Executive Summary

Rapid urbanization in the developing world means more people than ever will be living and working in cities. Given rapid urbanization and economic development trends in developing countries, a predominant challenge will be to enable developing countries to attain a higher standard of living than most currently enjoy and, at the same time, help them avoid depletion and damage to environment assets. Examples of environmental assets are energy resources, agricultural and forested lands, water, air, biodiversity and other natural resources. This report refers to the twin process of economic development and judicious management and protection of environmental assets as "sustainable development." Managing the demand for energy in all sectors, especially in the transport and urban development sector, is critical to achieving the challenge of sustainable development. A focus on the transport and urban development sector is the subject of this report.

The energy, environmental and financial implications of transport and urban development trends in developing countries are profound. The future biggest spenders for transport energy will likely be developing countries. By 2020 developing countries will have spent approximately US$1.62 trillion for oil and natural gas, compared to US$360 billion spent by developed countries, to fuel their rapidly growing motor vehicle population. Infrastructure investments will be another big ticket item. Under a business-as-usual scenario, the World Bank estimates that by 2020 the developing countries will invest approximately US$66 billion per year in additional infrastructure for surface freight and passenger transport. These projected energy and infrastructure expenditures added together constitute an annual mobility market in the developing countries that may be worth US$147 billion per year by 2020.

There is potentially a lucrative opportunity for companies, and an important leadership role for industry associations, that lead the private sector and help direct government away from an historic and nearly exclusive, focus on conventional road and highway technologies and infrastructure to meet mobility and urban development needs. The opportunities are in directing the private sector and government toward innovative combinations of smart growth and conventional technologies and services to meet mobility and urban development needs. Smart growth transport and urban development technologies and services could satisfy some of the world’s demand for transport energy and mobility, thereby creating competition with oil and conventional infrastructure for a share of the estimated annual US$147 billion mobility market in developing countries. Some of the basic factors propelling the market in these countries are capital scarcity, environmental regulations, popular pressure for higher standards of living, and international environmental agreements. The catalyst for a smart growth market in developing countries may be summed up in one word: practicality.

Establishing strong government-business partnerships must be a cornerstone of any strategy to identify new and growing markets, develop and commercialize new technologies and pursue export opportunities. A program of U.S. Government export assistance to the private sector would, at a minimum, do the following: 1) increase industry awareness of smart growth concepts and market potential; 2) increase awareness of smart growth concepts and market potential within relevant U.S. Government agencies; and 3) document economic potential of smart growth exports, energy savings and GHG reduction.

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Prepared by the International Institute for Energy Conservation (IIEC)
September 1999

Support for this document was provided by the Export Council for Energy Efficiency (ECEE) and the US Department of Energy (award DE-FC41-94R110679). This support does not constitute an endorsement by the US Department of Energy of the views expressed in the article.

Updated: 03/29/02