Sustainable urban infrastructure in China

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Paper for 1st Xiamen Forum on Urban Environment – Problems and Solutions of China Xiamen City, Fujian Province, PR China, 28-29 November, 2007 http://www.iue.ac.cn/en/xiamenforum0.asp

Sustainable urban infrastructure in China: Towards a Factor 10 improvement in resource productivity through integrated infrastructure systems

Keywords: sustainable infrastructure, services, systems, innovation, resource productivity, ecological footprint, circular economy.

Dr David Ness Adjunct Senior Research Fellow, Institute for Sustainable Systems and Technologies, University of South Australia, and Office of Major Projects and Infrastructure, South Australian Department for Transport Energy and Infrastructure, Australia Level 12, Roma Mitchell House 136 North Terrace, Adelaide SA 5000, Australia (PO Box 1, Walkerville SA 5081, Australia) Mobile: 61 401 122 651 Phone: 61 8 8463 6236 Fax: 61 8 8463 6229 [email protected] or [email protected]

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SUMMARY This paper emphasizes that more holistic infrastructure systems are of great importance to achieving sustainable development of China and hence of the planet. Whilst rapid urbanization brings the prospect of economic growth and a higher standard of living, it may also involve unsustainable consumption of scarce resources (land, materials, energy and water) accompanied by environmental degradation (such as pollution, emissions and waste). The challenge is to achieve necessary economic growth but with far less resource use and reduced ecological footprint, as recognized by China’s Circular Economy policy. Whilst developed nations should rightly aim for a Factor 10 improvement in resource productivity, Factor 4 is often seen as a more appropriate target for developing countries - a fourfold increase. This involves doubling wealth and, on the other hand, halving resource use to return to an ecological balance. Arguably, even greater resource productivity is required. China’s economy will need to achieve at least a seven-fold increase in efficiency of resource use to achieve the goal of “the all-round well-being society” set for 2050, although some have argued that a ten-fold increase (90 per cent improvement) will be required. The paper highlights the significant contribution of transport, energy, water and built infrastructure to resource consumption, greenhouse emissions and the ecological footprint. It examines ways that China can move towards a Factor 10 improvement in resource productivity. These involve viewing infrastructure as ‘a system to facilitate the delivery of services’ to support social and economic development in an integrated, eco or resource efficient, cost-effective and socially inclusive manner, coupled with extending the principles of a ‘product service system’ more widely to the ‘infrastructure service system’. It is argued that a revolution in thought and action is required to achieve the necessary paradigm shift in China, with the west leading by example.

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1. INTRODUCTION The challenge in China and other developing countries is to provide more services to enable economic growth, but with less resource use, less environmental impact and less cost. The magnitude of the challenge is firstly portrayed, using measures such as ecological footprint and greenhouse emissions, whilst introducing the Factor 4 or 10 concept. Building upon previous papers for the UN, the paper then seeks to respond to the challenge by introducing some novel concepts concerning urban infrastructure, viewing this as a system to support the delivery of services. Hitherto, infrastructure has been largely seen as hard physical structure. Taking a systems view opens up opportunities to consider elements of infrastructure in a more holistic manner, with greater connectivity between the elements enabling more to be achieved with less. In addition, principles of resource or eco-efficiency, as reflected by product service systems, are extended to ‘infrastructure service systems’. More efficient patterns of multi-use and integrated infrastructure are examined, including means of delivering services that reduce the need for ‘hard’ resource consuming and capital intensive infrastructure and involve its more intensive utilization. New economic drivers are also considered, as are means of measuring the resource consumption and environmental impact of infrastructure in relation to services delivered. Some Australian and other examples of integrated and efficient infrastructure are then described, with the possibility for their translation to developing country contexts being examined. The paper highlighting areas for further research, and concludes by stressing that no less than a revolution in thought and action is required to respond to the huge challenge.

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2. THE CHALLENGE: ENABLING CHINA’S GROWTH WITH REDUCED ECOLOGICAL FOOTPRINT The ecological footprint represents the amount of biologically productive land and water a population requires for the resources it consumes and to absorb its waste, using prevailing technology (see Wackernagel and Rees 1996). Resources include land, materials, energy and water. Due to its large population and rapidly increasing levels of consumption, the Asia and Pacific region is a significant contributor to the global footprint. If this region, with more than half the world’s population, can achieve the right balance between natural resource consumption and production, it can significantly halt the environmental degradation of the planet. The region’s total ecological footprint almost trebled between 1961 to 2001, as shown in Figure 1. Energy (and emissions) due to fossil fuels comprises the greatest proportion of this increasing footprint. As reinforced by an ESCAP report (2005), the region is already living beyond its environmental carrying capacity and is in ‘overshoot’. The world average ecological footprint is 2.2 global hectares per person, 20 per cent more than what is available on the planet.

Figure 1. Asia Pacific’s Ecological Footprint (source: WWF 2005) China has a relatively low footprint at present of around 1.6 (but increasing fast) when compared with many western countries with footprints of around 5-7 (see WWF 2006). However, China has moved from using, in net terms, about 0.8 times its domestic biocapacity in 1961 to twice its own biocapacity in 2002. If its booming population growth follows the extravagant resource consuming pattern of the west, both China and the planet will be unable to cope with the pressure on resources. This has already been recognized by the introduction of the Circular Economy (CE) Policy. As reported by UNEP (2003), “China has the need and potential to quadruple its economic growth over the next decades in a sustainable way” - an ambitious development target intended to raise the

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majority of the country’s population into “the all-round well-being society”. This means that by 2050 a larger population of 1.8 billion would reach a per capita GDP of US$ 4000 per year, five times the current level. Some estimate that this increase could occur within the next 30 years, demanding a tremendous increase in production and multiplying pressure on natural resources and the environment (see Lowe 2006). China’s economy will need to achieve at least a seven-fold increase in efficiency of resource use to achieve the goals set for 2050, although some have argued that a ten-fold increase will be required (CCICED 2003). Developing countries need to go through a process of economic growth to reach a similar standard of living of developed countries, with an increase in natural resources demand to be expected (Manzini and Vezzoli 2002). Factors 4 and 10 are eco-efficiency targets for world economies at large (WBCSD 2000). Whilst developed nations should rightly aim for a Factor 10 improvement and lead by example, Factor 4 has been seen as the more appropriate target for developing countries - meaning that ‘resource productivity’ can – and should – grow fourfold. Factor 4 involves doubling wealth to solve the problems of poverty and, on the other hand, halving resource use to return to an ecological balance (von Weizsacher et al. 1998). This concept has much in common with ‘Green Growth’ (ESCAP 2006) and, indeed, to achievement of the Millennium Development Goals (MDGs). However, Newton (2007) warned that Factor 4 is likely to fall short of delivering the outcomes needed for sustainable urban development, noting that this poses significant challenges for urban planning. Redevelopment and expansion of established built up areas, such as China’s many fast growing cities of around 500 000 population, represents more of a challenge than innovation in greenfield settings such as Dongtan. Striving for a Factor 10 improvement, rather than just Factor 4, may present an opportunity for China to not only avoid and to ‘leap-frog’ the mistakes made by western countries, but also to achieve massive productivity improvements and economic benefits. As noted by the Living Planet Report (WWF 2006:21), “the amount of resources used in the production of goods and services can be significantly reduced”. Whilst the WBCSD and others have paid attention to improving resource

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efficiency within industry, far greater gains may be expected if similar principles are applied to infrastructure, a very large contributor to the ecological footprint, emissions and waste. This is highlighted in the following section.

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3. THE SIGNIFICANCE OF INFRASTRUCTURE Arguably, transport, energy, water and other infrastructure offers the greatest opportunity for moving towards a Factor 10 shift in resource productivity and associated reductions in ecological footprint. The area used for infrastructure, including hydropower, housing and transportation, is included as the “built up land” component in Figure 1. However, this is just the land occupied by infrastructure. The footprint due to infrastructure is far greater, and relates to much of the energy/emissions component in the diagram e.g. energy associated with construction and operation of transport and building infrastructure. The total contribution of infrastructure systems, including all the structural and operational elements that contribute to delivery of transport, energy and water services, is likely to be well over 50 per cent of greenhouse emissions (Ness 2007b). Its importance in achieving global targets (e.g. emissions reductions) appears to have been greatly underestimated. In fact, it may be one of the greatest contributors, especially when taken over the life of the infrastructure - that locks in consumption patterns for decades to come (ESCAP 2006:18). Operational energy and emissions receive most attention, but Pullen (2006) has shown that 30 per cent of the energy/emissions in an urban residential area can be related to construction. Given the massive resource and energy consumption associated with infrastructure, there are opportunities to achieve significant savings in energy and emissions through more eco-efficient infrastructure patterns, greatly reducing the region’s ecological footprint. Some of these opportunities, especially for ‘scaling up’ thinking that has been previously applied in the industrial product field, are examined in the following sections.

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4. CHINA’S CIRCULAR ECONOMY POLICY The western or Fordist ‘production-consumption model’ is based on growth and throughput. Increase of productivity only becomes possible by using more fixed capital and consuming growing quantities of matter and energy (Altvater 1993). This model reveals a linear material flow: resource extraction, production, consumption and waste. China, on the other hand, coined the notion of the Circular Economy (CE) to represent a new economic growth model that operates in the way of resource extraction, production, consumption and regenerated resources. By organising economic activities in a closed-loop of materials, the CE policy promotes harmony between the economic system and the ecosystem (CCICED 2003). This is consistent with the notion of a “cyclical restorative economy” (Hawken 1993) and the global 3R Initiative (reduce, reuse and recycle). Thus, improving resource efficiency is an important element of the CE1 and of a pilot study to develop and implement the policy within the City of Guiyang (Kuhndt et al. 2007). As another aspect of implementing its CE policy, China’s State Council issued a circular on Organising Resources-saving Activities (Guo 2004). This promotes new types of industrialisation, including “product and service design to promote reduce, reuse and recycling of materials” and “sustainable product and service design”. In this regard, Stahel (1982) developed a conceptual and methodological framework of great value to planning and implementing a more CE in China, based on product-life extension, the service or functional economy, and the notion of products as service carriers. Lowe (2006) saw this approach as offering a “systems framework” for gaining the multi-factor improvements required by the CE. This will be explored further in the following sections.

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The subject of research by the China Research Centre for Economic Transition

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5. RESOURCE OR ECO-EFFICIENCY 5.1 Principles To deal with the rapid urbanisation in the developing world, aspiring to a standard of living comparable to the developed world, “we can expect that eco-efficiency will become the leading economic principle for the 21st century” (Van Halen et al. 2005:18). Eco-efficiency is primarily a business concept, concerned with three broad objectives: reducing the consumption of resources; reducing the impact on nature (including emissions and waste); and increasing product or service value, focusing on selling the functional needs that customers want – with fewer materials and less resources. However, as Kanda et al. (2006:21) pointed out, “increased efficiency does not reduce environmental loads when total activities increase”. In this regard, the principle of ‘sufficiency’ - involving reduced consumption – is most important. In addition, as noted by the WBCSD (2000:13), “eco-efficiency is not sufficient by itself because it integrates only two of sustainability’s three elements, economy and ecology, while leaving the third, social progress, outside its embrace”. This is a most important point when considering eco-efficiency as a means towards sustainable infrastructure. The Wuppertal Institute, though, sees resource efficiency as involving reduced use of land, materials water and energy, while at the same time leading to increased economic and social wellbeing: “Resource efficiency is…closely related to economic and social dimensions of sustainability” (GTZ/CSCP/Wuppertal 2006:3). Thus, in this paper, the term resource efficiency is favoured over ecoefficiency. 5.2 Resource efficient infrastructure The key concept behind resource efficient infrastructure is to maximize service delivery, whilst minimizing resource use and environmental impact. Hence, as discussed at a recent UN Meeting on Sustainable Infrastructure (Ness 2007b),

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A sustainable infrastructure system is one that facilitates the delivery of transport, energy, water and other services to support social and economic development in an integrated, resource-efficient and socially inclusive manner. Following this line of thought, a resource efficient transport system is one that enhances mobility of people and freight so as to support quality of life and reduce resource use and pollution. Delivering services with efficient and closely aligned infrastructure is also likely to be cost-effective. 5.3 Strategic asset management The key concepts involve achieving a close or ‘lean’ fit between infrastructure and the service provided and gaining the most service out of a given piece of physical infrastructure, whether it is a building, a road, or pipeline, such as by shared or multiple use or increased utilization. This is a fundamental principle of strategic asset management2 (SAM), where physical assets (whether manufactured products, buildings or wider infrastructure) are seen, not as ends in themselves, but as components in a system to facilitate the delivery of services. Being strategic requires a focus on the outcome or purpose of an asset, whether the needs can be met by another means, and whether they should be provided at all (University of NSW 2007). SAM includes key decisions concerning procurement of new assets, reuse or refurbishment of existing, and sale/disposal. To date, it has not been widely recognized that strategic asset management is an important element of sustainability. It may not only deliver improved services, but also with reduced physical assets. Better management or stewardship of a stock of assets over their life, with consideration to their reuse or adaptation, can also lead to greater resource efficiency and cost-effectiveness. This is in keeping with the notion of the CE, described earlier

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A very useful resource concerning Strategic Asset Management is www.amqi.com

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6. INFRASTRUCTURE: A SYSTEM TO DELIVER SERVICES It is important that physical infrastructure is seen, not as an end in itself, but as part of a system related to the provision of services that are essential for growth and poverty alleviation. Infrastructures can be viewed as systems that facilitate the delivery of services (see Howes and Robinson 2005), making use of resources such as energy, water, materials and land, and having interactions with the surrounding environment, as in generating waste and emissions. This reflects Ayers’ view of products (in this case infrastructure) as ‘service carriers’ (Ayers 1999). The system includes the hard, physical infrastructure and the operations of this infrastructure, which together provide the services. For example, an access or mobility system may have the overall purpose of access or journeys, with the performance measure being the number of passengers transported per day. This leads to a decision-making process that responds to the assessment. The system components or sub-systems may include the road or other public transport ‘hard’ infrastructure, together with vehicles (personal and public transport), fuel, refueling stations, congestion taxes and the like. There may be connections between the components and different modes of transport, such as transport interchanges. Finally, the transport system will have a boundary between the system and the outside environment. These reflect the elements of a theoretical system, as described by Checkland (1981). A good, healthy system will also have a degree of tension between the elements (Metcalfe pers comm. 2007). Thus, transport, energy and water may all be seen as parts of a larger system, the urban infrastructure system. In turn, this may be seen as part of a service system. Russell Ackoff, a leader in systems thinking, saw subsystems functioning in service of the next level system. In other words, he advocated holistic approaches and looking beyond the boundaries of a particular system, to open up opportunities for efficiencies and innovation (Ackoff 2004). Thus, various subsystems may include water, transport, energy infrastructure. But ‘zooming out’ and looking beyond individual infrastructure

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to a wider urban infrastructure system opens up opportunities for innovation, integration and consequently resource efficiencies. As Acharya (2007) said in relation to urban transport: A system-based approach may be useful in understanding the complex dynamics of an urban transport system and thereby may identify strategies and effective policy levers that can lead the overall system towards a more eco-efficient path. This wider, holistic and system based view is at the core of thinking regarding the ‘system innovations’ that will be necessary to achieve Factor 4/10 improvements in resource efficiency. The Stockholm Environment Institute (2007) has also called for a ‘systemic approach’, saying: Urban environmental problems involve complex webs of interconnected and changing problems, which cannot be addressed in isolation. Urban strategies must recognize these interconnections…In most cities, this requires a fundamental shift in approach, greater intersectoral cooperation, and more forward-looking strategies. Similarly, the WWF (2006:27) has noted that: Systems thinking …helps to identify synergies and ensure that proposed solutions bring about overall footprint reductions, rather than shifting demand from one eco-system to another. According to a recent report evaluating World Bank transport projects, transport strategies must now focus more attention on cross-cutting issues such as traffic congestion, environmental damages, efficiency, safety and affordability: “This focus will necessitate more innovative, multisectoral approaches” (Independent Evaluation Group 2007). In this regard, relationships can be established between the transport system, the water management system, the energy system and the like. For example, Newton has highlighted the interdependence between water and energy, with desalination, wastewater treatment and recycling all requiring significant inputs of energy (cited in Henderson 2007). The OECD (2007:15) has also highlighted how various infrastructure systems – including land transport, electricity and water – have for many years shown signs of increasing convergence: The various systems interact ever more closely with one another and engender all kinds of synergies, substitution effects and complementarities…policy makers need to take a holistic approach to infrastructure development. Taking a wider systems approach, therefore, can lead to synergies, major innovations, and a better use

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of resources that we expend in infrastructure. Any gains from insular thinking (e.g. viewing highways as just road corridors rather than serving multiple functions – as discussed in section 6) are likely to be restricted to that component of the transport system. On the other hand, ‘zooming out’ to the next level system as advocated by Ackoff (2004), thus taking a wider and more holistic view, is likely to open up opportunities for efficiencies through connections (see Figure 2).

Figure 2. A sustainable infrastructure system (source: own) Most importantly, ‘systems thinking’ enables us to focus on the purpose or required service (e.g. socially inclusive urban environments) and how all the elements of the system may work together towards achieving this end.

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7. EXTENDING THE CONCEPT OF PRODUCT SERVICE SYSTEMS 7.1 Product service systems (PSS) The concept and methodology of “product service system innovation” has been well documented by Van Halen et al. (2005), and is being applied in the products field in the European Union, Japan (Stoughton et al. 2007) and elsewhere, with applications including lighting, chemical, floor covering and other services. Lowe (2006) has introduced the concept to China. There are now opportunities to extend and ‘scale up’ this thinking to infrastructure, with infrastructure being viewed as a product service system (PSS) in the broadest sense. PSS aims at “a cultural change from product oriented to service oriented consumer patterns” - a move from a supply driven to a demand driven economy, as “too many customers’ needs today are met in a material and energy intensive way” (Van Halen et al. 2005:2). PSS calls for businesses “to achieve more value for their clients, at lower production costs and preferably lower energy and/or materials inputs and with reduced emissions (thus contributing to eco-efficiency)” (Van Halen et al. 2005:18-22). Previous research by the University of South Australia, based upon Interface modular carpets, indicated that service systems may enable resource consumption to be decoupled from growth and hence constitute an important part of China’s CE, towards Factor 10 (Ness and Pullen 2006). The University of South Australia and the SA Government are currently developing a joint research proposal with Hewlett Packard (HP) to develop and extend its ‘service solution’ for business equipment (including computers) to a range of other products and services. HP is able to manage a fleet or stock of computer assets so that they all perform more efficiently, with increased utilization, reduced numbers of machines, lower energy and lower footprint - demonstrating the strategic asset management principles described earlier. The following section begins to examine how such innovative approaches may be escalated from products to wider infrastructure, to have maximum impact.

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7.2 ‘Infrastructure service systems’ (ISS) PSS can be categorized as various types, including ‘use-oriented services’ (e.g. rental) and ‘resultoriented services’. Car-sharing is an example of the former, with considerable implications for transport infrastructure. As described by Stoughton et al. 2007), Car sharing is a ‘personal mobility PSS’ that provides short-term use of cars located in special reserved parking spaces distributed throughout an urban area. Compared to traditional car rental, car-sharing is characterized by short rental periods, decentralized location of vehicles, and fee structures that combine membership and time-based usage fees. In this PSS, the product is the vehicle and service is the mobility provided by the vehicle, as well as the insurance and maintenance included in the fee. Such services intensify the use of cars, meaning a lower number of cars are needed in a given context for a given demand of mobility. It has been estimated that every shared car on the road replaces 5-6 privately owned cars, whilst being cheaper than purchasing a private car for those who travel less than 12 000 km per year by car. In addition, there is a corresponding reduction in parking space and the use of land (Manzini and Vezzoli 2002; Salon et al. 1998). Such a mobility service, involving vehicles, can be even more effective when seen as part of a wider mobility service integrated with public transport, as illustrated in Figure 3. For example, AutoShare (Toronto, Canada) is involved with a joint promotion scheme with the Transport Authority, where people who buy annual metro-passes from the authority are given a substantial discount on their subscription to AutoShare (Manzini and Vezzoni 2002) – demonstrating connectivity and integration between the components of a transport or mobility system.

Figure 3. New Mobility System (source: Salon et al. 1998) Result-oriented services, on the other hand, focus on providing customers with a specific result or function rather than a specific product. In this area we find waste management services, energy services and the like. In relation to energy services, the Asia Pacific Ecological Footprint report (WWF

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2005:14) highlighted areas for transformation to sustainability, including a “unique opportunity for a shift to sustainable energy”. A key factor was “switching the sectoral focus from energy supply to provision of energy services” (italics added), which would provide affordable energy services and “unlock huge efficiency potential across the region”. It was noted that Japan’s economy was already three times as energy efficient as the US and almost eight times as efficient as China. Steps have already been taken to introduce result-oriented PSS approaches to utilities, as described by Mont (2001). Utility industries provide electricity, heating, cooling and water through infrastructure to society. The functionality approach comprises activities that are aimed at reducing overall energy or water consumption, providing an opportunity to achieve cost effectiveness for both utilities and customers. As Mont (2001:63) pointed out, “the profit centre is not in the amount of electricity sold, but in the provision of a constant input of products and in the reduction of this flow. So the customer pays for efficiency”. Mont also suggested that the profit centre could be shifted towards the function provided e.g. “keeping temperature in the house to 20 degrees during the day”. The service provider then has an incentive to widen the scope of the service to check whether the building design includes insulation (as shown in Figure 4).

Figure 4. PSS model for utilities (source: Mont 2001:63) Rogers (2007) of Duke Energy, US, introduced an innovative ‘Save a Watt’ proposal, an evolution of demand side management. This would reward utilities for the kilowatts they save customers by improving their energy efficiency rather than rewarding them for the kilowatts they sell customers by building more power plants: “The most environmentally sound, inexpensive and reliable power plant is the one we don’t have to build because we’ve helped our customers save energy” (Rogers 2007). The utility would be “incentivized” to ensure homes were more energy efficient, deriving its earnings from the actual watts it saves. Customers would pay more for each watt but their bill would be less because they would use less electricity. As Burns (pers comm. 2007) has observed, this concept could

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be applied to water and other utility services. In the transport sector, ‘third party logistics’ (3PL) optimizes the customers’ utilization of hard infrastructure. Reducing vehicle-km traveled is a major source of efficiency gains and this will tend to reduce resource consumption and emissions – as reflected by Japan policies promoting 3PL (Stoughton pers comm. 2007). Stoughton (2007) highlighted a set of performance based services business models in which the profits of the service provider derive from improving the operational resource efficiency of infrastructure. These include Energy Services Companies (ESCOs3) that are often third party utility providers rather than utilities – a key distinction from the ‘Save a Watt’ approach described above. ESCOs supply energy efficiency services, making their profits via the reductions in energy consumption they are able to obtain for their customers; that is, more profit from less resource use to deliver a required service. Similar performance-based services exist in the areas of water efficiency and waste management. In the Japanese context, Stoughton et al. (2007) found that, as a class, these business models had high potential to increase eco-efficiency of key economic activities at the national economy level; as businesses, these models exhibit strong similarities in value proposition, drivers and barriers, suggesting the need for an integrated policy approach to fully exploit their eco-potential. Research currently in progress for US Environment Protection Agency is evaluating, in part, whether these findings also hold true for the US economy (Stoughton pers comm. 2007). Introduction of such services can assure that a given piece of infrastructure provides its services (or is utilised) in the most resource efficient manner possible. Possibly, this concept could be encapsulated in a new term such as ‘infrastructure service system’ (ISS). 7.3 Public private partnerships In a wider sense, governments are turning to service providers to manage water, energy and transport infrastructure. In addition, we have witnessed the growth of public private partnerships and build-own3

For a more detailed description of the ESCO business model, see http://www.naesco.org/about/esco.htm

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operate (and transfer) schemes where private sector service providers are engaged to construct as well as manage infrastructure. Hitherto, the link has not been made between such schemes and PSS. On a macro level, therefore, PSS innovation strategies can pave the way towards a more sustainable society, contributing to decoupling economic growth from resource use and to minimizing the use of land, materials, energy and water, enhancing recyclability and product durability, and/or closing material loops (Van Halen et al. 2005:38).

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8. MEASUREMENT AND INDICATORS As mentioned above, an important element of a system is a means of assessing performance. This is especially so when assessing resource efficiency. The most efficient system will be that which delivers the most services (e.g. in terms of passengers moved per day) with the least resource use, least environmental impact and least cost. The concept of Material Input Per Service unit (MIPS or MI/S) was developed by Schmidt-Bleek (1992) and has a strong relationship to Factor 4 and Factor 10. The reciprocal of MIPS (i.e. S/MI) is known as resource productivity. The MIPs concept can be applied to measuring resource efficiency at a product or company, as has been mainly the case till now, or can even be applied more widely - such as at a regional level and infrastructure. It is a very useful indicator to accompany assessments of the relative resource efficiency of various patterns of infrastructure development. It is also claimed that MIPS “helps to show up the positive as well as financial potential of resource-conserving schemes” (Ritthoff et al. 2002:9). Whilst the focus of MIPS is upon material input, this eventually becomes an output in terms of waste and emissions. Thus, “by measuring the input, we can arrive at an estimation of the environmental impact potential” (Ritthoff et al. 2002:10).

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9. SOME EXAMPLES AND OPPORTUNITIES: MORE EFFICIENT INFRASTRUCTURE 9.1 Australian examples The circumstances of Australian cities are very different from those in China. The problem is largely on of dealing with declining rates of population growth and of replacement of ageing infrastructure. Nevertheless, some principles being explored and applied in Australia may have applications to China. Some of these are outlined in the following sections. a) More efficient land use patterns The Strategic Infrastructure Plan for South Australia (OMPI 2005) outlines opportunities for better use of public assets, stating that “the shared use of better located facilities will help to improve the efficiency and effectiveness of a wide range of services”. To this could be added “improved resource efficiency”. The Plan, which encompasses transport, energy, water, health, education, recreation and other infrastructure, highlights opportunities that may arise from more collaborative approaches such as shared use to improve the efficiency and effectiveness of a wide range of services. In pursuit of these objectives, the South Australian Government is undertaking strategic assessments of various geographic areas, focusing upon infrastructure and government property holdings/built assets, with a view to more efficient use of government assets, land use patterns and locational benefits. Various properties are being examined to ensure that they may all work together towards achieving service outcomes in those areas. Spare capacity is being considered for sharing with other agencies, and surplus assets converted into higher performing uses or divested. The principles of sharing and co-location are fundamental, reducing the need for infrastructure and achieving more with less resource use and less cost. For example, co-location of a new secondary school with a state sports park enables gymnasium and other facilities to be shared and used more intensively; clustering child health services with schools may achieve better health and education

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outcomes; or land not being used by one government agency may be transferred and used more effectively by another. Most of all, this South Australia work demonstrates the benefits and efficiencies of taking a holistic approach to strategic assessment and planning of such urban areas; not only integration and collaboration between various government agencies, but between various government services (e.g. education, health) and their property holdings, land-use patterns and density, transport, walkways and cycle-ways, open space and linear parks, flood-prone areas and the like. A wider systems approach has opened up opportunities for innovation and efficiencies. b) Transit-oriented development There are examples of transit-oriented development (TOD), including Joondalup in Western Australia, and South Australia is pursuing this strategy to accommodate population growth within existing urban boundaries. This involves more compact, higher density and consolidated urban development, clustered around transport interchanges, electrified and light rail systems, linked to a range of colocated and integrated government services. Such forms of urban development and infrastructure are seen to have resource efficiency, social and economic benefits, but the supposition is yet to be fully tested. c) Multi-use transport corridors Taking a wider, systems approach, transport corridors may be integrated with other infrastructure such as energy, water, recreation and with housing, as in TODs discussed above and illustrated in Figure 5. In this regard, the University of South Australia is conducting research (see Beecham 2003) - under the theme of ‘water sensitive urban design’ - on the use of roads for rainwater harvesting and reuse, with permeable pavements designed to enhance water quality treatment and integrated rainwater storage beneath the pavement surface. Following this multi-use theme, noise barriers along highways could double as solar collectors, with direct heating of neighbouring building – all demonstrating wider systems thinking, ‘interconnectedness’ and, again, resource efficiency.

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Figure 5. Integrated transport, energy, water, recreation and housing corridor (based on Beecham 2003) 9.2 Decentralized versus centralized infrastructure systems Developed countries are accustomed to considering infrastructure in terms of massive central power plants, sewage treatment and water filtration plants and multi-lane highways. But the opportunity cost of large capital investment may be better allocated to smaller distributed systems at the local community level (see Ness 2007a). This approach seems especially relevant for developing countries and presents an opportunity for involvement of the urban poor, both in the development and management of such systems and in their use. It may be more cost and eco-efficient to generate power, provide water supply, and deal with ‘waste’ close to the community they serve. The vision has been expressed well by UNEP (2001:1-2): In some communities, large distribution grids and remote treatment and generation facilities are giving way to a network of distributed or ‘on-site’ management systems, with shared elements integrated into the fabric of the built environment. More diverse land use and building types can complement these on-site infrastructure systems, creating self-reliant, mixed developments…In these communities, each new housing development is seen simultaneously as a centre of employment, communications and food production, as well as a facility for power generation, water treatment, stormwater management and waste management. Importantly, local production of energy, food and water (through harvesting and reuse) will obviate the need for extensive infrastructure networks, including pipes, wires and large plant. Local production may feed into existing networks, rather than being a drain upon them.

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10. REQUIRED RESEARCH Knowledge within the field of sustainable and resource efficient infrastructure is in its infancy and warrants a much increased and coordinated research effort, involving collaboration between universities and governments within the developed and developing world. Schiller (2007) is one of the few to have assessed resource efficiency of urban infrastructure. This was primarily related to roads and utilities associated with housing and he questioned whether his model could be applied to other areas. Schiller noted “a strong correlation between material consumption and building density” and concluded that the parameter ‘cost efficiency’ is an argument for more dense and less resource-intensive settlement structures. According to Newton (2007:6), a transition to higher levels of residential density within cities is seen as a means of achieving a number of key environmental objectives eg “medium density housing has approximately two thirds the material intensity of detached single family housing”. Newton acknowledges that more compact styles of development are the subject of debate in respect of the perceived benefits in areas other than resource consumption – namely neighbourhood character and amenity (although he does not mention affordability). Wallbaum and Buerkin (2003) have noted that resource efficiency is only one important path towards sustainability. In the broader context of sustainable development there are also economic targets, environmental targets and social targets. In this regard, the University of South Australia is currently developing a major research proposal based on ‘integrated sustainability assessment’, with research strands associated with the environmental/resource efficiency, social and economic dimensions of more compact forms of urban development and TODs. Synergies, tensions and tradeoffs between the three aspects of sustainability will be explored. Thus, there appear to be gaps in the literature in relation to: the resource efficiency of urban infrastructure, its measurement and the relationship of resource efficiency measures/indicators to

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social and economic indicators.

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12. CLOSING COMMENTS Infrastructure systems are central to economic and social development, as they support economic growth and deliver services to communities, and are also critical determinants of environmental impacts as they lock in consumption patterns for decades to come. The key message from this paper is that viewing infrastructure as a system to deliver services (‘infrastructure service systems’), applying systems thinking, and extending the concept of product service systems, opens up many opportunities for integration and innovation, leading to much increased resource or eco-efficiency. The approach may also enable China to embrace the challenge of moving towards a Factor 10 improvement. In addition, the sustainable ‘infrastructure service systems’ outlined may address not only environmental sustainability but also social inclusiveness, access to services (e.g. potable water, transport and electricity), affordability, poverty alleviation and maximizing long-run economic growth for the benefits of all (Green Growth). A most important element of the paper has been the use of systems theory, to enable a wider more holistic viewpoint and better integration between individual infrastructure systems such as transport, land use, water harvesting and reuse, energy and the like. Perhaps this may be encapsulated in another new term such as ‘interstructure’. To achieve the necessary paradigm shift, what is required is “a real revolution that doesn’t involve just incremental improvements, but actually transformational exponential improvements. Without that, we’re never going to catch this monster truck of a global economy which, in energy terms, is growing exponentially” (Friedman cited by ABC 2007). The west needs to lead by example, dramatically reducing its own ecological footprint and emissions, and support developing countries such as China in responding to the massive challenges they face. ACKNOWLEDGEMENTS The author wishes to acknowledge the kind assistance and comments provided by the following: Dr

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Penny Burns, infrastructure economist; Associate Professor Mike Metcalfe, School of Management (Systems Management), University of South Australia, in relation to systems theory; and Dr Mark Stoughton, Senior Associate, Cadmus Group Inc, in relation to the ‘service’ approach.

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