All Essays and Blog Posts from Low2No

A New Phase for Low2No

Wed, 05 Sep 2012 23:28:00 -0700

September 1, 2009, almost exactly 3 years ago, Sitra announced the winners of our Low2No competition. It was a very exciting moment with a successful competition process behind us, and the promise of a brave new world ahead—little did we know of the joy and tribulations that this initiative would bring us. It has been a very positive learning experience to work with the on-the-ground challenges of shifting development patterns towards a low carbon future. Building our understanding and ability from an integrated approach to the challenge, we sought to implement a transitional, low carbon urban development model.

Our role was unique: an enabler of market transformation. Low carbon/sustainable development has not (and will not) emerge by itself. Our lever in low2no was our direct investment in the building complex in the form of Sitra's new, more collaborative office space, We supported this work with our unique role in Finland as an "influencer" who was able to work between the various stakeholders. This impact investment role (aligning our endowment capital investments with our strategy) enabled us to shift the conversation about value to another place and help de-risk the notion that sustainable development was a poor investment.

As some of you now already know, in early May Sitra's Board asked us to explore options to divest from the Low2No (Airut) office building. During its May 28th meeting, the Board officially made the decision to divest of the project, and this news was made public in Finland on Friday June 8th, 2012. The official Sitra press release can be found here. Clearly, the Board's request caught us by surprise and we have since been busy adjusting to a new reality. I must note that it has been surprising to see that our change in position has not generated more of a public conversation in Finland. We are not sure what to make of that…

Lot's of great grass-root activism in Helsinki, but how to scale it up?

Since the June announcement, we have been negotiating with SRV, VVO (our development partners) and the city to transfer the development rights to our partners and are negotiating our potential role in the venture going forward. We are also exploring our options in pursuing Low2No through complementary national applications that would explore how to create the conditions for the market and municipalities to transition cities burdened by structural challenges towards carbon neutrality and other related questions). Between cleaning house on our investor/owner role in the Airut block in Jätkäsaari, and our next steps there is some positive news too: we are happy that our Low2no food theme has found robust roots in the “Open Kitchen” initiative aimed atdeveloping food entrepreneurship in Finland. Read more about the great work Bryan, Dan, and Kalle (and the rest of the team) are doing on this front here.

Onwards.

Low2No smart services workbook

Thu, 28 Jun 2012 11:14:00 -0700

Unlike most projects with a building at the centre, many of Low2No's outcomes are intended to be systemic, concerning wider urban systems, and sometimes positioned at the edges of, or even outside of, the building industry. For example, the use of timber in the building is partly a sustainable building materials choice but also presents a new trajectory for the Finnish forestry industry, an adjacent if not external industrial sector. See also our work in "everyday food", and associated systems and cultures.

This is something that a traditional building-led project tends not to do; why engage in strategic benefit for an ancillary industry? We think it's important that buildings are no longer considered to be "one-offs", and to strategically "smuggle" as many systemic benefits as possible into such a project. In this way, a few hundred metres of Jätkäsaari delivers value well beyond the red line surrounding the project's site, and might enable sustainable outcomes well beyond those how experience Airut (the physical block itself). Given the investment and effort required in making buildings happen, this only seems reasonable (more on this general approach here.)

As well as timber and food, there is what the project has been calling "smart services". Also known as urban informatics, this aspect explores the potential of contemporary technologies - particularly those increasingly everyday circling around phrases like social media, "internet of things", "smart cities" and so on - to enable residents, workers, visitors and citizens in general to live, work and play in and around the block in new ways. These are predicated on the same low-carbon outcomes that drives the Low2No project in general, but also a wider "triple-bottom line" approach to sustainability, which might include beneficial social and economic outcomes, as well as environmental. We'd had this element in from the start, from the Arup-led consortium's original competition submission in 2009, and today we're sharing some of the work-in-progress as it developed, in the form of the "informatics workbook" developed by the design team, as a tool in the design process.

Informatics Workbook v2, with v1 underneath.

This world of personal sensors like Nike Fuelband, smart devices like the Nest, and social media like Facebook and Foursquare might indeed be "increasingly everday technologies", but they tend to remain almost entirely alien to the building industry, most architectural practice and wider world of urban systems (especially urban governance and operations.)

Similarly, many contemporary approaches to sustainability hold back from addressing behaviour change. One can understand, at a basic level why this is — who wants their behaviour changed, after all? And certainly city governments would find this difficult territory politically, just as architects and engineers don't have the skills, or property developers think it's not really their job. Yet we know that a huge proportion of the carbon footprint for settlements and communities is not in the building project at all — at least as they are usually conceived — but in the behavioural choices that citizens make once they occupy the space. Equally, we would argue that all of the above do actually create behavioural change, just not necessarily consciously.

Hence our desire to use the building project as a "Trojan Horse" to warrant a reason to look at this potentially powerful combination of smart technologies and services — with an emphasis on the latter — and in enabling positive behaviour change amongst the various groups who will use the block.

Arup and Experientia worked on this aspect of the project, together with partners Sauerbruch Hutton and clients Sitra, SRV, and VVO. Over a couple of years of engagement, with Experientia leading and driving, and Arup (mainly my team in Sydney at the time, and principally Jason McDermott) working on the informatics aspects in particular, the project's design team produced some rich thinking about how to embed the potential of this area at the core of the project. One of the key challenges in this area is that there is rarely anyone on the wider design team or the client body who understands this area — hopefully this will change, and we present this work as a possible instrument to aid that cultural change. This was known as the "Informatics Workbook" amongst the project team.

Low2No Informatics Workbook print-on-demand version
You can order a physical copy, and Lulu will send it to you

Low2No Informatics Workbook PDF version
Download it

This work often involves positioning these otherwise technology-led areas in a more human-centred, and behaviour-oriented, framework — getting well beyond the hype about "smart cities" — whilst also trying to connect it to business drivers (the lack of the latter has hampered pretty much any serious progress in smart cities.)

A particular approach has been a focus on active rather than passive citizens. Too often such technologies can suggest an automation of processes without thinking through the behavoiural implications. In a nutshell, why design or install energy-consuming machines to turn off task lamps on desks, when human beings are quite capable of this? Moreover, if machines turn off the lights, humans — being the lazy homo sapiens that we are — may well just mentally "outsource" that entire process without thinking twice. And it's partly the lack of "thinking twice" that has got us into this mess, arguably. We'd rather people took responsibility for things they can, and so connect their behaviour to the performance of the wider systems they exist within — and so begin to understand the relationships between individuals, communities, environments and systems in more detail — whilst leaving machines to do the things that are a good use of their time too. We knew we had to go beyond simplistic "smart meters", which began to feel like a waste of time, effort and policy-making, largely, in terms of their ongoing effect.

Some of this insight was drawn from other Arup projects at the time, working with behavioural psychologists/marketeers like Naked Communications, as well as Experientia's deep research efforts on the ground in Helsinki and elsewhere, led by Jan-Christoph Zoels, Irene Cassarino, Camilla Masala and others. It is tacitly an attempt to bring user-centred design practice into the way we make buildings.

As a result, the book starts with a series of scenarios, illustrating potential behavioural patterns, as a way of surfacing potential products and services.

Scenario

These are, as is the way of such things, exploratory, ambitious, over-baked and perhaps impossibly utopian. But they are part of the process, no more; certainly, not a prediction or guideline. They are there to help open up a new conversation. And although persona-scenario work is as old as the hills, in terms of interaction design, it is rarely used in building projects (sometimes with good reason, as the users of the building in 40 years time may not exist yet; but generally for bad reasons.) So the persona-scenario work is useful with clients as a medium for the conversation.

Scenario

The diagrams of flows, overlaid on the (now-outdated) block, developed by Jason and me, are perhaps just as interesting.

Combined scenario flows overlaid onto block diagram.

This culminates in the interaction map, akin to a subway map, which enabled us to pin dense pockets of interactions onto the architecture.

Interaction map

Note also the attempt to make the value clear to the client group of Sitra, SRV, VVO and City of Helsinki, on their own terms. This doesn't happen often enough in design work. I'm not entirely sure we got it right here, either, but it's an attempt.

The prospective products and services that emerged from this narrative-led process were then selected and filtered for further development, resulting in a suite of products and services for the block. We spent some time on how they might be woven together, and Experientia's work developed some of the software-led feedback loops in particular. There are mock-ups of some of those services in action, which we hope to post here too shortly. We also looked at the (software) architectural elements, such as how these various "small pieces loosely joined" might form a coherent whole, sharing data via civic APIs (including external services such as public transit data), separating data from content from presentation across various platforms, and so on. There are hints of that work here, but Arup's team, led by Léan Doody, produced detailed technical, strategic and operational reports that supported this vision.

This is a fuller set of ideas. There were even more generated during the design process as, of course, ideas are the easy bit! This was ultimately whittled down to a smaller set for consideration by the client group, alongside Experientia's work at the service, business and community level. We present them all in the informatics workbook for you to adopt and adapt.

AR-enabled maintenance tool, for managing block services.

As the technologies change so rapidly (this already feels distinctly like a document from 2010!), we decided to render them abstract, and focus on the architecture (which will hang around a while and not change so much), the people, and the service layer itself. There are notes in there about business models, but we've left out much of the discussion there, as some of it remains confidential as regards our partners, and is perhaps less transferable to other contexts.

In-lobby smart home delivery pigeonhole interface

Nonetheless, this is an attempt to describe how Low2No might produce a "genuinely 21st century building", beyond simple advances in form or material and into new areas for building, architecture, placemaking and the practice of city making. You should be able to perceive that philosophy underpinning some of the work featured in this "workbook".

It also illustrates design cues for the product sketches, which are otherwise deliberately sketchy, to create a connection with the architectural design process, and make clear the value in synthesising the development work in digital interactions (interaction and service design) with that of physical interactions (typically, architecture and industrial design). This palette section works as a form of "interaction mood board", then. Equally, we wanted any informatics services to feel, physically and digitally, part of a holistic design process. So the 'social noticeboard' idea is presented as a curved series of coloured rectangles, drawing a few hints from Sauerbruch Hutton's fabulous back catalogue. Hints, no more, but this again starts a conversation. It's also pragmatic; too often screens are added to buildings after the design process, with the result that they look awkward and don't get used (research from Oulu indicates that citizens already tend to "blank out" urban screens.)

We wanted to ensure that services might be developed with care, and in unison with the detailed architectural design. Even the earliest of sketches, such as those presented here, can help or hinder that process.

Palette pages.

The photo essays, based on my fleeting observations of Helsinki when working on Helsinki Design Lab studios, are also intended to be a little impressionistic, focusing on giving a different sense of possibility in terms of citizens' interactions and street life in a changing Helsinki, beyond the outdated stereotypes of taciturn, withdrawn Finns or frozen seascapes. Yet Helsinki does have a distinct feel; it's not as if this small series of photos can capture that, but this section's existence does at least try to ask questions. They were often presented as pairs, or counterpoints, to suggest this.

Photo pairs

The text tops and tails this with some context about informatics and smart cities in general, pointing out the potential in this area, particularly for public bodies and city governments. It ends with a note about the potential of the "ongoing post-occupancy evaluation" for generating strategic insight, moving beyond building to city, and to network of cities.

For what would traditionally be a consultants' report, we also took a different approach and tested the Lulu print-on-demand service, designing the document specifically for that platform. The book is intended to be easily browsed, easily carried, in handbag or briefcase, and used physically token in client and design meetings. Compared to the usual reports delivered in PDF or worse (Microsoft Word) I can tell you this made a difference. Print-on-demand means only the minimum need be printed, and printing can be potentially local to the recipient (bonus carbon points, there, perhaps.)

In some senses, it's a little out of date, as the book was delivered in late 2010. It marks the project at that point, but remains relevant, as there are few publicly available examples of what informatics/internet of things/smart cities work actually looks like in the trenches, from within a building project. This "Informatics Workbook" was then merged with Experientia's excellent work on wider service design aspects around the project, presenting it amidst their genuinely groundbreaking work on behaviour change and lifestyles for Low2No. That is the context it should be seen in, rather than any idea of technology-led work. We'll try to present that here too.

Since this book, the project has continued to develop the ideas, in particular at a workshop last December in Jätkäsaari, featuring representatives from Arup, Experientia, Granlund, Sitra, SRV and VVO. There, and subsequently, a focus on enabling smart block management emerged, including ideas around 21st century "talonmies" (which is shorthad for janitors, essentially, but also here suggesting housing committees, and other aspects of block management.) SRV in particular may take this work forward, dovetailing it with their existing building systems and businesses.

Note: these print-on-demand books are designed to be updated. This is actually version 2, as you will note. So it is explicitly "work in progress", and that should serve as a caveat. (This was the first time we'd tried this approach, which we took further with the Helsinki Street Eats book: here, and discussed here.)

Low2No Informatics Workbook print-on-demand version
You can order a physical copy here, and Lulu will send it to you

Low2No Informatics Workbook PDF version
Download it

Announcing Helsinki Street Eats

Wed, 21 Mar 2012 16:00:00 -0700

Amongst the many facets, one aspect of Low2No is what and how we eat. Today we're publishing a 98 page book on street food of Helsinki that explores this topic.

Especially for a place with the northern climate and high meat & dairy consumption habits of Finland, food production and consumption are key concerns when you're interested in carbon.

We've been looking at street eats as an example of "everyday food", the stuff that's close at hand such as late night snacks, kiosks, bakeries, food trucks, and the like. In fact, let's take a slightly modified excerpt from the book page:

Street food describes systems of everyday life. In its sheer everydayness we discover attitudes to public space, cultural diversity, health, regulation and governance, our habits and rituals, logistics and waste, and more.

It can be an integral part of our public life, our civic spaces, our streets, our neighbourhoods. Street food can help us articulate our own culture, as well as enriching it by absorbing diverse influences. And it can enable innovation at an accelerated pace by offering a lower-risk environment for experimentation.

Street food can do all of these things, but it doesn't necessarily.

This book is an attempt to unpack what's working and what isn't in Helsinki, and sketch out some trajectories as to where it could go next.

Why is food important to Sitra? Three reasons:

It enhances social sustainability: as a social object, food creates new connections between people and cultures. At a moment when Helsinki's non-Finnish-born population is expected to double in the next 10 years, this is critical. But it's not just about native and immigrant, the production lines and supply chains of food also connect across domestic geography and other demographics such as income.

It is a big part of our carbon footprint: changing carbon-intensive behavior in Finland means changing the way we eat. By focusing on how we can create more room in the market for local, organic, low carbon foods, Sitra is seeking ways to mitigate this important aspect of human behavior without sacrificing quality of life.

The service economy needs innovation too: often the story of economic growth in Finland fixates on technology, but this is a country rich in cultural and culinary assets that are waiting to be utilized as part of a unique, high quality service offering. Food and food businesses are a key opporunitity in this space.

And why now? Incursions like Ravintolapäivä and the city's first food truck Camionette indicate Helsinki is at a moment when we can also use food to understand the relationship between citizens, governance and innovation. For instance, Ravintolapäivä serves up a series of unanswered questions about what our cities' streets can do, who are they for, who decides that, and how do we decide that, as well as implicitly suggesting that our existing food business regulations may be less than 'user-centred'.

Hope to have more to share later this year as we begin to prototype some of these ideas, but for now grab a copy of the book here!

Timber construction growing in Finland

Thu, 13 Oct 2011 16:06:00 -0700

September 2011 rendering of Sitra's ground floor showing the timber facade, finish materials and precast concrete podium on which the timber frame/CLT office building sits © Sauerbruch Hutton

There are many advantages to using timber as the principal structural material in large buildings (also see this):

on the economic side, timber reduces conveyance and logistical costs, reduces construction time and eases work performed by downstream trades
on the environment side, timber building materials provide long term carbon sequestration; when harvested sustainably, timber stocks tend to improve carbon sink capacity over un-managed land
socially, especially in Finland, timber is a preferred finish material for its warmth, texture and connection to historic buildings and nature

Timber construction was identified early in the Low2No project as a promising way to meet our sustainability principles and is being developed as the main structural and finish material for Sitra's office building, a first in Finland.

As mentioned earlier, SRV and VVO (our client team partners) were unable to rationalize timber construction for the residential buildings, citing market conditions and other risks as limiting factors. At the time, Finland's new fire code (developed with Sitra) that allows for multi-story timber construction was hot off the press and I think the known unknowns of this code's implementation introduced too much risk into a project already loaded with "many innovations."

One 8 story CLT building binds 850 return trip flights from JFK-LHR eCO2

But just last week, SRV announced that it had entered into a partnership with Finland's forestry giant Stora Enso to build a mixed-use (commercial, office and hotel) timber building in Jätkäsaari! We are thrilled with this development. This is something we have been pushing for a long time and we hope it to be the next step that starts a wave of timber construction across Finland.

The project will use Stora Enso's proprietary approach to multi-story cross laminated timber (CLT) construction. Interestingly, their marketing for the product focuses in the quantity of carbon that an 8 CLT story building will bind for the long term. Turns out, it is about the same as 850 return flights from London to New York City! Watch their promotional video here.

While we would have loved to see this partnership initiated under the banner of the Low2No block, it is clear that Low2No is exercising a gravitational force that is pulling the industry foward and beginning the long transition to a future built environment that is carbon neutral.

41. Week in Review

Fri, 07 Oct 2011 04:26:00 -0700

BIM model screen shot of Sitra's timber office ©Arup

Back on the job here at Low2No. Work has been proceeding at a blistering pace in London and Berlin as our design team prepares to deliver our L2, or design development, drawings next week. This is a significant point in the project's progression as "end of L2" is when the local designers will take a leadership role in project implementation.

Interior BIM model screen shot of Sitra's timber office ©Arup

This month is the moment when the client team will step back and perform two critical tasks: costing and project review. Even in strong markets, a €60M investment can cause some consternation. But as the euro's stability decreases with every news cycle, we have some difficult decisions ahead of us.

We are committed to a triple bottom line plus carbon (TBL+CO2) approach and will review this next phase with this principle as our top level priority. It is increasingly clear that planning requirements and real estate costs make development in Helsinki difficult, especially without basic government support instruments (such as feed-in-tariffs), but we hope to find a way to make a low carbon, mixed-use development economically viable.

BIM model screen shot of Sitra's timber office ©Arup

Interior BIM model screen shot of Sitra's timber office ©Arup

The client team is working to develop a joint company (landlord/janitor company) to own and manage the block's common infrastructure, energy infrastructure (PV), commercial space, and parking. When developing a block-wide sustainable solution, shared ownership provides critical synergistic benefits and is necessary to manage the block's shared resources as one entity. A joint management company solution is a new step toward social sustainability in Finland.

Sitra is also organizing a meeting with leadership from the real estate industry who are involved in writing new legislation for "3D" real estate formation (mixed-use code)—possibly to be implemented for the first time in our block. A mixed-use code will allow challenging ownership conditions to be overcome more easily, such as the one we face in our block, where the basement can have property lines independent from above ground property.

Word comes from Jukka this week on two projects he is shepherding: the European 11 Competition (he is a jury member and will tell more once it is public) and a board meeting of the LAICA project which helps individuals commercialize innovative energy solutions. The Energy Programme has continued to expand its impact and we look forward to more.

Welcome back to Low2No!

Mon, 03 Oct 2011 03:57:00 -0700

Over the past 6 months, we have been hard at work designing and building a new home for Low2No. This new site is intended to both be a place to learn more about the city block that we are building in Helsinki's Jätkäsaari district (recently named Airut, but more about that later) and provide a platform for a global discussion around transitioning the built environment to a low carbon future.

Diagram of the website's "code commits" since April 2011. A code commit is when the developer takes a snapshot of the site and saves it as it is being coded. In this phase, there were 336411 lines of code added, 32001 lines deleted.

Thank you to XOXCO for their tireless work on the back end of the site, and to Muotohiomo for design. Well done. Also thanks to my colleagues Bryan, Annemaria, and Olli.

The city block now has its own section on the site: the Block page where we will discuss the latest developments in its design, energy and carbon strategy, support of the people that will occupy it and some of the materials that have been developed by our team along the way.

We still believe that our Low2No competition was one of the most innovative approaches to sustainable design of the built environment anywhere, so we have refreshed and explained the many dimensions of that project here.

To the sustainability/carbon discussion side, we are beginning to open up a new area of work called the Low2No model. Low2No has always been a broad project with many initiatives. This had to do with the nature of challenge (the built environment has an extremely large set of stakeholders and areas of work), and also Sitra's mission (we work between sectors to promote systemic change).

Under the banner of the Low2No model, we are looking more directly at how our transitional approach to decarbonizing the built environment can and is being applied outside of our development project in Helsinki. We hope that this area of work will flourish following some key decisions that will be made by Sitra in the coming months.

Our new site coincides with the release of three articles, or in-depth looks at the issues central to the challenge of sustainability and the built environment as told by leading professionals from around the world.

David Wood from Harvard's Kennedy School of Government discusses the role of private finance in building a sustainable city. Tuuli Kaskinen and Roope Mokka from Demos Helsinki reflect on their work in enabling individuals to help consumers make more energy and carbon conscious choices. And Federico Parolotto and Francesca Arcuri from Milan-based Mobility in Chain propose a better way of managing mobility and transportation planning.

These are original articles supported by Sitra and are the first of a series that will be published every month or so.

we are looking more directly at how our transitional approach to decarbonizing the built environment can and is being applied

Finally, we will be publishing a series of dossiers that provide a broad look at issues such as carbon, energy in buildings, enabling people to make more sustainable choices, smart systems and services etc. The dossier format provides a way to expose and organize the myriad of issues, challenges and recent developments that each topic encompasses.

This site will live and breath as we move forward with the Low2No project and will provide us the flexibility to add content as we go. Please check in regularly or subscribe to our RSS feed. And let us know what you think!

Holcim Awards Sitra's Office Design!

Sat, 24 Sep 2011 00:20:00 -0700

The venerable Holcim Foundation has awarded Sitra's office building design an acknowledgement prize! Congratulations to Sauerbruch Hutton Architects (as main authors), Arup and Experientia! The Holcim Jury recognized the multi-story timber office design as being exceptional and the low-to-no carbon emissions principle as a significant contribution to sustainable development.

Juan Lucas Young and Andrew Kiel (Sauerbruch Hutton); Jan-Christoph Zoels (Experientia); Leo Mittelholzer (Holcim Foundation)

The Jury statement read: In terms of its construction and program, the office building is commended by the jury for achieving the aspired principles of transferability, transparency and inventiveness. All of the construction, even the cores and the prefab façade panels will be entirely in Finnish timber – globally an innovation for a 26m high 6-storey office building. Beyond these measures, the project has a successful holistic approach towards its design, connecting social, ecological, aesthetic and economical demands on a high level and it is thus an outstanding example of how sustainable architecture can be achieved on a larger scale. More in the award report here.

We hope that this award will help raise the profile of timber construction and an integrated design approach here in Finland.

Low2No Camp: the making of urban entrepreneurs

Fri, 23 Sep 2011 20:17:00 -0700

A guest post by Outi Kuittinen of Demos Helsinki reporting on this week's Low2No Camp round table:

Low carbon living is about low-energy buildings, superb public transport and smart metres. It is also about groups and individuals that make our cities more beautiful, more flexible, more satisfying, more democratic and more sustainable. Low2No Camp organised by Demos Helsinki with support from Sitra, started this May by bringing together 25 passionate urban activists from Helsinki. To feed their imagination and to raise their bar higher, we shipped them to Berlin in a cargo ship to teach and to learn how to make our cities more sustainable and better to live. Back in Helsinki, we asked them to build their solution for a sustainable city and let them loose.

In summer months the campers were busy organizing their usual stuff like Helsinki Night Bike Rides, Ravintolapäivä (Restaurant day), Kallio Block Party, Punajuuri Block Party and farming urban vegetables. But on those hot days they also scribbled a lot of Post-its, discussed over Facebook, met face to face and sketched presentations thinking and thinking how to scale up what they are doing.

This week in Jätkäsaari they came out to potential partners. What we saw was our urban enthusiasts grown into urban entrepreneurs. They want to change the way we produce our food, use our space, dress ourselves and think of our possibilities to make the city our own. We are very proud to present 100 Ways to Eden, Hukkatila Ltd, pukuhuone.fi, School of Activism and Aquaponics Finland.

What is common to these ventures is that they don't do it all ready for us but enable us, the citizens of the city, to do ourselves.

100 ways to Eden is a cooperative that scales up urban farming. First they will take Pasila and create an urban farming centre in an old railway yard. It will harbour education, research and development on urban farming, plus exhibitions, food markets and gastronomic experiences. Next they will take Europe and Russia.

Hukkatila Ltd is a development company exploring the blue ocean of built environment: the mis- and underused square- and cubicmetres of the city. That is, for example the offices outside working hours, the basements of block of flats, derelict houses, areas waiting for the construction to start. The streetwise experts of Hukkatila will couple these spaces with right users in need, develop concepts to bring the space alive and invest in building the activity.

Pukuhuone.fi (The Dressing room) believes that in ethical and ecological consumption clothes are the new food. Pukuhuone.fi is a web-based service that helps us to develop our own style by providing well-edited inspiration, bringing us the providers that offer quality and style instead of fashion and throwawayism, enabling us to lend and rent clothes and telling how to take care of our belongings.

School of Activism continues what Low2No Camp started. It builds networks of passionate actors and seeds urban activism where its needed. It travels to help local people to solve the problems of their city. From the point of view of the public sector, School of Activism helps to commit the citizens to their city and to bring about fresh solutions. For companies it offers new creative contacts and ideas.

Aquaponics Finland is a closed system of food production that supplies us with plenty of fish and vegetables – grown in our homes, schools and neighborhoods. And it does it with 70% less energy compared to the normal cultivation.

These urban start-ups are out and they are serious. Want to help them fly? Check their contact details on their presentations or contact them through Outi: outi.kuittinen(at)demos.fi.

Thanks Outi!

A Prize for Experientia and Low2No

Wed, 15 Jun 2011 05:34:00 -0700

Congratulations to our friends and colleagues at Experientia for winning Italy's National Prize for Innovation in Services!

Early user-energy interface developed for Low2No by Experientia and the Design Team

In Rome, the President of the Italian republic, Giorgio Napolitano, awarded Experientia for their work in the Low2No project as part of Italy's National Day of Innovation. The award cited Experientia's planning of "a residential area in Finland with low CO2 emissions, using innovative methodologies devised in Italy."

Experientia's President Michele Visciola receives the Italian National Prize for Innovation in Services from the President of the Italian Republic Giorgio Napolitano [Experientia]

See Experientia's press release and an interview with Senior Partner Mark Vanderbeeken. We are thrilled for Experientia and excited that Low2No has received international recognition for its innovative approach to improving the built environment. Our congratulations to Jan-Christoph, Mark, Irene and the Low2No team at Experientia!

Visit to Katri Vala district heating and cooling plant

Mon, 06 Jun 2011 13:42:00 -0700

Those embarking on major urban developments often conduct study tours in order to benchmark their plans against current best practice. As Low2No begins to pick up pace, we’re beginning to become a stop on such tours, even though there’s only a hole in the ground in terms of tangible progress at Jätkäsaari.

Katri Vala district heating and cooling plant, Helsinki [Dan Hill]

Last weekend, the Low2No team received visitors from a major urban planning project in Melbourne, Australia. I’d worked on that project’s initiation stage when at Arup, co-running one of the original design charrettes with Grimshaw Architects, who make up the project’s core designers with Field Operations out of New York. So it was great to see familiar faces at a very different latitude, and lead them through 24 hours worth of download about Low2No and the context of urban development in Helsinki.

Katri Vala district heating and cooling plant, Helsinki [Dan Hill]

The Australian-based team, led by the Victorian State Government, and in particular the State’s urban development arm, VicUrban, were particularly interested in our take on energy generation and consumption, including behaviour change and consumer attitudes, in terms of Low2No. As they’d just flown in from Stockholm that morning (previously having seen projects such as Bo01 in Malmö and Orestad in Copenhagen), I woke them up with a brisk walk around Töölönlahti, still beautiful despite the slate grey skies and northerly breeze. And later that afternoon, we hosted a summit at Sitra HQ, with Sitra project leaders Jukka Noponen and Marco Steinberg.

In between, however, we hosted a tour of Helsinki’s best-kept secrets— the vast, underground district heating and cooling system at Katri Vala Park in the Sörnäinen district.

Katri Vala district heating and cooling plant, Helsinki [Dan Hill]

Niko Wirgentius of Helsingin Energia was kind enough to give up his Saturday afternoon to show us around this extraordinary facility. There’s more information at the Helsingin Energia website, though it’s probably fair to see that this is something you have to experience in the flesh to understand the significance of this scale of investment.

Niko led our team through an unmarked door and down into the plant. It’s around 25 metres underground though there are numerous tunnels leading in and out that go a lot deeper. The equipment is of course enormous, contained within cave after cave blasted from the firm bedrock that Helsinki sits upon (which is what partly enables the city’s extensive network of subterranean infrastructure.) Equipment is manufactured all over Europe, with the country of origin represented by a flag stuck on the side. These plants are connected by energy tunnels and service corridors which run for tens of kilometres, sometimes via underground lakes, in all directions.
Wirgentius is quick to point out that it’s the world’s largest heat pump, but what the facility does is simple; it just does it at scale.

Katri Vala district heating and cooling plant, Helsinki [Dan Hill]

“A high volume of purified wastewater, the heat of which is utilised in district heat production, flows in the wastewater outfall tunnel 24 hours a day. In winter, heat energy is obtained with heat pumps from purified wastewater, which is led from the Viikinmäki central waste water treatment plant to the sea. In winter, the necessary district cooling energy is obtained direct from the sea with heat exchangers. In summer, heat energy is transmitted from the return water in district cooling, in which case the heat pumps produce both district heat and district cooling. If all of the heat produced in the summer season is not needed, the extra heat can be condensed into the sea.”

It’s a great example of a form of symbiosis, in which the waste from one system is the input into another, and the plant supplies around 40,000 residents in the district above with heating and cooling, most of whom are oblivious to the infrastructure beneath their buildings (the plant’s exact location is secret.)

The scale of investment is also impressive – the ability of the city to plan for the future by investing in such infrastructure impressed the Victorian team no end. But, as Wirgentius pointed out, the city is probably going to be around in 20 years, and will probably require some heating; it’s not a risky investment in that sense.

With Low2No, we’re currently exploring a mixed approach to energy generation, including photovoltaic for partial energy generation as well as geothermal, and with the bulk of heating and cooling requirements handled by a bio-heat product developed by Helsingin Energia. The Australian team were also interested in our approach to behaviour change and consumer behaviour, which has been developed by Arup and Experientia so far. More to follow on all that.

Katri Vala district heating and cooling plant, Helsinki [Dan Hill]

You don’t have to be an infrastructure geek to be impressed by Katri Vala — though those of us in the team who are had to be dragged away from exploring some of the deeper tunnels —but the aspects that the Victorian team were still talking about late into evening atop the Hotel Torni were the ability for a city to not only plan sustainable infrastructure requirements into the future, but to make and deliver upon the investment case too.

22. Week in Review

Sun, 05 Jun 2011 13:52:00 -0700

Some great video from Demos at Low2No camp in Berlin:

Nice work! We hope to have a guest post from the Demos folks once everyone has had some time to reflect.

Low2No Informatics Workbook

Also this week, it is time that I catch up on some overdue news. I am very happy to announce that Dan Hill of Arup and City of Sound fame (among others) has brought his family to Helsinki and joined our team! Dan was instrumental in framing and delivering Low2No’s informatics workstream on the design team side (see some of his Low2No Informatics Workbook below). We are lucky to now have him on the client side, although I am sure he feels a bit of whiplash. As he settles into his role at here at Sitra, look for him to uncover realization of the informatics workstream and Sitra’s organizational evolution into its new HQ through his future posts. In addition to being a tremendous ambassador for the project, he will be key in developing what’s next for Low2No. Welcome Dan!

Low2No Informatics Workbook

21. Week in Review

Fri, 27 May 2011 18:01:00 -0700

This week, a reminder of one of principal motivations for this project:

Ruoholahti Coal Delivery from Sitra- Finnish Innovation Fund

What you see is coal from Eastern Europe or Russia being offloaded into hoppers that carry the coal into one of the world's largest underground coal storage facilities. Ruoholahti used to be home to another "world's largest." See the 8 story coal pile that used to be stored above ground before the cavern was completed.

Jätkäsaari as seen from the south. In the white box is one of the city's largest combined heat and power plants and it's coal pile in the background

There are many issues raised by this footage: carbon emissions, climate change, energy security, wealth transfer, independence, etc. In some ways, it is unfortunate that Ruoholahti's coal pile has been pushed underground, out of public view.

Diagramming Landscape

Thu, 26 May 2011 16:42:00 -0700

Landscape design of the Low2No block is underway with Berlin-based Sinai and Sauerbruch Hutton.

Rather than show their early proposals, posted below are a series of diagrams that attempt to situate native elements of the Finnish landscape on our site. The process (layering images on sketches) is straightforward, but the results are not. Careful manipulation of the image scale opens possibilities for landscape to communicate intent as much as say, building integrated renewables. Landscape will help to position the project in the public's imagination; a piece of the city with distinctly Finnish DNA, but adapted to a new century where performance vies with aesthetics and geometry for top billing.

Low2No block landscape diagrams

16-20. Week in Review

Wed, 25 May 2011 17:01:00 -0700

It's been a busy four weeks:

The design team delivered the schematic design document set.
The client team pored over the drawings and Arup's very useful Basis of Design documents to find out just what the last year of work has lead to and where changes/clarifications need to be made.
Comment sets were issued to the design team by each client.

The design team has now taken the comments and begun the arduous task of incorporating them into the design to produce the final schematic design of the Low2No block. This level of design basically locks-in the overall design of the project (massing, structures, MEP, etc) and its performance targets. The project will soon shift into a mode more focused on implementation with upcoming goals including permitting and detailed costing.

Design of the "public bits" of the project has also been ramping up. Facades, landscaping, community areas and retail are all taking shape in very exciting ways! Check out some of the landscaping diagrams in the next post!

Low2No Camp on the ferry back to Helsinki [Demos Helsinki 2010]

In other news, our Energy Programme has initiated a project with Demos Helsinki and Experientia called Low2No Camp (their blog is here). The aim is to mobilize a group of city activists who are already carrying out actions which support low-carbon living, food, and services and attempt to develop groundbreaking projects in the spirit of Low2No. The project began mid May in Berlin at the DMY Berlin International Design Festival.

Low2No Camp in Berlin [Demos Helsinki 2010]

In order to kick-start the projects, a roundtable will be held in the coming months, gathering various stakeholders to whom the ideas will be presented with the hope of mobilizing local businesses to start developing opportunities for sustainable urban living.

Also, last week I participated in a panel discussion on integrating design into city planning at the New Finnish Design Scenarios event held in NYC and hosted by the Finnish Consulate. Together with Rick Bell (Executive Director AIA NY), Hannu Kähönen (CEO of Creadesign), David Resnik (Deputy Commissioner NYC DDC) and moderator Peter MacKeith (Associate Dean, School of Design and Visual Arts Washington University), we tried to tease out some similarities between NYC and Helsinki (of which there seem to be few!) and share our experiences working in the often difficult city planning machinery. One theme that received the most attention was the degree of control that cities exercise over their spatial evolution. NYC seems to rely more on the carrot than the stick, incentivizing developers and architects to pursue spatial, social and environmental goals by providing special conditions that are favorable to their bottom lines. The City of Helsinki, on the other hand, rigidly defines the "areas" in which an architect or developer can work, carefully circumscribing what is possible in the city. For a panel interested in introducing/preserving design in city planning, you can imagine which side we favored.

14-15. Week in Review

Tue, 19 Apr 2011 17:49:00 -0700

Low2No is developing greater detail on many fronts: from cost estimates and coordination studies to synergistic mechanical systems and sky lights in the sauna. The volume of work is growing exponentially putting pressure both on our ability to apprehend the state of the project as well as the efficacy of our archiving systems (our Basecamp site is ballooning!).

As we close on summer, many of our outstanding design decisions should be made, allowing me to share publicly more project images and information. Check back!

Project output is piling up!

12-13. Week in Review

Tue, 05 Apr 2011 18:05:00 -0700

Design continues in Helsinki. We have been working to coordinate building components such as air handling equipment and photo voltaic panels on the buildings' roofs, fresh air intakes and facade build-ups, etc. Energy modelling is becoming more refined for the apartments and Sitra's offices. It seems likely that we will be able to achieve our progressive energy targets. Simultaneously, Arup has begun a cost effectiveness analysis of our energy strategy that under-girds our energy targets. Taken together, the strategy and costing will provide a valuable reference for future projects in Helsinki that will be looking to blow past regulations and current industry practices.

Eat&Joy © Dan Hill

Sauerbruch Hutton is turning a bit of its attention to design of the retail spaces. Our retailers/service providers needs are being collected and coordinated by Eeropekka Rislakki, one of Eat&Joy's founders. One of our designers' challenges will be to translate the retailer's specs into spaces that are specific, yet adaptable for future alternative needs. Of all of the Low2No block's potential benefits, the vibrancy it will add to the Jatkasaari neighborhood will likely be the most evident and talked about by Helsinki's residents. It is our hope that this will make clear that carbon mitigation is yes, an abstract, difficult goal, but in realizing it, we can enjoy a better more delicious life.

Eat&Joy © Dan Hill

Week 13 also marked the first full push toward a new low2no.org! We have contracted with local firm Muotohiomo to provide graphics and user experience and Austin, Texas based XOXCO building the site and reusing some of the backend they originally developed for helsinkidesignlab.org. Exciting!

11. Week in Review

Fri, 25 Mar 2011 21:55:00 -0700

Week 11 marked the beginning of our co-location scheme described last week. While I was not there, this method seems to already be bearing fruit. The design of the block is beginning to "click" according to Marco, and the disparate needs of the client partners are being translated into the project in a more robust and rapid way. Good news for everyone as we are closing in on our June detail design deadline.

One challenge has been Finland's still somewhat mysterious floor area measurement unit: the "kem." Kem boils down to a way of calculating a development's square meters minus a deduction for mechanical systems and a standard dimensional deduction for insulation/wall cavity. As an unusual Finnish construct, this has caused some confusion among the design team, but through an aggressive auditing regime, we all seem to now share an understanding of exactly what "22,000 kem of allowable development area" means and that the Low2No block will meet this allowance.

Sketch of the block plan and detail of interior "deck" over the basement

Detail design is a flicker between scales. The designer is at once designing at the scale of a city block and the detailed scale of material connections at key interfaces. The simultaneous flood of sketches and plans on our project's Basecamp site is testament to this exciting phase that separates architectural design from so many other disciplines. Here we are endeavoring to transform abstract ideas into concrete, purpose-built things.

07-10. Week in Review

Wed, 16 Mar 2011 21:58:00 -0700

basecamp is blowing up

The last three weeks have had a pace that is at times blistering and occasionally seemingly at a stand still. This is, I think a product of this phase of the project where teams are working out specific issues in focused, small teams. Arup has been tackling structural and ventilation issues while Sauerbruch Hutton has been finalizing detail design of the apartments, service areas and Sitra's new HQ. Experientia continues to push forward our demand management systems and low carbon retail and service offerings.

Communication between teams (both client and design) continues to be a challenge. This is partially due to the technical nature of the work at this stage as well as the diaspora that is the project team, but there are many other factors as well. To improve communication and mitigate the impact of miscommunication, we have initiated a co-location scheme where representatives from each firm will work together in Helsinki 2-3 days each week. This is bad news for our carbon footprint, but good news for our aggressive project schedule and ambitious scope. The days in Helsinki will mostly be spent in focused working sessions, but each week will conclude with an all-team meeting chaired by Marco, with an exciting output for those of us working abroad: meeting minutes! It seems likely that we will realize progress on the project's most complicated challenges much more quickly and effectively over the coming weeks. Hopefully I will be able to post more fresh content from the project to this blog as well.

Marco, using our geotechnical report to point out the block's position over one of the original granite islands of Jätkäsaari

As I mentioned a few weeks ago, work has commenced on site. And the results are in! Well, geotechnical results anyway. But exciting nonetheless. Our assumptions about our site's location over one of Jätkäsaari's original granite islands were correct. This will translate into a smaller foundation (read lower embodied carbon) and an interesting condition for our geothermal pre-heating/cooling system. But more on that later.

Also, exciting news! Low2No.org will be refreshed soon. Finally we will be moving on from the site's current competition focus to one that covers not only the city block in Jätkäsaari, but also the continued development of Low2No as an idea about how to transition our cities to a low carbon future. We hope to have more rich content streams, both visual and textual, as well as guest authors writing on related issues. Stay tuned.

A little local press (in English)

Fri, 04 Mar 2011 22:07:00 -0800

We are Helsinki (the city's free culture magazine) published this interesting take on the Low2No project. Take a look!

Screen shot from Low2No's writeup in We Are Helsinki

Project update coming soon, I promise.

Interim sketch of the block's interior

06. Week in Review

Tue, 15 Feb 2011 22:15:00 -0800

Other than the Low2No conference covered in the previous post, this week's big news: work is commencing on site! A detailed geotechnical evaluation was conducted to determine just where our site sits above one of Jätkäsaari's original 3 islands, and to what degree we will need to contend with fill or steeply sloping rock when it comes time to building our foundations or drilling geothermal bore holes.

Jätkäsaari is starting to grow: note the rubble piles that will become part of the harbor's massive regrading project

Sitra, SRV and VVO together with an outsized legal team began the painful legal wrangling that will determine exactly how the shared infrastructure of the block will be managed. In this case, we are extending "infrastructure" to include soft things like the retail and services that will be a part of every building on the block, as well as more traditional forms of infrastructure such as the parking level. In this case we will also be adding photovoltaic and geothermal systems to the infrastructure list.

As it is not within the normal business purview of any one client partner, these critical components that enable us to create a truly mixed-use block that leverage synergies between elements to productive effect, such as reducing per capita carbon emissions and improving enery efficiency, will need to be carefully developed and safeguarded. First and foremost, a legal framework has to be developed that sets the conditions of ownership and partnership, especially among the retailers. Risk must be handled in a way that makes each client partner comfortable in investing in the block's non-standard components. And tax issues and future liabilities must be imagined and addressed. This is no small task. But if done right, it could be one of the most transferrable products of the Low2No project thus far.

Carbon mitigation via investments in renewables organized at the district scale.

This week we also broke ground a short study that will hopefully shed some light on the potential for financial mechanisms as a carbon mitigation tools working at the district scale. One of the many compelling ideas in the Low2No competition was turning Jätkäsaari into a carbon neutral district by creating a revolving fund that would invest in renewable, carbon-free electricity generation. The idea was strong, but Jätkäsaari's long development time frame made it quite difficult to implement as residents and business will be trickling in over the next 15 years. So, together with GreenStream Network here in Helsinki, Sami Tuhkanen from Energy and I will do a quick survey of what's happening now in Finland in this space and provide a set of recommendations for future initiatives.

A New Direction for Transport Planning

Tue, 13 Sep 2011 22:23:54 -0700

Realities of Today

The Car and the City

The impact of private vehicles on the urban fabric is undoubtedly a well-known issue. The space that through the years has been dedicated to the car has often modeled the new form of growing settlements or profoundly affected historic city centres.

During the first years since the appearance of the car, the social innovations introduced by Henry Ford—minimum wage, shorter working hours and affordable cars—made it possible for thousands of workers to become car owners and commuters.

Considering the generally poor living conditions of the overcrowded cities at the beginning of the century, especially in the United States and in the UK, the car offered the simplest—in that it is individual—solution towards moving away from these congested environments of bad housing[1]. Hence the subsequent generation of the low density suburbs.

A Typical Example of Knowledge Silos—Traffic Engineering

Due to the incredibly steep growth of vehicle ownership early in the last century in the States and after the war in Europe, a car-centered urban vision grew and strengthened, flourishing in the 60s with the Modernist vision. Roads and buildings weren't meant to communicate anymore, their relationship was broken and so was any inter-disciplinary approach to urban planning. What Marshall describes as the schism of Modernism[2], produced the consequent schism of professions.

Fig. 1a, b "The Scism of Modernism" (Marshall, 2005)

The identification of a "traffic flow" as a discipline led to the birth of a very specific professional figure to whom the study and design of the "movement channel" was entirely assigned: the traffic engineer.

The hyper-specialisation of this professional figure, together with an inward looking approach based on quantitative issues alone, generated detrimental urban interventions that are now dotted throughout cities around the world[3].

Traffic engineering is possibly the clearest example of a "knowledge silo": the simplification of vehicular movement into mathematical simulations (often generating spectacular failures) and the inability to establish a dialogue with other disciplines has proven to be a major issue when facing complex problems typical of the contemporary world.

The growing importance of sustainability issues has brought up a set of problems of unprecedented complexity and interdependency (on this topic see this HDL link).

A Car-centred Approach

The approach that has characterised transport engineering since the 60s in Europe, as in the rest of the western world, has been centered on giving maximum capacity to the road network, in order to respond to the continuous growth of traffic. More and more urban space has been given to the automobile.

Moreover, because the car is a land-hungry transport system as well as being energy intensive and an emitter of pollutants, the "Faustian bargain" evoked by John Whitelegg[4]—the willingness to give away urban quality in order to ensure as much vehicular movement as possible—is evident in most cities worldwide. Some western cities have witnessed the expansion of space dedicated to the car on the road network until very recently, as well as the construction of major urban motorways in dense city centers. The space given to the automobile in the new suburbs has generated diffuse urban patterns with a major role played by car movement and parking.

Without lingering on the issue of whether the car has determined the demise of urban public life or on the contrary the car has given a technological answer to desires already embedded within society[5], it appears clear that the overall result of the car-centred approach has proven disastrous to urban quality.

Towards Reducing Infrastructure

Peak Traffic in the Western World

Since the first Ford Model T, traffic and car ownership (and more precisely the mileage travelled by car) have constantly been growing in the western cities and are now expected to grow very steeply in the emerging countries, where the car industry is focusing most of its sales in the upcoming years.

Nevertheless, we are recently witnessing (or becoming aware of, since some first signals had already emerged in the 90s[6]) a decrement in car usage. It has been shown[7] that vehicle miles travelled (VMT) have finally peaked in the western world and the inversion of this trend is related to a complex combination of causes. The worldwide economic crisis with the associated rise in fuel prices is the unifying element underlying technological and social factors: limited travel time budget, diffusion of transit-centred policies and a re-urbanization bias both for young and older people who are less and less attracted by the car[8].

Fig. 2 from left: U.S. VMT per capita, annualized and Real Gasoline Pump Prices, Jan 1991 - Sep 2008 (Puentes and Tomer, 2009)

Fig. 3 Estimated car passenger km per capita (FY1990-2008) (Newman and Kenworthy, 2011)

Fig. 4 Car use growth trends in developed cities from '60 to '05 using Global Cities Database (European cities included in the study are: Amsterdam, Brussels, Copenhagen, Frankfurt, Hamburg, London, Munich, Paris, Stockholm). (Newman and Kenworthy, 2011)

The Real-time Revolution

Changes in social habits that directly or indirectly influence car usage are already taking place.

The development of ICT as a general trend within our society now allows thinking of integrated management systems, where mobility-related data is collected in real time and analyzed in order to improve service efficiency (see IBM Smarter City site).

Examples could apply to the management of a public transport network, of a multimodal mobility network, of a car park management system at the city scale or the real-time update of a dynamic pricing policy.

The great potential of information technology as an instrument of optimisation is mostly due to the fact that the improvements are both to the managements' and the users' benefit.

Systems that are currently becoming more and more popular—especially among young generations—such us car sharing or bike sharing are supported by and based on this kind of technology. In the framework of the re-urbanisation that has been registered as one of the causes of the peak car phenomenon, these sharing habits can also be read as a progressive separation from the idea of the car as a symbol to posses, returning it to the realm of the instrument to be used.

New Policies for the Car in the City

As cars become tools to use and share rather than objects to desire and possess, it appears clear that a new awareness is emerging when it comes to understanding the impact of the automobile on the city fabric.

In this sense, traffic containment policies such as congestion charges or high hourly rates for car parks in city centres are becoming—in the western world—increasingly accepted by the population, which is therefore starting to internalise the externalities of the car that have traditionally not been associated with a cost.

The introduction of congestion charges, starting from Singapore some 25 years ago and following with Oslo in 1990 and London in 2003, has been shown to be a feasible route; the shift towards a different way of thinking about the presence of the car in the city has proved to be evident even in traditionally car-dominated environment, as shown in a recent referendum on the city in Milan[9].

A New Set of Tools

As new policies are being envisaged a progressive shift is happening in the realm of transport planning. One key element is the growing criticism of one of the pillars of the sector: the "predict and provide" methodology.

From back in the late 50s and up to the early 90s, transport planning was about forecasting traffic growth—the demand—and then building a road infrastructure wide enough to accommodate it.

This approach has proved to be—and is now widely recognized[10] as—an unsuccessful strategy, causing a faster saturation of the new road, due to the temporary reduction in the level of congestion and consequent attraction of new users. This phenomenon has been largely investigated under the name of "induced traffic"[11].

During the 90s planning moved from providing for what was predicted, to preventing the prediction from becoming true[12].

The recognition of the fallacies of simply adding road infrastructure as the way out of congestion has determined a major slowdown in new road construction in certain parts of the western world.

In the same logic, there has been increasing criticism of what used to be the pillars of transport planning such as the level of service (LOS) approach[13].

The necessity for a holistic understanding of the relation between flows and space is again becoming a priority in the planning field.

A New Way of Doing Things—Towards Reducing Infrastructure

Looking at the road network from this perspective might open up different ways of thinking in long-term planning—do we really need all the major infrastructures that are still planned in cities throughout the world? Or it is maybe now time to stop the construction of new roads and conversely to start eating away at existing infrastructure?

The issue of peak traffic, new policies and real time data processing, as well as the progressive shift in the transport planning field discussed above, are setting the basis for a possible revision of the way we plan cities and road infrastructures, which in the past focused on making them grow constantly, following (and at the same time stimulating[14]) the rise of car usage.

We are at a change of the tide: in the last decade (and up until very recently) cities have been experiencing a continuous growth in traffic, while it seems now that the use we make of cars has peaked. Therefore we might imagine a different future, a future in which we will progressively readjust and/or remove existing road infrastructure.

A new road network might emerge onto which a low-impact public transport network could be superimposed, along with mobility-on-demand systems to cover the last mile problem[15].

It is therefore possible to start shaping the image of a new city, an image different from what we have built and experienced in the last decades.

From Theory to Practice: a New City Looking to the Future

The planning concepts that have been introduced thus far find a practical application in a cutting-edge project in Saudi Arabia: a sustainable city with 180,000 residents based on renewable energy supplies and focused on a future of sustainable mobility. With Foster + Partners leading the group as the master planner, in this project our know-how summed up with that of many other players, creating a multi-disciplinary team that covered several areas of expertise.

Fig. 5 View of the masterplan (courtesy of Foster+Partners)

Fig. 6 Internal view (courtesy of Foster+Partners)

The masterplan is located in proximity of the capital of Saudi Arabia, on a major motorway which links the project area to Riyadh and other parts of the Kingdom. It is spread across a 63 km2 site, the western part of which is basically a flat zone bordered on the south by the expressway and geographically constrained on the eastern side by the 200 m cliffs of the main site's wady ground morphology.

The aim of the project is to provide a vision for a new city: a dense and compact settlement with a strong focus on mixed land use in order to allow public transport to succeed and generate a livable and people-centered pedestrian environment. A new eco-city characterized by low traffic volumes on one hand, and on the other a contemporary city where the mobility solutions have to relate to a highly demanding society. Residents and visitors are provided with personalized and responsive transport through a sustainable choice among different modes and a blurring of private and public mobility.

This goal is achieved by offering a consistent set of strategies for the road network, car parking and public transport planning, moving away from car-centered mobility towards more sustainable modes of travel.

The proposed solution is not to remove the car from the urban scenario, but instead to include it in a balanced scheme that controls vehicular movement in order to provide a people-friendly environment.

Road Network

As part of both an active strategy towards the limitation of car usage and a support to the overall multi-modal mobility plan, the city is connected through a network of one-way roads, which host cars and local buses.

The road network is designed to create a rich and vivid environment by keeping the road sections to the absolute minimum. By providing shade from the sun, this approach generates a pedestrian-centered and livable environment.

Fig. 7a,b and c Equivalent urban space occupancy for different modes of transport (Cairo, Riyadh, Comparison Schematic)

While in existing cities there is bigger potential in the retrofitting of the road network for more sustainable modes of transport, planning the network from the start allows the compression of the space dedicated to infrastructure as a base line of the project, to public transport's and pedestrians' benefit.

Similarly, not providing a bypass or ring road to the city was a choice driven not only by the ground's morphological characteristics, but also predominantly by the will to prevent induced traffic as a consequence of the presence of a car-convenient infrastructure.

All private vehicle movement within the city will be monitored thanks to a GPS control system that will allow the dynamic understanding of the distribution and density of vehicles throughout the day, constantly informing drivers regarding trip lengths and possible delays on the network.

Variable message panels and the centralized traffic light system—based on real-time information—will redirect vehicle flows when necessary.

Parking Strategy

The parking strategy is another fundamental planning instrument related to the overall mobility scenario.

The masterplan is conceived as a zero-emission environment. Therefore the only cars allowed to enter the city limits are zero-emission vehicles (ZEVs): electric taxis, residents and visitors' e-vehicles or the car sharing system's fleet.

Those driving a fossil fuel car or even a low-emission vehicle (LEV) park it at the interchange car park located on the level west side of the site and connect to the internal public transport system.

Fig. 8a, b and c Residential and visitors car park layout

Within the city limits, small parking structures are evenly distributed across the city fabric, one every 150m, providing public parking spaces for the residents. One every two parking structures hosts some public parking for visitors; very limited car parking is planned at destinations such as retail outlets or offices, thereby discouraging the use of private vehicles.

As a result, a150m buffer from the parking facilities is maintained for the residents and a wider 300m buffer for the other functions and users.

The parking infrastructure has basically been unbundled[16] from the land use functions, removing the concept of dedicated car park and spreading it across the urban fabric.

Another aspect of the proposed parking system begins from the concept of pricing strategy that in recent years has started to be fully understood in its potential for managing traffic flows, and pushes it further.

A dynamic pricing strategy would force users to internalize the externalities related to car usage, making the car trip still possible but less appealing.

Depending on the chosen trip timeframe and on the distance between origin and destination, the e-park management system will propose a parking fee to the user.

This pricing will be variable and, for instance, will be higher for peak hour or very short trips and proportional to the traffic volumes registered on that specific part of the network. As a consequence the system itself could divert the user's trip destination, offering a more distant car park location to prevent the desired area from becoming too congested.

The parking strategy therefore aims to define a demand-responsive management system that constantly ensures a better match between demand and supply.

Public Transport

The project represents a best-case example of a transit-oriented city where an efficient and therefore attractive public transport system, which has the competitive advantage over the private car, is the main planning guideline.

As an adaptive city[17], there is a strong relationship between its urban shape and characteristics, and the public transport system. The city presents a linear form that hosts the spinal light rail transit (LRT) system, where the areas in proximity of the transit stops are characterised by higher densities.

The LRT provides a fast connection through the development, integrated with a series of local bus lines which guarantee the distribution throughout the urban fabric. The line runs on a dedicated path that designates the city's main connector, flanked by pedestrian routes to guarantee pedestrian connectivity. Moreover, motor vehicles are not allowed to circulate on the main spine and the exclusive use of the dedicated lanes by public transport enhances the system's efficiency.

A transit oriented development (TOD) is defined as an area located within a limited buffer from a public transport stop, therefore constituting a transit line linking a series of discrete areas. For the project's public transport network, the buffer radius of the LRT stops has been conceptually expanded to a distance that can be covered by feeder routes bringing users to the main line. The result of this shift is that the stop buffers overlap, creating a continuous area rather than discrete points along a link. In this definition, the transit corridor is no longer linear but effectively becomes a network.

Fig. 9a, b Evolution of the transit corridor: from discrete to continuous configuration

The expansion of the area of analysis yields a synergic system where feeders provide ridership and reinforce the role of the TOD as a hub, thereby placing emphasis on pedestrians and interchange.

The second level local transport system is formed by as a series of mostly one-way bus routes looping between two or three LRT stations, where transport interchange is available. Similarly to what Paul Mees[18] analyses of the TTC's[19] system, aside from linking with the spinal system, the bus routes link to each other to cater for cross-urban travel and easy transfer becomes the key to achieve the maximum flexibility for public transit trips. The bus route length guarantees a maximum travel time of 10 minutes and a system average headway of 4minutes.

The transfer-based system, along with the integrated network's high frequencies, guarantees the efficient coverage of the whole masterplan area.

Fig. 10a, b LRT and bus isochrone analysis

Fig. 11a, b Private and public transit isochrone analysis

Increasing public transport stop buffers leads to the inclusion of another key element to the transit scenario: soft mobility or non-motorized transport (NMT)[20]. The public transit stop becomes a point of interchange between one mode of transport and the next, where, as described by Paul Mees, "every transit user is also a pedestrian"[21]. As stated above, this points to the need to consider the microenvironment within the study area to create pedestrian and bicycle-friendly environments. The improvement of the urban context through which soft mobility moves becomes a key part of the conception of a livable transit corridor.

Fig. 12 Masterplan's overall public transport network

The presence of this urban quality in the project, along with an integrated management system, allows the planning of a mobility on demand system within the overall transport framework, offering a third level of service that further enhances the system's flexibility. In this project, mobility on demand not only provides a solution to the well-known last mile problem[22], but also offers a true alternative and self-standing mode of transport that is integrated with the rest of the public transport network.

Mobility Management System

The parking dynamic pricing strategy, the dynamic signaling at the road network's junctions, the public transport and MoD real-time management system, all fall under the key element of the sustainable mobility plan: an integrated mobility management system that can coordinate and optimize both the multi-modal public network and the city's private mobility.

Allowing a constant exchange of information between the provider and the users will create a synergy between network and demand, defining the systems' adaptivity and its demand-responsive characteristic.

The mobility management system will allow the dynamic resolution of issues related to insufficient parking availability as well as possible congested areas, always ensuring efficient movement of private and public transport.

It will also guarantee the management of energy stored in the vehicles' batteries; the consistent storage capacity provided by the vehicle fleet will be used to address peak demand by feeding energy back into the grid (when allowed by the vehicle owner).

Fig. 13 Mobility Management system

Footnotes:

[1] Mees, P. (2010) Transport for Suburbia: beyond the automobile age, Earthscan, London

[2] Marshall, S. (2005) Streets & Patterns, Spon Press, London and New York

[3] the concepts of 'urban destruction - the impact of highway engineers in urban areas [as] physical intrusion, [...] , demolition' and of 'disurban creation - the negative effects of highway engineers as a formative influence on urban layout' (Marshall, 2005)

[4] Whitelegg, J. (1997) Critical Mass: Transport Environment and Society in the Twenty-first Century, Pluto Press, London

[5] Secchi, B. (2007) Prima Lezione di Urbanistica, Laterza, Bari

[6] Goodwin, P. (2010) Peak Car: Evidence Indicates that Private Car Use may have Peaked and be on the decline, Local Transport Today

[7] Puentes, R. and Tomer, A. (2009) The Road...Less Traveled: An Analysis of Vehicle Miles Traveled Trends in the U.S, Metropolitan Policy Program at Brookings, Washington D.C.

Newman, P. and Kenworthy J. (2011) 'Peak Car Use': Understanding the Demise of Automobile Dependence, World Transport Policy and Practice, Vol. 17

[8] (Newman, P. and Kenworthy J., 2011)

[9] On June 12th and 13th 2011 a local public vote was held in the city of Milan, along with a series referendumsof national interest. The first question was related to the citizens' willingness of having the city council introduce a new mobility plan, that among other interventions, expands the existing congestion charge to a wider city area and to all kinds of vehicles. 79,12% of citizens voted YES.

[10] Starting in the 1988 with the New Deal for trunk Roads in England and expanding the concept with the 1994 SCTRA report, the UK Government publicly registered the defeat of the "predict and provide" approach.

[11] Noland, R.B. and Lem, L.L. (2000) Induced Travel: a Review of Recent Literature and the Implications for Transportation and Environmental Policy, European Transport Conference 2000

Noland, R.B. (2007) Transport Planning and Environmental Assessment: Implications of Induced Travel Effects, International Journal of Sustainable Transportation

[12] Owens, S. (1995) From "Predict and Provide" to "Predict and Prevent": Pricing and Planning in Transport Policy, Transport Policy, Vol.2, n°1, pp 43-49

[13] The San Francisco County Transportation Authority has recently published a report proposing a new impact measure and mitigation program that is more coherent with the local transit/soft mobility-oriented city policies, and is based on the number of automobile trips generated (ATG) by a project. Automobile Trips Generated: CEQA Impact Measure & Mitigation Program, SFCTA 2008

[14] Noland, R.B. and Lem, L.L. (2000) Induced Travel: a Review of Recent Literature and the Implications for Transportation and Environmental Policy, European Transport Conference 2000

[15] The last mile problem is related to the public transport stops' catchment area. Indeed, because of its nature the public transport network doesn't cover the door to door movement, leaving the last (and first) mile of the trip generally not served by the system.

[16] Shoup, D. (2005) The High cost of Free Parking, APA, Chicago

[17] Cervero, R. (1998) The Transit Metropolis: A Global Inquiry, Island Press, Washington D.C.

[18] Mees, P. (2010) Transport for Suburbia: beyond the automobile age, Earthscan, London

[19] Toronto Transit Commission

[20] Newman, P., Beatley, T. and Boyer, H. (2009) Resilient Cities: Responding to Peak Oil and Climate Change, Island Press, Washington D.C.

[21] Mees, P. (2010) Transport for Suburbia: beyond the automobile age, Earthscan, London

[22] See Ch. II, note 10

Making Sustainable Cities Investable

Tue, 13 Sep 2011 20:59:07 -0700

In this short essay, I offer a broad overview of some key issues that come up when thinking about the role of private investment in (re)developing sustainable cities. I concentrate on understanding why investors might look to sustainable cities as an important investment arena.

But I would like to do this within a frame of thinking about how sustainable cities themselves become investable for private capital. This means integrating the project level -- what sorts of buildings, infrastructure, retrofitting, or energy production projects are sustainable -- with a larger vision of cities (broadly understood not merely as political jurisdictions, but as metropolitan regions) as vibrant organisms that need to be thought of holistically for sustainable investment to achieve its potential. Private investors cannot do this alone -- for sustainable cities to become investable, close cross-sector coordination among regional, national, and international governments, the private sector, and civil society groups will be necessary.

I take investment in sustainable cities to be a subset of responsible investment -- that is, investment that integrates environmental and social factors into investment decision-making, and support long-term sustainable economic activity that serves the interests of society as a whole.[1] As I hope to make clear, I believe that sustainable cities are a promising new focus for responsible investment, and a theme that sheds like on the role that finance can play in serving the interest of society as a whole.

Sustainable Cities

Cities have been for some time a vital focus of efforts to address anthropogenic global warming through sustainable investment. For instance, a recent report by the United Nations Finance Initiative Environment Programme (UNEP FI) on "Cities" offers a convenient highlighting of the key reasons that advocates cite for focusing on urban areas.[2] Cities account for outsized resource consumption -- they are home to 50% of the world's population but account for 75% of the world's carbon emissions and 60-80% of the world's energy consumption.

Rapid urbanization in the world's developing economies is a leading social and environmental macrotrend which raises the importance of developing sustainable urban forms amid substantial disparities in wealth and access to opportunity. Already, urban environments across the world both direct and constrain our capacity to respond to issues of resource consumption, carbon emissions, and, more expansively, sustainable human and economic development.

At the same time, cities offer enormous opportunity. The concentration of economic, social, and intellectual activity in close quarters makes cities sources of innovation and diffusion of sustainable practices.[3] There are positive externalities associated with urban economic activity. Well-designed, dense, compact, and connected urban form is tied to more sustainable living patterns. And by virtue of their concentration of people and activity, cities offer scale, the ability to support sustainable investments of the magnitude to make a difference in the face of the immense challenge posed by climate change.

So what are sustainable cities? For the purposes of this note I will focus primarily on carbon mitigation, the topic that has received the most attention to date in terms of investment, though there are other resource issues around water or ecosystem preservation, for instance, or resiliency and adaptation issues related to likely changes in climate, that are equally as important.

A variety of approaches to the problem take into account both the need to find new ways to build new cities that serve growing urban populations, and the imperative of revitzing existing cities of all sizes by making buildings more energy efficient, energy sources clean and renewable, and urban design more friendly to carbon mitigating lifestyles and work patterns. Though there is no clear working definition of a "sustainable city" as of yet, we can set as a rough benchmark something like an urban area that mitigates climate-related emissions significantly enough to meet consensus estimates for what is needed to mitigate climate change. In other words, sustainable cities must meet their share of responsibility in global targets for emission reduction set out by organizations such as the Intergovernmental Panel on Climate Change.[4]

An impressive and growing literature on sustainable cities has focused on the need for new commitments to sustainable urban planning, investment, civic engagement, and national and international coordination in support of sustainable cities. International groups like the C40 Climate Leaders Group -- supported by the Clinton Climate Initiative, or ICLEI -- Local Governments for Sustainability, bring together municipal leaders with public, private, and non-profit organizations to highlight and share best practices and toolkits. Climate change networks that engage the private sector -- groups like Ceres and its Investor Network on Climate Risk; or the Climate Group -- have similarly worked on specifically urban issues in relation their broad goals of guiding private sector activity towards more sustainable practices.

The role of private investment in sustainable cities has received specific attention, with advocates from all sectors searching for ways to mobilize private capital towards more efficient, resilient, and productive cities[5]. Discussions often center on how to engage private investors, what products they might use to invest in sustainable cities, and what public policies will most successfully catalyze private investment.

Sustainable Cities are an Opportunity for Private Investors

Investing in sustainable cities is more a topic of discussion than an investment discipline as of yet. Investors might look for sustainable projects such as wind energy production, or green building development, or transit lines and smart growth real estate – but these are not necessarily linked to cities themselves.

But there are a number of reasons to think that investors might take up sustainable cities themselves as a topic. I will focus here on the growth of two types of investors who may come to play an important part in this movement – to simplify, I'll call them Responsible Investors and Impact Investors, though in reality there is substantial overlap in who they are.

The archetypal Responsible Investor is a large institutional investor – say a pension or sovereign wealth fund – with theoretically long term time horizons and a class of beneficiaries (pensioners, or citizens) who would reap gains from increases in the public good as well as financial returns to the fund.[6] Sustainability has become an important theme for these investors, on the belief that over the long term investments with superior environmental (and social) benefits will potentially outperform, by reducing risks from political, cultural, and economic change, and capturing the benefits of forward-looking economic devleopment.[7] They may have signed onto the UN Principles of Responsible Investment, whose preamble notes that "these Principles may better align investors with broader objectives of society." Many need to invest very large sums of money.[8]

Responsible Investors face the challenge of balancing their portfolios in the face of environmental and social macrotrends, from the growth of emerging markets, to global resource depletion, to rising disparities in wealth, to global trends towards urbanization. The issue that has received perhaps the most attention in recent years is climate change, with, for instance, a recent report from Mercer Investment Consulting arguing that investors must significantly shift their portfolios and asset allocation strategies to take into account the risks and opportunities associated with climate change mitigation and adaptation.[9]

From this perspective, investment sustainable cities offer a number of advantages:

Scale: Cities offer the potential for large scale investments in sustainable infrastructure and real estate, creating opportunities for market development.
Long term time horizons: These investments can mature over long periods, supporting the time horizon of the funds themselves.
Positive externalities: Funds, and their beneficiaries, can benefit from sustainable investment strategies that support economic development and encourage market development for the transition to a low-carbon economy.
Risk mitigation: Sustainable cities may help funds protect themselves against the downside risks of climate change disrupting economic activity.

Each of these factors, at the level of the city, enhance the benefits of any particular sustainable project in which a fund might be invested. Cities with comprehensive sustainability strategies ought, in this view, be more compelling investment opportunities.[10]

Sustainable City investment ecosystem

Impact Investors focus on investments that make financial sense, and have intended, specified, tangible social and/or environmental benefits. They are often associated with innovative investments meant to catalyze other private and public sector capital, or with taking risks and accepting reduced returns in exchange with outsized social impact--for instance by creating investment vehicles that serve low income areas or that support innovative energy efficiency investments. They may join organizations such as the Global Impact Investing Network, which focus on regions and sectors of interest to multiple investors.[11]

The archetypal Impact Investor is a foundation or high-net worth individual focused on creating social impact through market tools. For these investors, sustainable cities offer:

Innovation: The innovation associated with dense urban living, and the ability to grow to scale relatively quickly, allows Impact Investors to support catalytic opportunities.
Leverage: Sustainable Cities offer potentially scalable models that can be applied elsewhere, creating leverage for the social benefits of impact investments.
High impact targets: Impact Investors have the potential to provide below market capital to low-income areas, or to support mixed-income development, that ensures that sustainable cities serve whole populations, and do not merely externalize environmental costs onto underserved areas. In addition, investors particularly concerned about specific localities have the opportunity to address a variety of issues all connected to the sustainability of a particular place of high interest to them.
Sustainable investment ecosystems: Impact investment can involve complex deals and risk taking on innovation that require the support of public, private and civil society ecosystem in order to succeed. Sustainable cities, understood holistically, would be laboratories for developing investment ecosystems that deploy private capital more effectively to public purpose.

As for Responsible Investors, the idea of a sustainable city – a metropolitan region whose design and culture favor sustainable energy use and living patterns – increases the benefits for Impact Investors of each of these factors, by capturing the benefits of individual investments and creating mutually beneficial and reinforcing deployments of capital.

Vehicles for Investment

Responsible Investment and Impact Investment have both received substantial attention and growth in recent years, catalyzing products for all sorts of investors that have carbon mitigation, urban resiliency, or sustainable land management built into their business rationale.

For instance, the World Bank, the IFC, the European Investment Bank, and others have developed a class of "green bonds" meant to appeal to institutional and retail investors who look for relatively straightforward investment products that serve these sustainability goals. These bonds help finance, among other things, urban infrastructure projects tied to carbon mitigation efforts. The Climate Bonds group is working on standards to ensure that green bonds fulfill their environmental promise, and in the process provide readily accessible products for investors and bond issuers alike. [12]

Other examples include real estate funds that target transit-oriented development or energy efficient buildings. Efforts have been made by large real estate fund managers to green their existing building portfolios. Green building guidelines such as the LEED program of the US Green Building Council, the BREEAM ratings in Britain, or Green Star in Australia have all helped set standards for energy efficient buildings. Specialized funds have developed to help green affordable and workforce housing units, or to revitalize brownfield sites in cities and reduce sprawl, or to build or refurbish mixed-use, mixed-income buildings in proximity to transit.

Finally, venture capital and fixed income funds have supported innovative small business development around environmentally sustainable goods and services.

These various products are designed to appeal to different sorts of investors. Responsible Investors are looking for products which fit into their portfolios, and can be benchmarked for financial return against peer groups with less social impact. These investors face the challenge of finding investable products that aggregate enough deals to absorb institutional scale capital. They often depend on third parties -- public or civil society -- to work with them on designing investable deals, either through community engagement or financial support of one sort or another. Successful products have typically come in the form of conventional investment products, with support from collateral organizations ensuring the delivery of public benefit. For Impact Investors, the need is for a robust infrastructure that can source deals in hard to work places, or provide capital to mitigate risk or enter new spaces for investment. Across the range of investments, urban areas and sustainability have been a focus.

But the products themselves rarely are designed to support sustainable cities, understood holistically. Instead, they focus on projects, deal aggregation, and fund development that contribute to sustainable goals within an urban setting. How can we take this interest in sustainable investment products, and turn it into support for sustainable cities themselves?

Making Sustainable Cities Investable

For private investment to fully participate in making cities sustainable, investment products, public policies, and civic support need to be created around efforts that combine an interest in sustainability, the importance of cities, and the multiple potential sources of capital. This will be most effective where the models of urban places and metropolitan regions are developed that link investment to broader sustainability goals. Otherwise, the benefits of sustainable projects -- one-off sustainable investments -- cannot capitalize on the long-term benefits and innovative potential of truly sustainable communities.

To make a city investable, then, it requires the coordination of projects, funds, investors, policy makers, and civil society organizations, around a common goal against which specific types of investments can be measured. Investors differ in their needs and capacity, and so multiple forms of private capital will be necessary to support sustainable cities. Just as importantly, a framework that coordinates these sources of capital, helps build pipeline opportunities, and creates mechanisms to hold investors accountable for superior social and environmental performance, is fundamental to creating a sustainable investment platform. In other words, some set of stakeholders must create a vision for a sustainable city that both encourages and holds investment to account.

Examples of sustainable city policies abound, but examples of sustainable city policies designed to catalyze private investment are harder to come by. Four examples can help illustrate what might be necessary to make sustainable cities investable. First, the JESSICA program, a program of the European Investment Bank, encourages the creation of metropolitan-based investment funds that catalyze private investment by creating investment policies that use public money to catalyze longer term time horizons, and coordinate multiple sources of investment from public and private sources. In theory, the JESSICA program will help make investment in sustainable urban areas more attractive, and the place-based nature of the fund offers the potential for coordinating investment against a broader vision for a sustainable city.[13]

In the United States, Living Cities, a consortium of the country's largest charitable foundations, has begun efforts to integrate public policy and private investment towards share goals for urban regeneration. In a difficult investment climate generally, and in places in need of investments like Detroit, Cleveland, or Baltimore, Living Cities is working to integrate urban regeneration strategies so that multiple stakeholders have a share goal against which the value of specific deals can be measured. Not every deal needs to deliver the same social and environmental benefits, but together the deals are meant to create capacity, in cities as a whole, to receive sustainable investment.[14]

And in Rio de Janeiro, the Brazilian Ministry of the Environment, the municipality and state of Rio de Janeiro, and the US Environmental Protection Agency have begun work on a bilateral project that seeks to coordinate public and private investment opportunities in Rio, in anticipation of accelerated private infrastructure and other investment due to the World Cup in 2014 and the Olympics in 2016. This project aims to support the directing of investment towards the development of a sustainable Rio. A sustainable Rio includes efforts to extend public transit systems and transit-oriented development, improve water and waste management, and revitalize Rio's bays, so that access to economic and social opportunities for people of all classes is tied to investment and development criteria.[15]

Finally, Sitra's own low2no project in the Jatkasaari district of Helsinki has focused on ways to make the development of a city block -- through new urban design criteria, procurement strategies, and innovative use of sustainable materials -- both a model for and tool to create a market for sustainable development practices that can be extended throughout Helsinki, Finland, and beyond.[16]

Together these relatively new projects, even in their developing state, offer some suggestions as to how to make sustainable cities an investable opportunity for private markets. They suggest a series of considerations for making sustainable cities -- as cities, as places, as sources of mutually beneficial investment and positive externalities that generate both public goods and investment returns – investable.

Build a common table around the goal of a sustainable city: Coordinating public, private, and civil society actors around a common goal can lay the groundwork for sustainable investment from the private sector. At the level of the project, complicated deals requiring multiple sources of funding and multiple forms of approval from the public sector can benefit from linkage to clear sustainable development goals. At the level of the city, a coherent strategy for carbon mitigation can help match investment opportunities to investors who can achieve sustainability results. Perhaps most importantly, at the level of the city, a consensus set of goals can take the onus off any one particular investor, fund, or project to achieve everything themselves.

Think systemically about market transformation: Private investment in sustainability, especially in the built environment, can sometimes focus on one-off investment opportunities or signature projects rather than the development of systemic sustainable change. If the development of a sustainable investment ecosystem is necessary to support such change, attention must be paid not just to high-profile projects, but to robust investment intermediaries, community engagement, forums for coordinating different kinds of investment, pipeline generation of deals that serve a common goal, and procurement strategies that help create robust sustainable supply chains of goods and services.
Use land-use planning, regulations and incentives to guide the market: Even investors who focus on sustainability as an intended outcome are guided by regulations and incentives that promote public goals. A clear policy framework around land-use and green building regulations, incentives for energy efficiency and alternative energy production, or public private partnerships that match public and private money are all ways to help both catalyze private investment and to shape investment outcomes. The use of public policy must strike a balance between engaging investors and offering a reasonable rate of return on investments that make demonstrable contributions to urban sustainability.
Sustainable cities should be inclusive communities: The idea of a resource efficient, low-carbon city will not answer the challenges of climate change and resource scarcity if it is inaccessible or unaffordable to all but the wealthy or powerful. Otherwise, the gains in sustainability are likely to exacerbate social inequity at the same time that they outsource environmental damage beyond a city's borders. An integrated approach to supporting sustainability with social equity is needed to create truly sustainable cities. This is true both for the challenges of retrofitting and regenerating existing cities, and meeting the demands of the growing urban populations and new (mega) cities found especially in emerging markets.

Conclusion

The advantages of making sustainable cities an object of private investment should rebound to society and investors alike. A holistic view of sustainable cities, with a coherent plan for engaging private investors across the range of asset classes, sectors, and risk/return profiles that cities need for private investment, should allow for self-reinforcing positive externalities. Cities can coordinate their public policies and investments with private investors to accelerate the transition to a low-carbon economy within a framework that ensure the creation of public goods. Investors, in return, should be able to reap the benefits of more dynamic and resilient economies that will, over the long term, mitigate the risks of climate change, and help define and create new investment opportunities.

This virtuous circle will only be achievable if we move beyond one-off investment in projects and funds, and find a way to make sustainable cities themselves investable.

Footnotes:

[1] For an overview of our work at the Initiative for Responsible Investment on these topics see www.hausercenter.or/iri.

[2] United Nations Environment Programme , Cities: Investing in Energy and Resource Efficiency (2011).
http://www.unep.org/greeneconomy/Portals/88/documents/ger/GER_12_Cities.pdf

[3] See for instance Ryan Avent's elaboration of this theme in The Gated City (Amazon Kindle Single, 2011).

[4] This is obviously a relatively narrow definition, meant only to capture the family resemblance among efforts to make cities sustainable. For an example of a more comprehensive account see for instance Saskia Sassen, "Bridging the ecologies of cities and of nature," The 4th International Conference of the International Forum on Urbanism (IFoU) 2009 Amsterdam/Delft, The New Urban Question – Urbanism beyond Neo-Liberalism 2009.

[5] Private investor here is an umbrella term for non-public investment that seeks a financial return.

[6] The term "universal investor" has come to be used to describe those investors so large that, in order to diversify their portfolios, they cannot divest from the economy. For a good definition see James Hawley and Andrew Williams, The Rise of Fiduciary Capitalism: how Institutional Investors Can Make Corporate America More Democratic (University of Pennsylvania Press, 2000).

[7] The United Nations Environment Programme Finance Initiative has elaborated on this theme in a series of papers focused on the materiality of environmental information to investment decisions – see most recently Universal Ownership: Why Enviromental Externalities Matter to Institutional Investors (UNEP FI, 2011) and more generally the publications found at http://www.unepfi.org/publications/investment/index.html.

[8] See www.unpri.org for the Principles of Responsible Investment.

[9] Mercer's The Climate Change Report: the impact of climate change on strategic asset allocation can be found at http://www.mercer.com/articles/1406410

[10] For two recent efforts to address the role of institutional investors in sustainable investing see the OECD Discussion Note Della Croce, R., C. Kaminker and F. Stewart (2011). "The Role of Pension Funds in Financing Green Growth Initiatives" and Bolton, P., Guesnerie, R., and Samama, F., 2010, "Towards an International Green Fund", mimeo, September 2010.

[11] For more on impact investing see www..thegiin.org and the works cited there.

[12] We have posted a brief note on the global green bond market at http://hausercenter.org/iri/wp-content/uploads/2010/05/IRI-Green-Bonds-note.pdf. Climatebonds.net is an invaluable resource on the topic.

[13] On JESSICA see http://www.eib.org/products/technical_assistance/jessica. We included a short case on JESSICA as an impact investing policy in itiative in our paper, written with our partneres at Pacific Community Ventures, Impact Invseting: A Framework for Policy Analysis and Design, (2011) found at http://hausercenter.org/iri/wp-content/uploads/2010/12/Impact-Investing-Policy_FULL-REPORT_FINAL.pdf

[14] On Living Cities's approach see Ben Hecht, "Revitalizing America's Struggling Cities", Stanford Social Innovation Reveiew (Fall 2011) found at:

[15] For a brief introduction to this project, the Joint Initiative for Urban Sustainability, see http://www.epa.gov/international/jius.html.

[16] Low2no.org.

Green Markets Must Be Created By You

Tue, 13 Sep 2011 00:58:40 -0700

Most companies are dismally bad at creating successful sustainable consumption. Today's eco-attempts remain above all clumsy and expensive eco-versions of mainstream products. However real success lies in changing consumer behavior and creating new markets by designing unique products and services. Just like McDonald's did with restaurants, Apple did with mobile computing, Yellow Tail with wine and Airbnb with hotels. Finding gatekeepers is key to creating new markets by behaviour change.

Think about the difference between two accommodation options for travelers. One is a hotel that has worked on sustainability issues to gain more top end customers. On top of the usual "re-use the towels please," the hotel uses renewable electricity, offers local, organic and seasonal food, buys only energy-efficient equipment and is an active member of the Global Sustainable Tourism Council. This is costing them money, some of it can be seen as an investment since they attract more affluent visitors and save in material-efficiency, waste and in their electricity bill.

The other is a service—like airbnb.com—that lets people choose from temporarily vacant beds in the destination. The service works like a hotel-booking website, with the difference that you will be staying at a private apartment.

Now let's think about the ecological and business impact of these two options. The ecological footprint of the two accommodation options are very different. The hotel needs to be designed, built and maintained as a single use facility, and is leaving it empty most of the time. InterContinental Hotels has counted that the average carbon footprint of one night in their hotel in US is 59 kg / co2. Your stay adds to the inefficient use of the built environment, whereas your stay at someone's empty room, home or second home makes more efficient use of resources already taken. Using airbnb.com makes more efficient use of the built environment.

The business impact of airbnb.com is also significant. It is transforming hospitality markets.

Most importantly hotels operate in very competitive markets with customers requiring more-for-less all the time. airbnb.com operates on a new market that is based on changing the behavior of consumers. And this is a market that it now dominates. By offering ways to accommodate travelers temporarily, the new service creates its own markets.

The Paradox of Green Consumption

There's a great paradox in green consumption: Most most people in developed markets have ecological values, i.e. we value ecological products over non-ecological products, but eco-products sell typically only to 10 % of consumers. The paradox is that we value other qualities more. This paradox has paralyzed the sustainable consumer markets. There is no quick way out of this cul-de-sac of values. When looking at consumer values, environment is often number four or five in the most important aspects of the consumer decision making process. It's hardly ever number one but almost always it appears on the list. In fact it is unlikely that we ever shopping for a better environment. When we go to the store, we are shopping for better food, homes, and transportation, etc.

The paradox of green consumption has buried the mainstream ecological values under eco-efficiency and eco-niches. So far the most popular route to sustainability has been eco-efficiency: the attempts of to making make technologies and systems more efficient and therefore more often also cheaper. Increased efficiency creates remarkable cost savings for companies. At the same time the environment benefits directly as the use of fuel diminishes and emissions go down.

Unfortunately, finding efficiency is shadowed complicated by what is commonly known as the rebound effect: The more there is space on the hard disk, the bigger the files; the less gasoline planes use, more efficient the jet engines, the longer the flights. In other words, the more (eco-)efficient products and services are, the more their users end up consuming. Even if the rebound effect is hard to generalize, its logic is simple enough: increased efficiency frees up users' time and/or money for more consumption and creates an array of possible new uses for the technology.

A good example of this is LED lighting. LED's create light with a fraction of energy compared to previous technologies. Still they might well increase total energy use, argue Jeff Tsao of Sandia National Laboratories in New Mexico and his fellow scientists in an article published in Journal of Physics D: Applied Physics. The group modeled how the decrease in price of light (lumens) would impact the use of light. According to their model our use of light will rise tenfold in less than 20 years. The amount of electricity needed to generate that light would more than double. Only if the price of electricity were to triple would the amount of electricity used to generate light start to fall by 2030. (why? see this and this). It is not as if rebound effect would take eco out of efficiency on a full certainty. This illustrates the need for new behaviour, not just technologies as the key to reaching sustainable consumption.

The second, more recent, route to creating sustainable consumer business has been creating eco-niches via eco-versions and eco-branding. In essence it is asking a market segment to pay extra for eco-versions of mainstream products and services. Even if eco-versions tend to be inferior in performance, they are priced in the premium and attract those who recognise the ecological aspect as one of their top values. Unfortunately eco-versions remain niche. What can be summarized from consumer value studies is that the environment is a top value for a maximum of one tenth in customers, depending on the market of course. Values take a long time to change; generations rather than years.

Fig. 1 The Peloton Strategy (source: Demos Helsinki 2011)

The Peloton Strategy Creates Shared Value

We in the Demos Helsinki think tank have worked with hundreds of professionals from over 30 leading Finnish companies to try out a new approach to cutting emissions with business. We call our approach the Peloton Strategy[1] (peloton is the group that rides together to save energy on a bicycle race and it also means 'fearless' in Finnish). Peloton aims not just to make current choices more ecological but most importantly to change consumer behaviour: to create new choices, new products and services, new alternatives that are not based on efficiency and niches.

We have been successful in our main goal with Peloton. Most of the companies we worked with, have managed to shift the attention from what is the environmental impact of our enterprise to how we can benefit from the behavioural change of the our customers.

Peloton offers a way to bypass the paradox of green consumption by looking at markets instead of responsibility. Both eco-efficiencies and eco-niches marginalise the huge business opportunity there is in transforming our economies into a sustainable economy. The real opportunity, we believe, is in the ability to create new markets by changing peoples' behaviour.

Let's take an example from our practical work with hardware store chains. Our consumer of resources is the built environment. It is a widely known fact that the most efficient way to cut emissions is through energy refurbishments. Still the average family buying an old house and wishing to refurbish it is unlikely to find a service that can help them do the refurbishment in an energy-conscious way – let alone a service that can boast of creating itself new markets with energy refurbishments.

In our concept creation workshop, retailers discovered two things about their business when trying to grasp this market opportunity. Firstly, their hardware stores can and should access this market – it would do marvels wonders for their customer retention and value. Secondly, if they wish to access it, they need to understand customer needs much better and become more service oriented. We expect the first new hardware concepts based on these revelations to will see the light of day early 2012.

What Does Porter Say?

The hardware store case illustrates what strategy gurus Michael Porter and Mark Kramer call shared value. The concept was introduced in Harvard Business Review in january 2011. Porter and Kramer spell out how and why businesses that recognise shared value with their surroundings thrive.

"The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking."

Demand for a shared value business model is needed for many reasons. Customer demand is one of the driving forces but also politicians and public sector professionals are finding ways to get businesses to be part of the solution. Employees are looking for more meaningful jobs and Porter and Kramer argue that the a completely new generation of young people are is demanding that companies to solve problems that they ignored in their previous business activities. There is a deep need for shared value strategies.

The core idea of Peloton strategy is that the wicked problems behind the anticipated raise in energy price (climate change, peak oil and energy security) are here to stay and commence globally. Therefore a company creating products and services aiming to solve them has a practically nearly unlimited demand in the global market place. Freeing people from the need of for energy is one of the most probable future businesses.

According to Porter and Kramer, one of the main ways shared value can appear is the creation of new products and services (the other ways being redefining productivity in the value chain and enabling local cluster development). Peloton is about new products and services.

Let's take cutting emissions from existing building stock. We know that roughly 50 % of the buildings of 2050 are already built. We also know that their emissions need to cut by a whopping 90 % until 2050. All of the single family houses are owned by private individuals, its their homes as primary residence. This represents a considerable market opportunity for hardware stores. In one of the Peloton workshops the hardware store professionals owners saw the huge business potential that appears if a new business concept for repair constructors can be created by offering a home renovation service in additional to their traditional product lines.

For those whom read strategy literature this must sound familiar. W. Chan Kim and Renée Mauborgne call this kind of market creation blue ocean strategy. In creating new products and services there are two well know ways to go about it: competing over current demand and creating new demand. These two radically different notions are described by W. Chan Kim and Renée Mauborgne as "Red Oceans" and "Blue Oceans". In the red ocean modus operandi, the company looks at the product offering of its competitors and aims to differ from them by offering a cheaper price or becoming niche. The characteristics of Red oceans include fast commoditisation and "bloody competition".

Most, if not all, companies aiming to enter sustainable markets deploy red ocean strategies. Blue oceans strategies do not look at competition but alternative approaches and aim to reach new consumer groups. In a famous example Yellow Tail wine (launched in 2001, became the most popular wine imported to the United States and accounts for nearly half of all Australian wine purchased) was aimed at non-wine drinkers. Yellow Tail aimed to change the behaviour of non-wine drinkers. In blue oceans, demand is created rather than fought over. Competition is irrelevant because the rules of the game are being changed.

Similarly we should not ask how we can make our current products greener and therefore attract ecologically motivated consumers. Instead, we should be thinking of ways to replace the most resource-heavy forms of consumption.

This is a fundamental shift in perspective. It's a shift that makes sense both from the business and the natural resource perspective. For example: instead of asking how to make cars more efficient we're asking what kinds of services would free people from the need to take their kids to hobbies activities with cars and be bound do their daily and weekly shopping by car; instead of looking at the technical aspects of insulation and heating we're asking what kind of services would free consumers of the need for extra space for infrequent guests and storage of temporarily unused stuff.

The main criticism of blue oceans has been that they require some kind of a "push". Most organisations and employees are here to maintain status quo, no matter how bloody the competition. When deploying the Peloton strategy we have noticed that the push comes from employee emancipation: employees who previously worried of about their professions' contribution to climate change and other ecological ills, are deeply motivated when they can turn the table around and start working for the common good. They can be ethical and successful in their professional careers.

Meet the Gatekeepers

The Peloton approach solemnly destroys the distinction between sustainability professionals and business professionals. This is good news for professions previously cursed with the pressure of creating emissions – plenty of the professions involved with homes, transport and food (the largest sources of emissions in the developed world) are also in the position to cut emissions by creating new business. So what previously was a disincentive at work can now become a motivator. Whereas traditional estimates of the percentage that "green jobs" represent of in the total workforce are very low, our rough estimation is that as much as one fifth of all current jobs can impact people's largest energy decisions (and therefore are in an excellent position to create new markets).

Fig. 2 Peloton Workshop with Hardware Store Gatekeepers (source: Demos Helsinki November 2009)

Through our research and work on the ground in communities and with business, we have identified a key stakeholder in the sustainability equation: Gatekeepers. Gatekeepers are professionals and industries that are present in our big energy decisions, i.e. decisions that lock our energy use to a certain level for a long time. Gatekeeper groups and industries are many: banks that negotiate loans for property; restaurants and grocery stores that define our diets; lifestyle media who create the idea of normal homes and diets; children's hobby-providers that either require a private car or don't; hardware stores that sell materials for refurbishers renovators and so forth. We have worked with a total of 11 different groups of gatekeepers: food retailers, lifestyle media, parents-peer-communities, restaurant chains, hardware stores, rental housing companies, real estate managers, HR- and business services, food journalists and home economics teachers - all of whom have recognized how they can increase the value of their work by "opening the gate", i.e. starting to create new ecological products and services.

Peloton Strategy Tools

To make the Peloton strategy easier for companies to adopt we have created an array of strategic design tools. The idea of the following tools is to help companies put customers at the center of emission cutting sactivities and products.

Visualisation: Decision Tree

The Decision Tree breaks down consumer energy use into everyday decisions. Impacting those decisions is the foundation of the Peloton strategy. Each decision identifies a place for new business. For example freeing the individual from car use is rich in new business opportunities, not just rental cars, car-pools, taxis, public transport and so forth, but also in the services that enable children's hobbies and grocery shopping take place without the need for a car. Even human resources and office management services fall to this category. The key is that each business seeking to deploy the Peloton strategy should look at what decisions create their customers' footprints and look at ways to offer alternatives for these decisions. Here's an example of a decisions Decision Tree.

Fig. 3 Decision Tree of Energy Consumption (source: Demos Helsinki 2008)

Guaranteeing Implementation: The Gatekeepers

The Peloton strategy has an asset that other strategic bold moves often lack: it resonates with the value base of the employees and taps into professional pride. When working with Gatekeepers from industries that are present when consumers make big energy decisions, we have found that the Peloton strategy motivates them by transforming their professions from sinners into heroes. Instead of having to feel bad about one's work that "causes" emissions, the Peloton strategy emancipates the same professionals into people who can both create new business, succeed in their work and help curb their customers' emissions. Understanding this, we have stressed the importance of personal and even ethical engagement to the Peloton strategy.

Human Centricism: Behaviour Change and Value Matrix

Companies usually look at value studies of their target market segments, conduct focus group research to reach the emotional level of their customers, but fail to understand why the values and emotions do not materialise in action. Looking at research on behaviour change we can start to understand why the ecological values found in the studies do not manifest themselves in the markets. The key to these studies is that people are driven by what they think is normal and what they think their peers do, and only after that come incentives, values and information. We have also noticed that looking at value matrices is useful: it appears that most ecological products and services are targeted to people with a universalistic or traditionalistic value set, where as people whom value for example achievement, hedonism or stimulation find it difficult to identify with the offering.

Fig. 4 Peloton Value Matrix (source: Basic Human Values: An Overview Shalom H. Schwartz The Hebrew University of Jerusalem 2005 - 151.97.110.134)

Right scale: Big Decision

There will almost certainly be a real backlash from the current way of marketing almost everything as ecological. So how to does one know what really matters when deploying the Peloton strategy? To find out where strategy can have the biggest impact, we divided decisions according to the impact they have and to how often they are taken. From the decision matrix you are able to find the sweet spot among decisions that are both rare and have a big impact. In other words the Peloton strategy focuses on decisions that have a significant and long lasting impact. The decisions that lock customers' footprints on a certain level for a long-time (often their whole life) are the key to creating new markets.

Fig. 5a and b Matrix of Big Decisions (source: Demos Helsinki 2011)

Peloton Strategy Lessons Learned

In the series of workshops we have been running with key Gatekeeper industries (for example hardware stores, grocery stores, etc.) we have looked at how to create blue oceans of sustainable consumption. Our findings demonstrate that understanding the needs, perspective and motivations of people in during their big resource and energy flow decisions can create fourfold benefits for companies:

1. Opening gates drives personal engagement and strategy deployment.
People who are gatekeepers Gatekeepers by profession are emancipated by the fact that by doing their job well they can help people live according to their values and save the planet. In other words the cognitive dissonance caused by the ever increasing ecological consciousness and our day-to-day jobs can be turned into an asset. We have reason to believe that this can have a serious impact on the productivity and innovativeness of the workforce. A burgeoning mountain of studies show that being able to express one's values at work (or at least not to be forced to work against them) is increasingly important for the workforce at large – especially on workplaces that already recognize themselves as "value-driven" and "human-centric".

2. Understanding energy is understanding people.
Energy has a special nature – it can be used as labour almost anywhere. Therefore looking at the consumption of energy on an individual and household level tells an interesting story about their lifestyle. A recent Finnish study discovered 11-fold differences in the environmental footprints of households – on households that all had outspoken ecological values. We have seen that in practise this means that the use of resources works as a great "map" for understanding people, as powerful as the use of time or money. In practice, understanding the reasons behind peoples' use of energy and other natural resources offers quick steps toward customer-centric business – something that has been very hard for most Gatekeeper-industries such as food and construction. Therefore becoming a Gate Opener—changing consumer behaviour with new services and products—can help a company tremendously in becoming human-centric. Once again companies with an outspoken customer-centric strategy have succeeded best in adopting a Peloton strategy.

3. Concept is king.
Products and services that change customer behaviour need to be communicated by strong concepts. Concepts are business offerings that you and your customers understand and they are paramount in to creating new behaviour. Concept is a way of communicating: this works differently. The classic example of a concept is a fast food restaurant. You order, pay and receive your food at the counter. The concept means that people using the restaurant understand how it is supposed to work. Successful concepts offer people a new way of doing things rather than aim to differentiate in price, brand or other traditional marketing factors. W. Chan Kim and Renée Mauborgne call concepts "taglines": "Tagline is a phrase that captures the essence of the "to be" strategy in a way that speaks forcefully to both a company's employees and the target mass of buyers. A blue ocean strategy has a clear-cut and compelling tagline. A compelling tagline ensures that the strategy makes sense. It helps customers identify immediately what is offered, and it helps employees identify what they should concentrate on, thereby, bringing focus to the execution of the strategy." We could not have put it better ourselves.

4. Governments can't do it alone.
Curbing emissions by law has been difficult for governments all over the world. In our experience, Peloton companies have been proud to recognise they have an important role in cutting emissions. Politicians need to reshape their idea of sustainability from only suppressing emissions also into creating markets and behaviours. Businesses do not only do business, they also affect to people's everyday lives.

Freeing people from the need of for energy is one of the most probable future businesses. This can only be done by understanding the big energy decisions and whom can impact them. Adopting the Peloton Strategy means becoming fearless. To have the confidence in opening the gate of new markets of behaviour change.

Footnotes:

[1] A book on Peloton Strategy and Gatekeepers of Behaviour Change will be published spring 2012. Peloton has been developed in collaboration with Sitra's Energy Programme.