fare worst, as they lack access to housing, tenure security and land ownership. In many developing countries, this often leads to the emergence of slum settlements. Municipal administrations play a major role in ensuring proper urban planning, service delivery and creation of economic opportunities (e.g., the 14 million jobs that need to be created each year for young people).

However, urbanization is peaking where the capacity to govern is in short supply. Rapidly growing cities in developing countries are struggling to provide the infrastructure, services and governance systems needed by their increasing populations as they deal with competing priorities and demands.

The decentralization reforms that have occurred in many countries, such as in Latin America, have given local governments and local communities increased influence on policies in urban areas. Yet, fiscal decentralization lags behind. City leaders repeatedly point to the lack of urban financing as one of the primary barriers to long-term development. In many instances, the lack of financing options also drives cities towards unsustainable short-term solutions, for instance by selling land for commercial development as a means of financing municipal infrastructure, as has been common in many parts of China. Many municipal authorities, particularly in developing countries, continue to lack access to revenue and the autonomy to generate revenue. Access to affordable finance and enhanced administrative capacities is still needed at all subnational tiers of government – municipal, metropolitan and regional.

Public authorities face increasing difficulty in maintaining effective governance in large cities, due to corruption, the erosion of governance and institutional capabilities in the justice system, law enforcement and security institutions, and poorly managed public space. The degree of social integration and cohesion in a community also affects the rates of crime, violence and peaceful coexistence. Without strong participatory governance systems, the needs of the poor and marginalized, particularly of migrants, IDPs, women and minority groups, are often neglected. Developing countries will need efficient, multi-tiered policy and institutional mechanisms to address the complex and interconnected consequences of urbanization across all tiers of government and with non-state actors. Urbanization is not a challenge exclusively for cities. The shift of populations to urban areas also has economic, social and governance consequences for peri-urban and rural areas that need to be addressed. These surrounding territories provide vital goods and services to cities such as labour and natural resources. In many developing countries, working-age rural dwellers migrate to cities in search of economic opportunities, leaving the very young and the aged behind in rural communities.

Rural-urban migration can also be highly gendered. In many regions, it is mainly the men who leave in search of work, leaving women to work the fields and manage the burden of care.26 In other countries, women go to cities for employment in households, factories or service industries, which provide them with better incomes and greater economic and social empowerment, but also exposes migrant women to the risk of exploitation.27 Declining populations in rural areas also pose challenges for agriculture and for continuing to maintain social service provision for smaller, scattered, aging populations. These challenges are already evident in Europe28 and Japan,29 presaging challenges that developing countries will face in years to come.

The rise of the middle class is becoming more apparent in many regions. In 2009, 1.8 billion people were considered to be middle class, with Europe (664 million), Asia (525 million) and North America (338 million) accounting for the highest number of people in this group. It is estimated that, by 2030, the middle class will account for nearly 5 billion out of the world’s 8 billion people, with most of them living in urban areas. This will continue to drive up global demand for food, water, transport, energy and housing and contribute to GHG emissions, particularly in developing countries where most of this urban growth occurs.30 All 10 of the fastest-growing cities in the world at present are found in developing countries in Asia and Africa. The process of urbanization and the types of cities that emerge in the developing world will deeply affect outcomes of many development challenges in the post-2015 era. The infrastructural and economic characteristics of these growing cities will help determine humanity’s ecological and climate footprints and the degree to which societies are resilient to future climate, social and economic shocks. Success in poverty reduction will be influenced by the degree to which urban poverty is understood, identified and overcome in this urbanization process. Ensuring that these cities develop on sustainable development trajectories is therefore one of the biggest challenges and opportunities on the development landscape.

 

Source: Urbanization Trends. SUSTAINABLE URBANIZATION STRATEGY: UNDP’s Support to Sustainable, Inclusive and Resilient Cities in the Developing World. United Nations Development Programme 2016