U.N. Secretary-General Ban Ki-moon arrives in Quito, Ecuador, for the Second World Assembly of Local and Regional Governments and the U.N. Conference on Housing and Sustainable Urban Development. Photo by: Eskinder Debebe / U.N.

The last time the United Nations Human Settlements Program — U.N. Habitat — convened to address the issue of sustainable cities, Detroit, Michigan, was the Silicon Valley of the automotive industry and Shenzhen, China, wasn’t far off from a sleepy coastal fishing town.

Today, 20 years later, the Motor City continues to reel from municipal bankruptcy and Shenzhen is a sprawling megacity of 12 million people that exports roughly 25 million container shipments of industrial goods every year.

Dozens of other examples can illustrate the dramatic growth and expansion that has occurred in cities over the past two decades — changes that, consequently, have given rise to stark economic inequalities, environmental degradation, social injustices and other conditions that are of serious concern to the global development community. For too long, development experts say, cities, particularly in developing countries, have grown in ways that have overlooked basic development needs.  

The efforts needed to address reverse those trends place an unprecedented significance on U.N. Habitat’s seminal conference that kicks off Monday in Quito, Ecuador. An estimated 45,000 people from all levels of government, private business and civil society are expected to attend Habitat III to map out strategies for building and maintaining the sustainable cities of the future.

Only the third such gathering in the agency’s history, Habitat III, which runs from Oct. 17 to 20, is taking place in a radically different context for the world’s cities than the previous two meetings. Unlike in 1996 and 1976, the majority of the world’s citizens now live in urban areas — a threshold that was crossed some time at the end of last decade. An additional 2.5 billion people will move to cities in the next 35 years, according to the World Resources Institute, a think tank in Washington, D.C. Urban areas generate 65-70 percent of global gross domestic product and roughly 70 percent of the world’s greenhouse gas emissions.

“How cities work is critical to economies, the environment and qualities of life,” said Ani Dasgupta, director of the Ross Center for Sustainable Cities at the World Resources Institute.

The role of cities was recognized as well in the 2030 development agenda, with countries committing in Sustainable Development Goal 11 to achieve “sustainable cities and communities.” Because of the growing footprint of cities on virtually every facet of development, the ways that urban areas expand will ultimately underpin global development at large. The challenges for those gathered in Quito will to devise ways to finance and implement urban development strategies through commitments that are clear and measurable.

The gathering and the document

The 45,000 attendees expected at Habitat III have one goal: to lay the groundwork — through partnerships, financing arrangements and accountable commitments — for cities to be the drivers of inclusive economic growth, prosperous livelihoods and sustainable development.

To reign in urban growth and guide the process of sustainable urbanization, the 193 members of the U.N. have turned to a 24-page, 175-paragraph document called the New Urban Agenda. The NUA is a framework document. It is a set of visions and political aspirations in support of sustainable urbanization that U.N. member states spent two years negotiating before ultimately ratifying it in September.

Like any U.N. agreement it is, by design, broad-sweeping and idealistic. U.N. member states agreed to promote an “urban paradigm shift” that will “readdress the way we plan, finance, develop, govern, and manage cities and human settlements.” It contains a kitchen sink of pledges from advancing renewable energy systems, sustainable mobility, gender equality, migrant rights, transparent institutions and resilient infrastructure.

Unlike other U.N. summits such as last year’s international climate change negotiations, the negotiating process is — in principle — over heading into Habitat III. A formal signing ceremony where U.N. member states will officially adopt the NUA will take place on the opening day of the conference. Otherwise, the four days in Quito will be all about establishing the partnerships and implementation plans that will put the NUA agenda action.

The issues

Practically any issue related to sustainable development is referenced in the NUA and will be represented at Habitat III. But among the many issues, financing the NUA, the role of governments in implementing it and the adoption of systems to monitor the NUA’s progress will likely shape the broader discussions in Quito.

Perhaps the most central question is about finance. Unlike for climate change, no global fund currently exists specifically to finance sustainable urbanization. It is up to cities to raise the capital, so there will likely be a lot of discussion on ways that local governments can strengthen municipal finance.

“We need to create conditions to improve the creditworthiness of municipalities to access capital markets,” Sameh Wahba Naguib, a director for urban policy and planning at the World Bank told reporters on a briefing prior to Habitat III. That includes interventions such as improving public management systems or eliminating public graft and corruption. To better help local governments be able to foot the bill, transparent systems for fiscal transfers from provincial or central governments need to be adopted, Naguib said.

The NUA raises specific calls for various forms of blended finance, local infrastructure funds and financial instruments backed by land values that are likely to generate action plans from banks and investors.

Many answers to the financing question can come from smart urban planning, according to U.N. Habitat Executive Director Joan Clos. The way streets and transport systems are designed or how building permits are issued, he said, creates an intrinsic value for cities that, in turn, can generate financial capital.

“Good urban planning generates value. Good urban regulation generates value. And a little bit of investment in basic services generates more private value,” Clos told Devex in an exclusive interview.

The role that different levels of government assume in implementing the NUA will also be a focal point in Quito. The impetus will largely fall on local governments, which was a responsibility that the NUA heavily promoted. However, central governments need to more clearly define those roles through national policies, say participants in the NUA negotiations. Very few countries have formally adopted national urban policies, Clos noted.

“Member states will try to decide if they want to have national urban policies or not,” said Ana Moreno, secretariat coordinator for Habitat III. “However, a national urban policy does not mean countries will have a centralized process. It means you understand your territory and empower local governments.”

Public funding for city budgets in Mexico, for example, is allocated top-down from the central government, said Adriana Lobo, director of WRI Mexico. The added layer of approval can politicize or slow the funding process if disputes arise between political parties or government officials, she said. National policies that establish independent payment transfers to local governments would move the financing process forward, Lobo said.

Unlike the international accord on climate change agreed to in Paris in December 2015, the NUA is not a legally binding document. The issue of accountability, data monitoring and evaluation of action plans will therefore be a crosscutting theme for urban development stakeholders in Quito.

Many of the hundreds of events will feature announcements of new partnerships and commitments to advance the NUA. Those commitments will be broadly modeled after the types of pledges and action plans made popular by the Clinton Global Initiative, said Don Chen, director of equitable development at the Ford Foundation. Devising clear monitoring systems to measure their progress will be a clear milestone at Quito.

“A success would be if countries agree to a regular reporting of metrics,” WRI’s Dasgupta said. “If they don’t measure, they don’t progress.”

What the future holds

Looming over the events and discussions at Habitat III will be important questions about the future of U.N. Habitat itself. The negotiating process to draft the NUA was also intended to be a referendum on the responsibilities of the U.N. agency but the issue was ultimately tabled until the 2017 U.N. General Assembly meetings.

Developing countries broadly supported strengthening Habitat’s mandate to be the principal body overseeing the NUA implementation process. Industrialized countries, meanwhile, pushed back on an expanded role for the agency.

But the debate has raised an important question — does the U.N. need a strong central agency with expertise on urban development? Or can urban development become a core issue that cuts across the mission of all U.N. bodies, similar to climate change and environmental preservation?

Habitat III is looks to be a whirlwind four days high in the Andes. It represents the culmination of a two-year negotiation process over the NUA, but is also a forum to address the issues of rapid urbanization and inclusive urban development that are 20 years in the making. And the substance of the action and implementation plans and their ability to concretely address those issues have the potential to jump start the entire 2030 development agenda.

Devex is reporting from Habitat III in Quito, Ecuador, this week. Follow him @mfbmendoza and keep up with Devex coverage. You can also read more about the #newurbanagenda

About the author

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    Naki B. Mendoza

    Naki is a former reporter, he covered the intersection of business and international development. Prior to Devex he was a Latin America reporter for Energy Intelligence covering corporate investments and political risks in the region’s energy sector. His previous assignments abroad have posted him throughout Europe, South America, and Australia.