Gaza is a landscape of extreme economic deprivation born of the region’s complicated political dynamics – but one whose contours may soon become more common. So why may The Gaza Strip be The City of The Future? Let us see what World (c) 2021 and Zach Mortice, Bloomberg tell us.
When Americans turned on the TV or glanced at their smartphones for news of the deadly clashes that engulfed the Gaza Strip in May – or if they followed the more recent spasm of violence in August that threatened to break the region’s fragile truce – many saw scenes that looked familiar: streets flooded with protesters, engaged in a struggle against highly armed security forces on the streets of a battered-looking city.
In many ways, the political and physical conditions of the Gaza Strip are unique: Nearly 2 million people are packed into a 25-mile-long rectangle of land along the Mediterranean roughly the size of Philadelphia. For decades, the territory has been home to Palestinians displaced by the founding of the state of Israel in 1948, and subject to Israeli occupation since the 1967 Six-Day War. But since 2007, after the political wing of the Islamist group Hamas was elected to power, Gaza has been under an Israeli blockade. In response, Hamas militants have attacked Israel with suicide bombers and missile attacks, and the two sides have settled into a gruesome rhythm of low levels of violence punctuated by intense conflagrations. In May’s fighting, as many as 260 Palestinians were killed; in Israel, 12 people were killed. Gaza is a landscape of extreme economic deprivation born of the region’s complicated political dynamics – but one whose contours may soon become more common.
That’s the premise behind the recently released book Open Gaza: Architectures of Hope, published by imprint. Edited by, an urban geographer who focuses on the Middle East, and essayist, theorist, activist, and provocateur Michael Sorkin, the book presents a vision of Gaza as a glimpse of an imminent future, where violence, surveillance, resource scarcity and provisional use of an extremely compromised built environment are visited on all.
Sharp sees connections, for example, between the unrest in Gaza and the racial justice demonstrations in U.S. cities after the murder of George Floyd in 2020: In both, the key issue is who has a right to the city – the right to claim contested urban space. “The Black Lives Matter protests and that broader movement and recognition of the types of oppression that are going on [in Gaza] is something that’s been made visible,” he says.
The Gaza Strip, the book’s promotional copy declares, is “one of the most beleaguered environments on earth.” But the territory and its urban center, Gaza City, is appallingly understudied in terms of architecture and urbanism. That makes it a fitting swan song for Sorkin, who died last year of Covid-19. “Michael wanted to go where others wouldn’t dare,” says Sharp.
Featuring contributions from scholars, urbanists and architects from the occupied Palestinian territories, Israel, India, the U.S. and the U.K., the book’s essays explore the extant condition of Gaza and its wider socio-political context, and offer speculative designs aimed at wresting back sovereignty and dignity for its residents. It posits that the ad-hoc, low-carbon design techniques that Gazans have developed look ahead to a planet failing to meet the challenges of a climate cataclysm, a global pandemic, and growing inequality. As brittle regimes are wracked by crises, mass migrations harden borders, and infrastructure buckles, Open Gaza suggest that the rest of the world may start to look more and more like Gaza.
Or has already. Anyone who’s searched for clean water in Flint or has seen their home destroyed in wildfires or floods might understand what who contributed to the book, means when she says, “The Palestinianization of cities is happening worldwide. It’s happening by destruction and erasure, but also with dramatic climate change.”
Eco-Adaptation by Necessity
Open Gaza isn’t content to just praise the ingenuity and resourcefulness of Gazan and allied urbanists and architects; nor is the book interested in depicting Gaza purely as a dystopian prison. “You could call [these visions] utopian, but I think these are alternative possibilities,” says Sharp. “They’re not fantasies.” Instead, the collection serves as a “demand that [Gazans] be able to live and shape their urban context and infrastructure, and social lives in ways that are dignified and respectful of their humanity,” he says.
The book presents Gaza’s architectural condition – extant and speculative – as defined by its power imbalance with Israel. This asymmetry means Open Gaza is free of the antiseptic techno-solutionism that often populates architecture tomes. Such documents often claim that low-carbon buildings, made from nothing more than the trees and dirt on their plot of earth, will exist in an atmosphere of happy consumers sipping lattes poured by robots, munching on locally sourced avocado BLTs. Open Gaza tells us this scenario might be a fairy tale. The book’s prescriptions operate with found conditions and severe local constraints on materials; it suggests that your first shower warmed by solar power might happen in between air-raid sirens.
This reality is why buzzwords like “sustainability” or “resilience” don’t mean anything to the average Gazan, says Palestinian architect Salem Al Qudwa, who writes about the territory’s quotidian, everyday buildings. , recycling brick may be a way to save carbon and bestow new buildings with the patina of age. But in Gaza, there is no choice.
Al Qudwa has developed “incremental housing” templates, he says, that begin by setting foundations and structural columns, and letting Gazans fill in the gaps, creating a low-cost lattice for expandable housing units that feature shaded courtyards and roof decks. Homes often lack electricity, so cross-breezes are essential. Made from local materials, they offer climate-attunement Al Qudwa says non-local NGOs intent on building often miss. “My people need decent shelter,” he says. “A good house with proper insulation, with natural light, etc.”
There is no nostalgia for vernacular buildings or ways of living, says Sharif, but these practices are critical. “Gaza is looking at environmental practices out of necessity,” she says. “The only way forward is [through] traditional ways of living because there is no alternative.”
Rafi Segal and Chris Mackey’s “Solar Dome” – whose name riffs on – makes the convincing case that there are few places better suited to an entirely solar grid. Gazans uses less than 2% of the average American’s energy footprint, and Gaza’s sunny climate further reduces the need for expensive energy storage. And the concept of “energy independence” takes on new meaning when citizens acquire utilities from . As such, Segal and Mackey recommend a system of building-scaled photovoltaic panels augmented with solar water heaters, and a district-scaled system of concentrated solar power towers.
Similarly, a chapter by Denise Hoffman Brandt unveils a plan for pavilions that collect fresh rainwater and use sunlight to desalinate groundwater, and floating ocean desalination pods made from trash.
Sharif’s “Learning Room” plan, detailed in her chapter of Open Gaza written with Nasser Golzari, addresses the imposed mutability of Gaza’s built environment. A system of modular, mobile shelters made from, rammed earth, wire mesh, bamboo, and more, it’s a migrating community center for exchanging skills, made from rubble itself. “The idea of the was not to see it as a permanent structure that is going to shape the identity of the city,” says Sharif. “It was an experimental space [you] can keep modifying and changing. It’s not a new urban structure. It’s more of a lab to allow new structures to happen.” In this way, the Learning Room underscores the difficulty of long-term planning in Gaza.
It also distills the tactical flexibility Gazans must demonstrate to keep themselves housed. Western architects have made it a polemic to use only materials close at hand – to design their buildings as a bird builds a nest. Architect Jeanne Gang , but it’s unlikely Gazans need such a reminder.
The most visceral and imaginative collision of low-carbon aspiration with apocalyptic utility arrives in Helga Tawil-Souri’s chapter on the IPN: “The Internet Pigeon Network.” To surmount Israeli restrictions on electricity and bandwidth, the NYU media scholar proposes a decentralized network of pigeon roosts, trainers, and pick-up nodes. This avian internet would fly pigeons with flash disks tied to their necks from point to point, offering a faster and more secure way to share information. Reliant on local knowledge and labor, it’s another way of Gaza asserting infrastructural independence.
A Different Kind of Smart City
But it’s not as though the built environment of Gaza is untouched by technology. In some ways, the digital network that monitors the city and its residents represents a variation on the data-intensive “smart city” concept – another way Gaza looks ahead to the future.
Since 2014, Gaza’s reconstruction has been managed through an online database called the Gaza Reconstruction Mechanism (GRM). , the GRM records all the building material that flows in through its border, along with what it’s to be used for and who will receive it. The mechanism, designed to ensure that resources aren’t being used for military purposes by Hamas, was agreed upon by Israel and Palestine, and was meant to be temporary. But Franceco Sebregondi of says it puts Israel in an “ultimate supervisory role”: His chapter in Open Gaza, called “Frontier Urbanization,” details how the GRM gives Israeli authorities a granular picture of Gaza’s built condition, and the ability to delay Gaza’s rebuilding.
Such omniscience is increasingly a goal of the design and building industry, where there’s a push to translate plans into data and ensure that what’s built closely aligns with digital models, to more efficiently manage construction and operational performance. But that’s not the only way it could be used. How much of this information, for example, might a refugee resettlement nonprofit at the U.S.-Mexico border want to share with immigration authorities? While the GRM is relatively primitive, its broad usage across Gaza still creates a map of its reconstruction that exists nowhere else.
For, who earned a PhD on the architecture of the Gaza blockade from Goldsmiths, University of London, this intrusion reveals that the problem of the smart city is not technical. It’s political. As with sunny visions of our eco-friendly future, design and urbanism themselves have no inherent autonomy to resist political agendas, and their calls for ease, efficiency, and low-impact living make ready Trojan Horses for power. “Who will be in charge of accessing certain data?,” says Sebregondi. “What levels of transparency and access [are] granted by using this infrastructure? I don’t think that the technologies behind smart urbanism cannot be re-engineered toward serving another idea of collective urban environments. But the ones that are currently marketed and very light-heartedly deployed across our cities tend to pursue the opposite.” This, he says, is a “dark horizon we need to avoid and fight against.”
The complex intimacy of the Israeli-Palestinian conflict has turned the region into something of a proving ground for purpose-built surveillance technology that could be plugged into a future smart city. Indeed, Israeli companies are selling cybersecurity technology all over the world, including the U.S., where it’s used in a new training center .
Sebregondi sees Gaza as further along a continuum of ricocheting colonial violence: As states become more fragile and defensive and climate change adds layers of stress, inequalities skyrocket and people divide into camps. Where these two groups are anywhere near each other, the market for surveillance and control technology booms. Debates over the on the streets of U.S. cities and the rise of privacy-eroding public safety technology have collapsed the distance between Palestine and Pittsburgh.
“There is an extent to which Palestine becomes a sort of crystal [ball] of this particular future, within a very compacted and dense territory, [featuring] some of the most striking aspects of this splintering urbanism,” says Sebregondi. He describes the “boomerang effect of colonization,” where techniques to wield control over restive populations in distant countries eventually come home, as with the NSA’s experiments using the.
It’s a cycle that’s eradicated distance, says Sharp, pulling Gazans and the rest of the world closer together, and bringing the front lines, already at their doorstep, into ours.
“These circulations of violence and containment,” he says, “come back to haunt us all.”
FIOR Reports post By Becca Roberts on Smart Cities as to How Technology Is Helping To Rebuild War-Torn Regions could be made good use of in several of the MENA region’s broken and/or stagnating countries.
Smart Cities: How Technology Is Helping To Rebuild War-Torn Regions
The above image is of Part of the new Heydar Aliyev Center in Baku, Azerbaijan, which was built as part of extensive redevelopment efforts on the former Soviet territory. Image: Bojan Stojkovski / ZDNet
For more than three decades, the disputed Nagorno-Karabakh region has been at the center of much disagreement between the neighboring Caucasian states of Armenia and Azerbaijan.
The city of Agdam once had a population of 30,000 but was hit hard by the conflict. Now it’s a ghost town.
Since it began in 1988, the conflict over the region has also produced more than a million refugees and internally displaced persons (IDPs). Now as Azerbaijan seeks to gradually rebuild the country hit by the struggle, authorities hope technology can play a central role in encouraging citizens to return to the region by creating smart cities and villages that offer better ways of life encourage.
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According to Anar Valiyev, urban planning expert and associate professor at ADA University in Baku, building new communities supported by digital amenities will make the region more attractive not only to returnees but also to those who have stayed in the region Conflict.
The first planning phase is followed by a pilot project in which a number of “smart villages” – referred to as Aghaly-1, Aghaly-2 and Aghaly-3 – are being built in the Zangilan region of Nagorno-Karabakh. More than 200 houses are being built here from innovative building materials such as recycled steel and precast concrete and connected to intelligent electricity, gas and waste disposal companies.
“Alternative energy sources are used for all residential buildings, social facilities, office buildings, restaurants, processing and production of agricultural products.”
Bridging a digital divide
Building new, digitally supported communities will also serve to bridge the gap between the Azerbaijani capital Baku and other urban and rural areas.
Such projects could also entice young Azerbaijanis to move to the Nagorno-Karabakh region in search of new opportunities. Eldar Hamza, 26, is one of them.
During the first Nagorno-Karabakh conflict, Hamza’s family was evicted from the town of Fizouli, which had a population of around 17,000 before the war but became a ghost town after they escaped.
“I also believe that most of them will return to live here if there are opportunities for large companies to lay off workers in the area.”
Eldar Hamza, 26, now works as a tour operator in Baku after his family was displaced by the first Nagorno-Karabakh conflict.
The nearby city of Agdam is also being rebuilt. Before the conflict, the city had almost 30,000 residents. Now, like Fizouli, it is practically deserted.
“We are in the planning phase and are now designing various locations,” said Emin Huseynov, Azerbaijani economist and special representative in the Agdam district, opposite ZDNet. “But the most important [part] is the basic infrastructure that is being made now. When it’s done, we’ll start building the city. “
The development of smart cities should be a boon to Azerbaijan’s ICT industry, which is still in its infancy, and its oil-oriented economy.
In 2016, ICT was one of eleven economic sectors identified by the Azerbaijani authorities as being of strategic importance to the country. The country has now adopted a strategic roadmap for its development; However, according to a report by IPHR and Azerbaijan Internet Watch, the ICT sector represented only 1.6% of Azerbaijan’s total GDP in 2020.
“I think that the ICT sector will develop faster because the development of smart cities also requires faster development of information technology,” Valiyev told ZDNet Informatik und Systemtechnik.
There is also great interest in IT and agriculture. Dmitry Andrianov, founder of Baku-based tech magazine InfoCity, says the development of smart cities and smart villages in the liberated areas of Karabakh should prove to be an incentive for the advancement of the Azerbaijani technology sector and points to the growth of the young IoT startup Sumaks and agritech startup Kibrit.
“All of this helps to create sustainable demand for young IT specialists,” says Andrianov.
Published on 20 September 2021, in E&T, AJ Abdallah’s question of How will artificial intelligence power the cities of tomorrow?
How will artificial intelligence power the cities of tomorrow?
By AJ Abdallat, Beyond Limits
Achieving a decarbonised future will require efficiency-boosting measures that AI can help to identify and implement.
Artificial intelligence is taking the stage as smart cities become not just an idea for the future, but a present reality. Advanced technologies are at the forefront of this change, driving valuable strategies and optimising the industry across all operations. These technologies are quickly becoming the solution for fulfilling smart city and clean city initiatives, as well as net-zero commitments.
AI is becoming well integrated with the development of smart cities. A 2018 Gartner report forecast that AI would become a critical feature of 30 per cent of smart city applications by 2020, up from just 5 per cent a few years previously. Implementation of AI is rapidly being recognised as the not-so-secret ingredient helping major energy providers accomplish their lowest-carbon footprints yet, along with unparalleled sustainability and attractive profit margins.
What makes a city ‘smart’ is the collection and analysis of vast amounts of data across numerous sectors, from metropolitan development and utility allocation all the way down to manual functions like city services. Smart cities require the construction and maintenance of arrangements of sensors, equipment and other systems designed to create sustainability and efficiency.
Altering the strategy behind a city’s utilities operations is one of the major keys to making it smarter and more sustainable. AI solutions are already making significant strides where this is concerned. As the CEO of an AI company creating software for the utilities sector, the impact that advanced solutions are already having on the industry is something I’m very excited about.
One real-world example of AI powering smart city utilities is the Nvidia Metropolis platform, which uses intelligent video analytics to improve public services, logistics, and more. Nvidia describes it as being designed to: “create more sustainable cities, maintain infrastructure, and improve public services for residents and communities.” The company collects data from sensors and other IoT devices, city-wide, to provide insights that can lead to improvements in areas like disaster response, asset protection, supply forecasting and traffic management.
Another solution at the forefront of building smarter cities is a project led by Xcell Security House and Finance SA that aims to build the world’s first power plant guided by cognitive AI, driving utility development in West Africa. As the earliest implementation of an AI-powered plant from the ground up, it will employ advanced sensor-placement technology and techniques that embed knowledge and expertise into every part of the facility’s processes. Stakeholders will have streamlined access to facility-scale insights, creating a plant environment with greater risk mitigation as well as maximised efficiency and productivity.
These are just two of many emerging applications of AI in smart city development. When applying AI, the sector also stands to achieve greater cost and operational efficiencies in several key areas such as predictive maintenance, load forecasting/optimisation, grid reliability, energy theft prevention and renewable resource optimisation.
When discussing energy efficiency, many factors enter the picture, including the impact of environmental factors as commonplace as temperature and humidity levels. Historically, experienced human operators were best equipped to identify efficiency-boosting adjustments. Today, cognitive AI is making moves to encode that human knowledge and expertise across providers’ entire operations, delivering recommendations at a moment’s notice. Explainable AI creates the trust necessary for operators, engineers and stakeholders to solve acute issues quickly. The system’s shrewd situational awareness helps detect, foresee and solve problems, even when circumstances are in constant flux – scenarios as critical as an entire city’s water and power supply.
AI is already playing a principal role in supporting the move towards smarter cities by helping entire sectors get closer to efficiency and net-zero objectives. Achieving a decarbonised future will require more resourceful processes that boost efficiency and reduce waste. AI for utilities can elevate productivity, yielding more attention around resource consumption, and hastening the adoption of renewable, carbon-friendly strategies on a global scale.
According to a report from IDC, smart city technology spending across the globe reached $80 billion in 2016 and is expected to grow to $135 billion by 2021. It is imperative that companies, industries, and other entities looking to participate in this important stage of digital transformation seek out industrial-grade AI companies with software that provides holistic, organisation/sector/city-wide insights through sensor placement technology and data collection techniques.
Governments at every level, as well as public and private organisations, are facilitating technological implementation and digital transformation. Private and public partnerships have become a major mechanism by which cities can adopt technology that makes them smarter. The best course of action is to embrace AI that blends knowledge-based reasoning with advanced digitalisation techniques, helping stakeholders distinguish unanticipated scenarios and make tough choices.
Choosing the most dynamic form of AI to transform the utilities sector will contribute remarkably to the development of smart cities. Enhanced communication, strengthened collaboration, increased fuel savings and decreased waste will help companies – particularly in high-value industries – to increase their profits. Indelible process improvements, like streamlined operational capacities where all facilities function more efficiently in harmony, are the future of smart city technology.
A Bankers without Boundaries made a proposed mechanism to address the challenge of scaling energy efficiency measures in the urban built environment. It is suggested in this article as a Green Neighbourhoods as a Service for all concerned a welcome step in the right direction.
The above image is for illustration and is of Climate-KIC.
Reducing net energy consumption in the built environment is one of the most significant and hardest problems for cities to solve to meet net zero carbon timelines. In our experience, typically, these emissions contribute 30-40% to a city’s total CO2 emissions. In this article we look at why it is so challenging and propose a mechanism to kickstart retrofit at scale.
A Challenging Problem
Reducing emissions in the built environment is an extremely complex problem with multiple components. Many of these complexities arise from an underlying assumption, in nearly all jurisdictions, that solving the problem is the responsibility of individual property owners. Multiple individual actors must make independent decisions leading to a fragmented response to the challenge.
Even ignoring this fragmentation, targeting individual property owners with economic incentives alone is failing anyway due to two interlinked problems
The value of returns (energy savings) is not connected to the capital spend. Returns occur over many decades and a building owner must be confident that they will enjoy those benefits for at least 30 years to have a hope of creating a positive economic case. Most building owners cannot commit to owning the property over that period; therefore, the net present value of energy savings is undervalued by the capital spender relative to its true worth.
Even assuming the building owner can commit to 30 years of ownership, the economics of delivering deep decarbonisation in a way that is attractive to citizens (Deep, Community Retrofit) has poor economic returns (negative IRR) even assuming a 30-year investment period.
Figure 1: Not all retrofit is created equal
If economic rationale alone is not enough, decision making and financing must balance competing goals – economics, decarbonisation, community benefits and social & health impact, which requires a broader viewpoint than an individual building owner.
As a result, current solutions, which are frequently designed to be adopted by property owners, are failing. This has led to the paralysis we see in the market with negligible levels of building level improvements which improve energy efficiency (“retrofit”) occurring, despite various subsidy schemes being offered and financing costs being at historically low levels for some time.
Most existing solutions start with a premise that since it is down to individual property owners to commission work on their own properties, it is also therefore assumed that the energy and maintenance savings benefit accrues to them too and that this should form the economic rationale to carry out the project.
Even after discounting other barriers to entry (complexity of deciding what work to commission, project managing multiple trades, applying for subsidies, the misalignment of landlord and tenant incentives in the rental sector) the economic returns are not high for ambitious retrofit and require the property owner to remain in the property for decades to realise them. Therefore, the net present value of these savings is not being leveraged to solve the problem in the most effective way.
The sheer scale of retrofit that is required to improve inefficient buildings is also often touted as a problem. The costs of an ambitious retrofit programme are huge and go well beyond the public purse. To compound the problem the energy savings that can be achieved are not high enough for traditional financing on its own. To achieve this scale public finance will need to be blended with private capital in some way to provide the level of finance needed to achieve the scale required. In addition, retail investment and citizen engagement need to play their part in the equation to increase visibility and feasibility.
An interlinking issue for many countries is that of regional inequalities. Governments, such as the UK, have made levelling up regional differences a key policy initiative. Existing retrofit plans stand to exacerbate this issue. In the UK for example average house prices in London are £661k, but only £200k in the North East and North West. Average loan to value ratio is 82%. Retrofit costs are broadly uniform across the country, so a deep retrofit at £40k would equate to 6% of property value or one third of average equity in London, but 20% of property value or 110% of equity in the North. Clearly a policy led strategy that forces retrofit debt onto house owners would be deeply regressive for the North.
Any scalable solution must address the fragmentation of the problem which arises from individual decision making, allowing more systemic decision making to happen, economies of scale to materialise and progress to finally be made. This requires a fundamentally different approach.
There is also real opportunity in this space.
Figure 2: Opportunities
Green Neighbourhoods as a Service – A Proposed Solution
To address the mismatch between ownership of the capital spend and of the value of benefits, tackle the fragmentation issue, overcome barriers to entry, allow aggregation of projects and matching of different types of finance that will be needed, we propose a new more centralised model which we call Green Neighbourhoods as a Service (GNaaS).
GNaaS envisages the establishment of a central entity in a city or region which designs, commissions, manages and funds deep energy retrofit on a street-by-street scale with incremental community investments at no cost to the property owners, regardless of ownership and usage typology.
By centralising the design process, more systemic energy decisions are made, for example around local energy systems and integration with district heating.
By centralising procurement, greater economies of scale are realised, improving economics and providing a lead market to the supply chain creating an environment for investment.
By operating at a community scale, additional projects such as resilience building, co-working spaces and green infrastructure in the shared spaces can be implemented at lower marginal cost. This drives greater impact and citizen engagement, changing the process from a “retrofit programme” to a “neighbourhood greening and investment programme”.
By centralising funding, projects can be aggregated on a neighbourhood scale allowing access to completely different types of funding and crucially removing the requirement of indebtedness for individual property owners, which is a key barrier.
To fund the work, a mechanism is needed to attach the long-term energy and maintenance savings to the centralised funding source. The proposal is that this takes the form of a long term (30 year+) comfort and maintenance contract with the resident. The contract would be embedded into the property deeds so that it automatically novates to whoever lives in the property and does not follow the individual when they move away. Alternatively, the resident would be offered the option to contribute the funding for their property directly in which case they would receive the full benefits of reduced energy requirement going forward without any need to engage in the design, procurement and delivery process.
Figure 3: Operating Mechanism
This is not an ESCO model (1). The resident would retain their relationship with existing utility providers for any grid power that they require post retrofit. The significant reduction of energy use achieved through demand mitigation measures and maximising localised heat and electricity generation would create the financial space for the payment of the comfort and maintenance fee at no aggregate increase in cost to the resident.
Contracting all the energy and maintenance savings to the GNaaS organisation would maximise the potential for return-based finance in the funding model. Implementing governance structures that align the decision-making processes with the overall goals of the city could create a mechanism for social outcome goals to be included in contractual terms.
This mechanism could provide a theoretical lever to the public authority to leave part of the savings with the resident enabling the mechanism to become a powerful tool in tackling fuel poverty.
Figure 4: Funding Flow Through the OpCo / FinCo model
The Capital Stack That Will Be Needed
From the modelling work we have done with several cities, the internal rate of return (IRR) provided by the energy savings from this blended set of neighbourhood interventions is consistently negative, even assuming a 30-year payback period. But by considering a large enough layer of various non-repayable funding sources, or impact finance, we can move the IRR for the remaining funding requirement into positive territory. Furthermore, adding returns from other sources, e.g. health improvement, can further improve the pay-out profile.
The resulting model creates a potentially multi-billion, stable and low returning financial investment opportunity for sources of patient capital that also value a robust set of impact metrics such as decarbonisation, healthcare improvement, fuel poverty abatement, educational outcomes, air quality improvements or biodiversity gains. We would argue this could be a good fit for sources of capital such as pension funds and insurance companies, which are increasingly demanding products which offer impact related benefits in addition to a financial return, under pressure from underlying asset owners and regulators.
Further, it is a structure that can take in repayable, but zero or ultra-low coupon, finance from multilateral or development finance institutions seeking climate change impact and/or post-COVID recovery funding.
In addition, there is an opportunity to offer participation for local communities to invest through a community bond type structure allowing direct participation in the returns.
For the non-repayable layer of finance, various components will need to be combined.
Funnelling existing municipal budgets earmarked for improving energy efficiency of public owned properties into the mechanism
Repurposing existing subsidy schemes into the mechanism
Additional national/supranational grant funding schemes aimed at decarbonisation and/or post-covid recovery; the work is labour-intensive and community wealth building activities relating to asset maintenance and green infrastructure can be incorporated.
The potential to incorporate other outcome seeking pools of funding, for example allocation of healthcare budgets into what would become a preventative programme reducing future burden on the health care system, biodiversity improvement funding etc.
An option for building owners to fund the work themselves and have the occupant benefit from the energy savings. They still benefit from the centralised orchestration, better economics and broader impact.
Exploration of the potential to accredit such centralised and scaled retrofit programmes as sources of carbon credits for voluntary carbon offset schemes allowing corporates to achieve their own net zero targets by buying credits that directly improve the communities they operate in and their employees live in.
Figure 5: The proposed Capital Stack with illustrative figures
There are significant governance issues to solve in designing how this entity would operate and to align its actions with those of the public sector. We propose it would be a not-for-profit organisation using a standard return-based fund management fee structure to cover its own operating costs, with involvement from public sector officials in supervisory committees etc to ensure alignment.
We are not claiming that this proposal is yet a finalised solution; there are many complexities to work through (several which are being tackled in pilot projects planned in Milan and Zagreb). However, we are convinced that this concept has the potential to unlock the scaling of improved energy efficiency in the built environment in a meaningful way.
Integration with a mechanism to help scale beyond pilot phase, taking learnings from models like LABEEF in Latvia to enable an ecosystem of private sector contracting firms to take over the heavy lifting work of much of the OpCo envisaged above, thereby creating competition leaving the OpCo part of the retrofit company as a commissioning and refinancing engine for implementation firms.
Technical assistance funding is required to further develop this work, on the finance side, but also to develop the engagement process with citizens, scope out the legal challenges around contracting as well as integration with the supply chain
Pilots will need to be run in multiple cities to prove out the concept. We would envisage these covering 2-300 residential units at a total funding cost of €10-15m each. Pilots are in advanced stage of design in Milan and Zagreb) though engagement has begun in multiple cities across Europe including Copenhagen, Leuven, Vienna, Krakow and Edinburgh.
Funding providers, including private sector impact finance firms, development finance institutions and philanthropic outcome purchasers will need to engage who are willing to partner with cities to develop these structures so that they can grow to commercial scale.
1 ESCO – Energy Service Company – is a company that provides energy to customers and services to improve efficiency. An ESCO typically sits between the consumer and the utility providers.
France24‘s story by Aziz El Massassi with AFP Correspondent in the Gulf on how Oil-rich Gulf faces prospect of unlivable heat as planet warms unabatedly up. The described scenario is no more open for debate and the likelyhood of what is advanced has great chances to happen. The reasons of climate change are not only rightly founded but insufficient as a justification amongst many others, all because of the extent of the over-built environment that was frenetically developed within the last fifty years.
Oil-rich Gulf faces prospect of unlivable heat as planet warms
Gulf cities such as Dubai are known for their scorching summers, but experts warn climate change could soon make parts of the fossil fuel-rich region unlivable for humans.
Daily temperatures in the coastal metropolis regularly top 40 degrees Celsius (104 degrees Fahrenheit) for several months of the year and are exacerbated by high humidity.
“I work from 9 am until 4 pm in this heat,” Pakistani scooter driver Sameer said, sweat dripping from his forehead.
“Sometimes, the company or people give us water to drink, and we get a break every three hours,” added Sameer, who works for a mobile delivery app and declined to provide his surname.
A new report this month by the UN’s Intergovernmental Panel on Climate Change (IPCC) showed unequivocally that the climate is changing faster than previously feared, and because of human activity.
Even now, Dubai residents often leave for cooler climates during the hottest months, while many who stay spend their time scurrying between air-conditioned locations—or rely on delivery drivers for a panoply of services.
The UAE is also one of the world’s most arid countries, and for the past several years it has used aircraft for cloud seeding to artificially produce rain.
One expert has warned of the risks for the region as climate change progresses.
“In general, the level of heat stress will increase significantly,” said Elfatih Eltahir, a professor of hydrology and climate at the Massachusetts Institute of Technology.
With higher temperatures and humidity towards the end of this century, some parts of the Gulf will experience periods of “heat stress conditions that will be incompatible with human survival”, he warned.
“That will not happen all the time, they will be episodes that would happen once or twice every seven years,” he added.
The combination of heat and relative humidity has the potential to be deadly if the human body is unable to cool off through sweating.
Scientists have calculated that a healthy human adult in the shade with unlimited drinking water will die if so-called “wet-bulb” temperatures (TW) exceed 35C for six hours.
It was long assumed this theoretical threshold would never be crossed, but US researchers reported last year on two locations—one in the United Arab Emirates, another in Pakistan—where the 35C TW barrier was breached more than once, if only fleetingly.
Calls to reduce carbon emissions pose major economic challenges for oil and gas-rich Gulf countries, from OPEC kingpin Saudi Arabia to Oman and Qatar.
UN chief Antonio Guterres has said the IPCC report “must sound a death knell” for coal, oil and gas, and warned that fossil fuels were destroying the planet.
But some Gulf states in recent years have taken up greener rhetoric as they try to improve their environmental credentials and diversify their economies away from oil.
Tanzeed Alam, managing director of Dubai-based Earth Matters Consulting, said there was increasing interest in the environment and the impact of climate change in the UAE.
“But we are yet to see the large, family-owned businesses really taking this issue to the core of their business models,” he told AFP.
“Businesses don’t often understand how they can cope with increased heatwaves, storms, flooding and other physical impacts,” Alam said.
He expressed hope that the UN report would act as a “wake-up call”.
The United Arab Emirates aims to increase its reliance on clean energy to 50 percent by 2050 and reduce its carbon footprint for power generation by 70 percent.
Abu Dhabi, one of seven emirates along with Dubai that make up the country, says it is building the world’s largest single-site solar plant.
Once fully operational, the Al Dhafra solar project will have the capacity to power some 160,000 households nationwide, according to the WAM state news agency. It is scheduled to commence operations in 2022.
In Bahrain, where average summer temperatures range between 35C and 40C, Mohammed Abdelaal’s company Silent Power uses solar technology to cool water tanks.
He said demand had increased in several Gulf countries this summer, noting that the region’s ample supply of sunlight facilitates the production of “clean, sustainable, low-cost energy”.
Bahrain aims for 10 percent renewable energy by 2035, according to state media, while neighbouring Saudi Arabia—with ambitious plans to diversify its oil-reliant economy—in March unveiled a campaign to generate half of its energy from renewables by 2030.
In Kuwait, Khaled Jamal al-Falih expressed concern at what runaway climate change could mean for his country.
“In Kuwait today, a person who needs to run an errand can’t do so until after six o’clock in the evening, and leaving the house means being in an air-conditioned car to go to an air-conditioned place,” he told AFP.
Almost entirely dependent on fossil fuels, the country has a 15 percent renewable energy target by 2030, according to state media.
Falih said his house ran solely on solar power, and urged the government to make “clear decisions” to combat climate change.
The idea of being able to escape the reality of global warming has “become impossible”, Falih said.
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