Will Shale Gas Give a Second Burst to US Manufacturing?

In order to prepare for the topic this week, I have included some information of the current gas energy outlook, discussed very briefly on technologies then provided views from both proponents and opponents of the shale gas development activities. I ended with some of the questions and hope the bloggers will answer/comment to address the shale gas challenges.

 Energy Outlook

The Annual Energy Outlook 2012 (Ref. 1) published by DOE reported a modest growth in demand for energy over the next 25 years and increased domestic crude oil and natural gas production, largely driven by rising production from tight oil and shale resources. As a result, U.S. reliance on imported oil is reduced; domestic production of natural gas exceeds consumption, allowing for net exports; a growing share of U.S. electric power generation is met with natural gas and renewables; and energy-related carbon dioxide emissions remain below their 2005 level from 2010 to 2035, even in the absence of new Federal policies designed to mitigate greenhouse gas (GHG) emissions.

Shale gas production increases from 5.0 trillion cubic feet per year in 2010 (23 percent of total U.S. dry gas production) to 13.6 trillion cubic feet per year in 2035 (49 percent of total U.S. dry gas production).

Shale Gas Technology

Shale gas is a natural gas produced from shale. It is part of what is described as ‘unconventional gas’ (versus ‘conventional gas’ as gas sourced from discrete fields or pools localized in structural stratigraphical traps by the boundary of gas and water) and is obtained from low permeability reservoir in coal, tight sands formation, and shale. The accumulations of gas tend to be diffuse and spread over large geographical areas. As a result, it is much more difficult to extract (Refs. 2, 3). The shale gas production has accelerated due to advances in horizontal drilling and hydraulic fracturing technologies.

How it works: Wells are drilled vertically to intersect the shale formations at depths that typically range from 6,000 to more than 14,000 feet. Above the target depth the well is deviated to achieve a horizontal wellbore within the shale formation, which can be hundreds of feet thick. Wells may be oriented in a direction that is designed to maximize the number of natural fractures present in the shale intersected. These natural fractures can provide pathways for the gas that is present in the rock matrix to flow into the wellbore. Horizontal wellbore sections of 5,000 feet or more may be drilled and lined with metal casing before the well is ready to be hydraulically fractured.

Hydraulic fracturing (Fracking): Beginning at the toe of the long horizontal section of the well, segments of the wellbore are isolated, the casing is perforated, and water is pumped under high pressure (thousands of pounds per square inch) through the perforations, cracking the shale and creating one or more fractures that extend out into the surrounding rock. These fractures continue to propagate, for hundreds of feet or more, until the pumping ceases. Sand carried along in the water props open the fracture after pumping stops and the pressure is relieved. The propped fracture is only a fraction of an inch wide, held open by these sand grains. Each of these fracturing stages can involve as much as 10,000 barrels (420,000 gallons) of water with a pound per gallon of sand. Shale wells have as many as 25 fracture stages, meaning that more than 10 million gallons of water may be pumped into a single well during the completion process. A portion of this water is flowed back immediately when the fracturing process is completed, and is reused. Additional volumes return over time as the well is produced.

Jobs and US Manufacturing

After years of high, volatile natural gas prices, the new economics of shale gas are a “game changer,” creating a competitive advantage for U.S. petrochemical manufacturers, leading to greater U.S. investment and industry growth. America’s chemical companies use ethane, a natural gas liquid derived from shale gas, as a feedstock in numerous applications. Its relatively low price gives U.S. manufacturers an advantage over many competitors around the world that rely on naphtha, a more expensive, oil-based feedstock. Growth in domestic shale gas production is helping to reduce U.S. natural gas prices and create a more stable supply of natural gas and ethane.

The American Chemistry Council (ACC)’s new report (Ref. 4), Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs and US Manufacturing, claimed an opportunity for shale gas to strengthen U.S. manufacturing, boost economic output and create jobs. The ACC report analyzed the impact of a hypothetical, but realistic 25 percent increase in ethane supply on growth in the petrochemical sector. It found that the increase would generate:

. 17,000 new knowledge-intensive, high-paying jobs in the U.S. chemical industry

. 395,000 additional jobs outside the chemical industry (165,000 jobs in other industries that are related to the increase in U.S. chemical production and 230,000 jobs from new capital investment by the chemical industry)

. $4.4 billion more in federal, state, and local tax revenue, annually ($43.9 billion over 10 years)

. A $32.8 billion increase in U.S. chemical production

. $16.2 billion in capital investment by the chemical industry to build new petrochemical and derivatives capacity

. $132.4 billion in U.S. economic output ($83.4 billion related to increased chemical production (including additional supplier and induced impacts) plus $49.0 billion related to capital investment by the U.S. chemical industry)

Another report published by PricewaterhouseCoopers, LLP in Dec 2011 (Ref. 5) shared similar views:

. Energy affordability: Lower feedstock and energy costs could help US manufacturers reduce natural gas expense by as much as $11.6 billion annually through 2025

. Demand growth: In 2011, 17 chemical, metal, and industrial manufacturers commented in SEC filings that shale gas development drove demand for their products, compared to none in 2008.

. More jobs: US manufacturing companies could employ approximately one million more workers by 2025 due to the benefits from energy and demand for products used to extract the gas.

Inhibitors or Barriers

However, there has been a growing perception that the shale gas production has polluted the air and consumed too much land and water, and the hydraulic fracturing is a significant threat to drinking water (Ref 3). According to a report from the Chatham House (Ref. 6) two factors could threaten continuing and expanding shale gas production in the United States. The first is the current low domestic gas price, which means that the economics of all gas operations are looking very weak; a fact reflected in the collapse in the rig count, which measures the number of rigs being used for drilling gas wells. In May 2012, this was down over 30% on an annual basis. However, history suggests such low prices will not continue.

The second threat to shale gas operations in the United States is growing concern about the negative environmental consequences of fracking, expressed in growing opposition from local communities and NGOs. The 2005 Energy Act explicitly excluded fracking from the Environmental Protection Agency’s (EPA) Clean Water Act, a clause that has become known as the ‘Cheney-Halliburton Loophole’. A further environmental issue is that water recovered from fracking operations may contain materials from the surrounding rocks. These can include radioactive materials and heavy metals and need to be treated or properly disposed of to avoid contamination of water supply. This is another example of the need for proper regulation to minimize damage from fracking.

Another environmental concern that has surfaced relates to the role of shale gas and climate change. Given the greater energy required to produce shale gas, it might be expected that CO2 emissions would be higher than for conventional gas.

When writing this, some questions were circulating in my head and I listed them below for your food of thoughts. So for next week I hope you write-in and share your thoughts to stimulate further dialogues. I truly believe your ideas/inputs/comments/feedbacks are very critical to address our energy and manufacture challenges.

Food/Questions for Thoughts

Would shale gas R&D effort help toward reducing dependency on coal production?

Would shale gas R&D effort cut into the efforts of renewable energy research?

In a bigger picture, how would shale gas play in the energy security for the US?

Would shale gas projected production create jobs as claimed?

Are there other employment opportunities created to address the environmental concerns of shale gas?

What are the unintended consequences or wild cards of shale gas production?

Are the legal frameworks still playing catch up with technology development?

Could the environmental regulations keep up with technology development?

Would the current political environment change the dynamics of the development?


1. Annual Energy Outlook 2012 with Projection to 2035, DOE, June 2012

2. The National Energy Technology Laboratory (NETL), DOE, March 2011

3. Chemical Engineering Progress, August 2012

4. Shale gas and New Petrochemicals Investment: Benefit for the Economy, Jobs, and US Manufacturing, American Chemistry Council, March 2011

5. Shale Gas, A Renaissance to US Manufacturing? PricewaterhouseCoopers, LLP, Dec 2011

6. The ‘Shale Gas Revolution’: Developments and Changes, Paul Stevens, Energy, Environment and Resources, August 2012, Chatham House

Urbanization and Climate Change

By Dr. Nancy Brune


As has been noted, the world’s population is expected to increase to 8 billion by 2025 and 9 billion by 2050. For the first time in our history, 52 percent of the world’s population lives in urban areas. By 2030, six of out every ten people will live in cities; by 2050, this number will increase to roughly 70 percent of the global population (or 6 billion). By 2030, roughly 450 million people may be living in megacities. The pressures of population growth and urbanization on megacities and their infrastructure may prove quite problematic, particularly as competition for scarce natural resources becomes more intense. For instance, cities account for 70 percent of global energy use.  

In addition, research indicates that some of the world’s megacities may be particularly vulnerable to climate change. In particular, ports, which constitute more than half the world’s largest cities, are at “increasing risk from severe storm-surge flooding, damage from high storm winds, rising and warming global seas and local land subsidence.“ A 2005 OECD environmental report estimates the exposure of the world’s largest port cities to coastal flooding and damage due to high winds. The analysis finds that roughly 40 million people (about ten percent of the total port city population in the largest 136 port cities) and US$3 trillion in assets are exposed to these once in a century floods. By 2070, due to the “combined effects of climate change, subsidence, population growth and urbanization,” 150 million people living in port cities and US$35 trillion in assets (9 percent of estimated global GDP) may be vulnerable to these low frequency (once in 100 years), high impact events.  

Based on the OECD study data, Table 1 lists the top ten most vulnerable port cities by population (2070 estimates). Information on current population at risk, projected assets at risk, and the 2025 megacity ranking is also included.  As indicated, five of the top ten port cities facing greatest exposure (by projected population) to these disastrous (low frequency, high impact) floods are also projected megacities. For comparative purposes, OECD analysis indicates that while Tokyo is projected to be the biggest megacity with a projected population of 35 million (2025), only 2.5 million individuals face exposure to these devastating floods.  

Table 1. Largest Port Cities Facing Greatest Exposure (by population) to 1-in-100 year floods and their Megacity Ranking*

  Port City




 Population 2005

 at Risk


Population 2070 at Risk


Estimated Damage


(US$ trillion)

2025 Megacity Ranking

1 Kolkata, India






2. Mumbai, India






3 Dhaka, Bangladesh






4 Guangzhou-Guangdong, China






5 Ho Chi Minh City, Vietnam






6 Shanghai, China






7 Bangkok, Thailand






8 Yangon, Burma






9 Miami, FL, U.S.






10 Hai Phong, Vietnam






Population estimates are for metropolitan area.   

Climate change is expected to have devastating impacts on the people, infrastructure and economies of these megacities that are located near bodies of water. This set of megacities may face increasing challenges as climate induced migration forces greater numbers of individuals to flock to these already overflowing, densely populated megacities which are physically constrained by their water borders. As noted in a recent Asian Development Bank (ADB) report, in 2010-11, 42 million people in Asia were displaced by “extreme” weather. Megacities, included Dhaka, Ho Chi Minh City, Guangzhou, Kolkata, and Mumbai, are likely destinations for these displaced individuals. The majority of climate displaced migrants are likely to be poorer and less skilled than their urban counterparts. 

Already we have an indication of the devastating economic impact of climate change and flooding in some of these large port cities. For example, Ho Chi Minh City, on the Saigon River, just north of the Mekong, is Vietnam’s largest city and accounts for over one-fifth of the country’s economy.  The ADB has warned that if appropriate planning measures are not adopted to address flooding issues, more than 70 percent of the city could be affected by “extreme flooding” by 2050. In Thailand last year, flooding around Bangkok resulted in the country’s largest quarterly GDP contraction (9 percent year on year) since the Asian Financial Crisis of 1997-1998 and resulted in US$46 billion in damage. 

The projected economic cost of such low-frequency, high impact climate related events in these coastal megacities could exacerbate income inequalities (which are more extreme in cities), strain access to and availability of resources, and undermine recent progress lifting millions of individuals in the developing world out of poverty. The combined effect of these could result in these megacities serving as cauldrons for revolution. One only has to look at the Arab Spring to remember what can happen when large masses of disillusioned, suffering, economically disadvantaged people gather in the centers of densely populated urban areas. Would the Arab Spring have occurred if Tunisian market vendor Mohamed Bouazizi had immolated himself in the rural countryside?   

As Howard Passell noted earlier this week, good resource management could help mega-ports avoid a future scenario of unrest, violence and conflict between the haves and the have-nots. Governments need to consider climate change and resource availability issues when planning and designing management strategies.  

In particular, a greater emphasis must be placed on infrastructure planning, in light of increased demand and climate change. Specific policies to address and improve the resiliency of infrastructure systems should be included in planning and management policies. As the ADB and others have suggested, governments should craft ‘smart growth-like’ policies that include limiting or relocating urban and industrial /commercial expansion and encourage settlement in less vulnerable areas. New zoning and urban settlement laws and policies are needed. This is harder than might be expected. For example, Vietnam’s central and provincial governments have programs to address climate change but Ho Chi Minh City “still does not have the capacity to analyze and control development.”  

One way to assist effective infrastructure planning in light of increasing demand, resource scarcity and climate change is to establish and fund a Global Infrastructure Bank. The idea of a National Infrastructure Reinvestment Bank was proposed in the U.S. in 2007 by U.S. Senators Christopher Dodd and Chuck Hagel to address the estimated US$1.6 trillion infrastructure gap in the U.S. Since then, others have proposed various iterations of a National Infrastructure Bank (in 2011, Senators Kay Bailey Hutchison and John Kerry proposed the American Infrastructure Financing Authority). President Obama has also echoed the need to establish a national infrastructure bank.  

While the World Bank and regional development banks fund infrastructure projects (e.g. Three Gorges Dam), and have established climate fund programs (e.g. the ADB is funding a $2.5 million national climate change program in Vietnam) to help countries adapt to climate change, these financial institutions also fund many other programs in the areas of education, health and agriculture. Resources could be more efficiently leveraged and directed under the roof of a Global Infrastructure Bank with a single focus.  

More importantly, another advantage of a single Global Infrastructure Bank is that it could require funded infrastructure projects, both new and improvements of current systems, to address (and promote) smart growth issues. The Global Infrastructure Bank professionals should also require projects to have specific design and operational features that improve the resilience of the system to climate change impacts. Funded by both private and public actors, the Global Infrastructure Bank could provide technical assistance and promote capacity building in the focused areas of smart development and enhanced resiliency of urban infrastructure systems to the impacts of climate change.  

The world’s megacities face a number of challenges – climate change, natural rural-urban migration, climate induced migration, resource scarcity, and population growth. It is widely expected that the impact of climate change and increased urbanization is most likely to manifest itself in pressures on the urban infrastructure systems – i.e. lack of housing, increased demand for energy from an old grid, and inadequate water and sewage systems. Service delivery challenges and the potential inequalities in access to and quality of services may exacerbate socio-economic and political tensions. A Global Infrastructure Bank that funds smart, resilient infrastructure for climate-affected megacities might be the most effective resource for governments who want to avoid megacities becoming cauldrons of revolution and unrest. 


Dr. Nancy Brune, a political economist, is a Non Resident Senior Fellow at the Center for A New American Security where she works on issues of natural security, the water-energy-security nexus, and food security.

By Howard Passell Posted in GT2030

Alpha-cities, megaslums, and tomorrow’s revolutions

By Dr. Tomas Ries 

Cities are among the oldest major political actors on the planet. At one time – the Greek city states and the Roman Empire – they ran the show, as the main actors able to concentrate and administer power. With the spread of kingdoms and empires cities as independent political actors declined, ending definitively when they were swallowed by the all-encompassing power of states. Cities remained one the crown jewels of the state, but they did not own, or control, the treasure chest. 

Today globalisation has broken open the treasure chest and eroded much of the states’ former exclusive control of the contents. Instead, many of the crown jewels are assuming a life of their own. Currently, the two treasures left under the exclusive control of the state are military power and territory, notably including the natural resources embedded in that territory. Elite states also retain an ability to simultaneously manage broad multifaceted challenges that few other actors have. However the state has lost two key jewels. First, the former exclusive political authority of the state is gone. It must now share legitimacy with empowered civil societies with increasingly independent identities, whose citizens and agendas transcend national boundaries, and that have tremendous powers to sway voters and consumers. Second, control over economic production and its technological foundations– the bloodstream of society – has passed to transnational corporations with a global mobility and presence that again transcend the authority of any single state. 

Two deep technological trends have enabled this shift. First, the metamorphosis and multiplication of physical communications, giving rise to economic, technological and social flows that transcend state boundaries and control. Second, the revolution in information communications, which has empowered individuals as never before. With internet+ the power to spread information that twenty years ago was the exclusive domain of the state and the big national media corporations is now available to billions of individuals. Simultaneously, scientific and technological know-how is now percolating down to broader parts of society. The same empowerment applies, in a darker fashion, to organised crime and transnational revolutionary movements which are also becoming powerful non-state actors. 

In this globalising world cities so far have not assumed a political role. They continue to serve as the central platforms where the significant action takes place but they remain the servants of the state, business and society. Three factors are likely to change this. 

First, vitality. In our world of rising transnational flows, cities, rather than states, are the central nodes of vitality in the global network. The key social, economic and technological flows now go between cities, not states. While states retain regulatory powers over the flows, they no longer steer the flows themselves, and, on a deeper level, they are no longer the context in which these economic flows take place. Instead, the key economic, technological and social threads come together in the cities, and directly between cities. These vital nodes, which we may call the alpha-cities, are replacing the state as the focal point of social and economic attention. Human vitality is now centred on cities, not states. 

Second, expanded horizons. In yesterday’s world a city’s vital concerns ended at the city boundaries. Thereafter the state took over. In today’s liquid world of rapid transnational flows, the concerns of the alpha-city are global. For New York, what happens in the tribal areas of Pakistan is of immediate and existential importance. Today’s alpha-cities have increasingly urgent global vital interests ranging from security to migration to infrastructure. They have a vital stake in world affairs, and if the state cannot satisfy these needs, then they must develop them themselves. 

Third, global urbanisation. Cities are now the main human habitat on the planet, and cities are swelling to megacities and urban sprawls with populations that surpass most states. Cities will thus dominate the global social and political scene not only as the key vital nodes, but also in terms of sheer numbers. This however also means that not all cities will be alpha-cities. The world will include a huge share of megaslums, existing on the margins of the vitality networks and with miserable living conditions. They will emerge as the key centres of instability. If the positive action will focus on the alpha-cities, the transnational tensions from megaslums will emerge as one of our main political security challenges. 

The above three factors indicate the rising global role and weight of cities as platforms, but say little about the city itself as a political actor. The fourth factor, which will affect this, is who will ensure that the megacities’ vital interests are met. These interests now exceed city and even national boundaries, including critical regional and global security challenges, infrastructure services, social flows, relations with other actors, and so forth. So far, the state has provided these services for the cities within its boundaries. As long as the state continues to do so the alpha-city may remain content to continue to act as a platform, focussing on providing as attractive and efficient a habitat and workplace for others as possible. However even at this minimum level, the city will become a far more powerful actor vis a vis the state, transforming national politics. A second possibility is that the state can no longer provide the transnational services that the alpha-cities require. In this case the Alpha-cities will have no choice but to secure these interests themselves. And they will have the human and economic resources to do so, quite possible exceeding what the state has to offer. In this case, key Alpha-cities will emerge as major global political (and security) actors in their own right. 

The alpha-city is emerging as a powerful stakeholder with vital global interests, including political and security. If the state can no longer ensure these interests then the alpha-city will have no choice but do so on its own, or in consort with other alpha-cities. This rise of the alpha-city as a major global political actor is the first revolution. 

The second revolution, or set of seething revolutions, is likely to be in the global megaslums. The social tensions here are likely to be the main seedbed of tomorrow’s transnational challenges, generating ever strong revolutionary tensions and more powerful criminal networks. 

None of this means that the state is over. As noted above, states today are still the most powerful military actors, and states remain the owners of the natural resources on their territories. In a world of increasing ecological scarcity the latter is no mean treasure. However, globally the social and economic centres of gravity are now shifting to the alpha-cities with increasingly global interests. And where the vitality and money goes, power tends to follow. And where the money is missing, and people mass, revolutions tend to explode.


Dr. Tomas Ries is an Assistant Professor in the Department of Security and Strategy at the Swedish National Defence College in Stockholme.

By Howard Passell Posted in GT2030

Urban Fragility and Global Megacities

By Dr. Stephen Commins

A fundamental challenge for the future is that in many low and lower middle income countries, urban population growth will continue to outpace the capacity of both national and municipal governments to effectively maintain infrastructure, manage environmental resources, provide security and other basic public services. At all levels of government, central, municipal and local, governance challenges will be immense and the potential for these destabilizing trends to protract or contribute to conflict and intra and inter-state tensions will increase.

The governance challenges associated with administering increasingly complex urban systems is enormous, especially as many megacities’ populations far surpass those of numerous countries, and will likely grow exponentially faster than their sovereign counterparts.  New forms of conflict and prejudice emerge in over populated and underserved urban centers. Xenophobic hostility towards other ethnic groups, “foreigners”, extra-legal vigilante activities of “crime-fighting” and socio-economic struggles around issues of land and services emerge. Despite these trends that have been emerging for decades there is a lack of targeted research or policy guidance on the connections between urbanization and conflict or state fragility.

This trend is not confined to megacities, but is becoming frequent throughout much of Africa and Asia as urban demographic shifts along with state-directed decentralization have outpaced capacities for local government institutions to manage these shifts in responsibilities and the inherent tensions that result from underserved citizens and dynamic population movements.  Additionally, definitions of national identity and political legitimacy will increasingly be shaped by urban power relations and social, economic and environmental trends.

Urban centers, especially capitals and large cities, tend to be centers of competition for political power and resources, as well battlegrounds for both official and unofficial definitions of national identity and state legitimacy power. Grievances around the lack of essential and basic services, coupled with increased insecurity, crime and lawlessness can contribute to instability and challenge systems of governance and national power leading to fragility. Urban areas that are largely underserved and underrepresented can become virtual ungoverned spaces close to centers of political power making more vulnerable a central or national government.

With a growing frequency, unmet expectations in quantity and quality of governance outputs across security, political, economic, and social sectors result in violence, which (especially when related to gang and militia activity) further destabilizes urban environments. Significant progress has been made toward understanding and attempting to stabilize fragile states over the past decade; however,  comparative attention to fragile and unstable cities has not kept pace with emerging challenges.

Urban fragility is a useful analytic concept, as it builds on the current fragile states literature.  Understanding dynamics of urban fragility will likely grow in importance due to the increase in urban economic migrants, conflict related IDPs, and the growing number of ‘climate refugees’.  There is little evidence that local governments will develop the ability to address the growing level of poverty in urban slums, as there is a shift of the poorest 20% from rural to urban settings. 

International (bilateral and multilateral) donors have invested relatively little in urban development, urban livelihoods and urban governance.  The lack of investment in urban areas increases the risk of insecurity due to poverty, political alienation, criminal networks, and increased demands on weak and under-resourced government security and justice services.

Urban fragility does not mean chaos or disorder, which may be the perspective when viewed from the outside, as it describes an internal dynamic that is distinctive in its political ramifications.  Urban violence and insecurity does not occur in cities because they are inherently less viable living and social locations.  They occur because urban areas are the home to a large concentration of poor people and, in most cases, the center of political power which affects their lives. In other words, urban fragility is related to the economic and political relations within a city.

For example, basic services when delivered effectively can improve perceptions of local government, but there are inherent tensions between delivering services to meet immediate needs and the strengthening of public institutions in the longer term.  A primary goal must be to improve local government, in both capacity and accountability. Good urban governance is probably the most important factor of all. Broad and sustainable urban development depends on political leadership that is committed to a democratic and equitable vision of urban society. Local authorities need strengthening and empowerment.

Governments and international agencies face several major challenges:

  • How is it possible to restore the local government capacities and to organize or support organizational mechanisms that effectively and accountably provide social services, after years of economic malaise, political breakdown or general neglect?
  • What should be the balance between rebuilding local bureaucracies and other forms of social provision and service delivery given the impact of fragility and other political factors?
  • Insofar as other modes of service delivery, centered around non-state bodies, have emerged during recent years, should the local government eventually work towards replacing, regulating and/or strengthening them?
  • What potential forms of synergy exist between rebuilding local government capacity and enhancing mechanisms of cooperation (i.e. ‘social capital’) in civil society?
  • Donors have generally failed to give adequate attention to urbanization issues in general or in Africa in particular.  This can be seen when reviewing the program emphases of USAID as well as European agencies and the World Bank.  UN Habitat has a marginal role in terms of shaping donor practice, as opposed to providing information.  A review of the current fragile states literature shows that urbanization does not have prominence other than in some of the research on violence, especially in Latin America.

 In order to address urban fragility it will be necessary to significantly change donor programs in terms of the level of resources to address the scale required, the type of resources, the channel (state and non-state) of resources and the rural/urban balance.  Governments and international agencies need to recognize urban fragility as a development problem. The reduction ofurban fragility should be included in development planning, not just because of the increasing levels of violence, crime, fear and insecurity in local communities, but the broader affects of weak infrastructure and lack of livelihoods on the daily routine of urban slum dwellers. 


Dr. Stephen Commins is a Lecturer in the Department of Urban Planning, Luskin School of Public Affairs, UCLA.

By Howard Passell Posted in GT2030

The wealth and power nexus: will megacities revolutionize global governance?

By Dr. Peter Engelke

The rapid growth of cities in Asia, Africa, and elsewhere has shifted the world’s center of wealth, altered global production and consumption patterns, and increased pressures on natural resources. Moreover, the dramatic increase in the number of megacities—the colossal heavyweights of the urban world—has inspired talk of a revolution in how the world is governed. Megacities, so the argument goes, are the locus of innovation, of wealth formation, of material production and consumption, and not least are home to enormous numbers of human beings. These conditions have prompted many to assert, as has New York’s mayor Michael Bloomberg, that cities cannot wait for national leadership on economic policy. Rather, megacities like New York have to attract foreign investment, intellectual talent, and other resources in a competitive global system consisting mainly of other cities. The writer Parag Khanna asserts that megacities increasingly bypass national governance structures in preference for their own ad hoc, city-to-city alliances. The new realities of globalization require that governance shift from nations to cities, from control of territory to control of transnational flows of capital, goods, and people. No megacity, Khanna argues, “is waiting for permission from Washington to make deals.”

These arguments speak to an underlying impression that the Westphalian governance system (wherein the world is run by sovereign nation-states) has been eroding since at least the end of the Cold War. As Khanna indicates, other actors such as megacities have emerged within the international system; together, they possess enough clout to challenge existing global political structures. Indeed, the post-Cold War world has been characterized by economic and ecological flows of money, goods, services, people, matter, energy, and pollutants within complex and multilayered actor networks. Traditional interstate competition, especially military rivalry among great powers within clearly delineated global hierarchies, has faded but not disappeared. Technologically-driven globalization processes, combined with non-traditional security threats (e.g., asymmetric warfare and terrorism, climate change, and resource scarcity), are likely to remain foundational characteristics of the twenty-first century world.

A fair number of theorists and practitioners have placed much hope in the ability of megacities to forge new global governance structures for an uncertain age, one in which nation-states appear to be unable or unwilling to take on these multiple challenges. Benjamin Barber’s forthcoming book, If Mayors Ruled the World, rests on Barber’s observation that cities have an “inherent disposition to cooperate,” from which it follows that cities are in a strong position to create democratic, bottom-up, and cooperative global governance structures.

One can view such processes at work in the context of global environmental governance. For some time, local authorities have been leading coordinated responses to environmental problems, in particular to climate change.  Mayors and other local leaders recognize that their cities generate a large fraction of global GHG emissions and, simultaneously, that they are highly vulnerable to climate change disruptions (storm surges, drought, heat waves, etc.). Yet, cities largely have been excluded from interstate negotiations about climate change—the Kyoto Protocol, for instance, gave no role to cities, nor did the Kyoto negotiation process itself. Until 2005, city leaders had to hold parallel summits during the UNFCCC negotiating sessions; after 2005, they were included as observers. Given the inability of nation-states to forge binding climate agreements resulting in deep emissions cuts, local governments have worked to occupy this policy space through forging their own cooperative structures. Dense global networks of such structures now exist, wherein local governments work with private and non-profit actors such as ICLEI (International Council for Local Environmental Initiatives) to share information, shape norms and expectations, and set GHG reduction standards.

Megacities have been at the forefront of these efforts. Two well-known examples are the C40 Cities network and the Tokyo emissions trading scheme (ETS), both of which show that megacities can create or influence global norms, processes, and governance structures. Founded in 2005 under the leadership of London’s then-mayor, Ken Livingstone, C40 is an example of how large cities can create effective governance structures to combat global problems. Led by large-city mayors (New York’s Bloomberg is the current chair), C40 is now among the highest-profile actors in the global debate about climate change. Its activities include annual summits, partnerships with international organizations such as the World Bank, and the development of tools for measuring and reporting GHGs. Tokyo’s ETS, in contrast, illustrates how a single megacity’s innovative efforts can shape events elsewhere, including at national and international scales. Over the past decade, Tokyo’s metropolitan government has created the first urban CO2 emissions cap and trade program. Since implementation, Tokyo has produced a practical, workable emissions program that has reduced energy consumption faster than designers of the scheme anticipated. Conversely, Japan’s national government has been unable to create a mandatory trading scheme of its own, owing to political obstacles (a proposal for a Japanese ETS, based on Tokyo’s scheme, was shelved in 2010 on the familiar grounds that it would make Japanese exports less competitive). For the time being, Tokyo’s ETS is Japan’s carbon-reduction policy innovation. Because Tokyo is the world’s largest megacity and one of the richest, its experiment has set an important precedent for others to emulate. There is little reason why New York or Shanghai or Buenos Aires or any other megacity would not be interested in copying Tokyo’s model, even if such adoption meant contradicting national GHG emissions policies.

Before concluding, one caveat deserves highlighting. While this essay focuses on how megacities can leverage their strengths for purposes of global governance, the world’s megacities are hardly uniform. Tokyo and London are not the same as Lagos and Cairo. The former have greater aggregate and per-capita wealth, technological and industrial might, infrastructural assets, and access to foreign direct investment, hence their citizens on average enjoy better health, longevity, and well-being. This short essay is not meant to paper over the real problems facing the world’s fastest-growing, majority-world megacities, problems that other essayists are addressing during this week’s Global Trends 2030 blog series. In the simplest terms, the world’s megacities possess different capabilities for projecting power onto the global stage, capabilities that are shaped but not determined by the above factors. Yet at the same time, we would be remiss if we failed to recognize that even the poorest megacities have much capacity for altering their development trajectories through self-governance. (Lagos, for instance, long has had a reputation for being one of the world’s most dangerous and polluted megacities, yet in recent years local leadership has received plaudits for innovative yet practical reforms across multiple sectors. Lagos’s story is regarded as an example of how the devolution of power from national to local governments can benefit majority-world megacities.)

To answer the question of whether megacities will revolutionize global governance, in my opinion the answer is a strong “it depends on what we mean by revolution.” In my opinion, it is premature to declare that the world is heading toward a governance system that is dominated by megacities as opposed to one dominated by nation-states. Historically, large cities and powerful nation-states have coexisted, with the former often being sited within the latter. Indeed, after the onset of the Industrial Revolution, rapid urbanization proceeded in tandem with nation building rather than in spite of it. During the nineteenth and twentieth centuries, London, Beijing, Moscow, Delhi, Paris, Berlin, and Tokyo all emerged as large, powerful capitals of large, powerful nation-states, suggesting that megacity growth and national development were more synergistic than competitive processes. As has been true of the post-Cold War era, the decades on either side of 1900 were also characterized by much enthusiasm for globalization and its liberating effects, yet the nation-state and its dominance of the global system hardly withered away in the century that followed. The leading cities of fin-de-siècle Europe—Vienna, Berlin, Paris, London—might have been the centers of commerce, culture, and technical innovation, but they did not displace nation-building, national rivalry, or great power warfare.

Having said this, a governance revolution is still underway, albeit one that is likely to stop short of replacing the Westphalian model. As the emerging climate regime shows, megacities are likely to build structures that parallel, overlap with, and inform interstate forms of global governance. These structures will be characterized by cooperative, voluntary, and non-hierarchical arrangements. Megacities will aim to fill in global governance gaps and otherwise provide leadership on politically difficult issues such as climate change. For their part, states would be wise to treat megacity development as integral to their own objectives. Not only are megacities not going anywhere, they will be increasingly important for securing global prosperity and stability.


Amen, M., N. J. Toly, P. L. McCarney, and K. Segbers. 2011. Cities and Global Governance: New Sites for International Relations. Burlington: Ashgate.

Betsill, M., and H. Bulkeley. 2006. “Cities and the Multilevel Governance of Global Climate Change.” Global Governance 12 (2): 141-59.

Bloomberg, M. 2012. “Cities must be cool, creative and in control.” FT.com.http://www.ft.com/intl/cms/s/0/c09235b6-72ac-11e1-ae73-00144feab49a.html#axzz242UhjJFN.

C40 Cities. 2011. Climate Action in Megacities: C40 Cities Baseline and Opportunities. New York: C40 Cities Climate Leadership Group and Arup.

Dobbs, R., J. Remes, J. Manyika, C. Roxburgh, S. Smit, F. Schaer. 2012. Urban world: Cities and the rise of the consuming class. San Francisco: McKinsey Global Institute.

Florida, R., with B. Barber. 2012. “Next Great Idea: What If Mayors Ruled the World?” The Atlantic Cities. http://www.theatlanticcities.com/politics/2012/06/what-if-mayors-ruled-world/1505/.

Kaplan, S. 2012. “City Development States: Why Lagos Works Better than Nigeria.” Policy Innovations. http://www.policyinnovations.org/ideas/innovations/data/000212/:pf_printable?sourceDoc=000065.

Khanna, P. 2010. “Beyond city limits: The age of nations is over. The new urban age has begun.” Foreign Policy. www.foreignpolicy.com/articles/2010/08/16/beyond_city_limits?page=full.

Liotta, P.H., and J.F. Miskel. 2012. The Real Population Bomb: Megacities, Global Security and the Map of the Future. Washington: Potomac Books.

McLannahan, B. 2012. “Eastern premises: Tokyo metropolitan government,” FT Urban Ingenuity, p. 18.

Medearis, D., P. Garforth, and S. Blüm. 2010. AICGS Policy Report 43: Promoting Energy Innovation and Investment through Transatlantic Transfer of Community Energy Policies. Washington: American Institute for Contemporary German Studies.

Rice, X. 2012. “Africa: Lessons from Lagos.” FT.com. http://www.ft.com/intl/cms/s/0/8b24d40a-c064-11e1-982d-00144feabdc0.html#axzz1z8dLN2Al.

Toly, N. 2008. Transnational Municipal Networks in Climate Politics: From Global Governance to Global Politics. Globalizations 5 (3): 341-56.

 United Nations Human Settlements Programme. 2011. Cities and Climate Change: Global Report on Human Settlements 2011. London: Earthscan.


Dr. Peter Engelke is a Senior Fellow with the Atlantic Council of the United States. 

By Howard Passell Posted in GT2030

Can we predict which megacities are most vulnerable to epidemics?

By Dr. Nat Cobb

I would like to explore the influence of health on the question: “will megacities be a crucible of disaster or innovation?” It goes without saying that an uncontrolled epidemic in a large city would be a disaster of potentially global impact. What are the factors that might contribute to the resilience or vulnerability of a city? Can we predict which are the most vulnerable?

Large cities have many positive qualities that contribute to their resilience and vitality, among them being the abundance of human resources, the efficiency of high population density, and the rapid exchange of ideas and innovation. A single well-placed hospital or clinic can serve many thousands of people. An emerging public health problem can be rapidly detected and mitigated. Centrally placed resources for disaster preparedness can be quickly available to a large population.  The highly networked nature of cities adds resilience through the capacity for rapid communication and emergency response.1

As a city expands to “megacity” status, however, a number of negative factors become more prominent. The basic sanitation infrastructure to provide potable water and waste removal may be severely challenged. Environmental degradation adversely affects health and quality of life. As crowding increases, the lack of mobility affects access to health care, and decreases independence.

Socially, rapid growth through in-migration leads to a lack of community cohesion, breakdown of social structures, inadequate education, and increased crime rates.2 Physical inactivity and limited access to healthy foods contribute to a rise in chronic diseases, which disproportionately burden the health system and degrade productivity. A high level of disparities in wealth, education, and health can put further strain on social stability and resilience.

Cities under these sorts of stresses often balance in a dynamic equilibrium with just-in-time fixes. The equilibrium may become increasingly fragile through the cumulative “friction” of many negative forces, such as a gradual increase in chronic disease prevalence, malnutrition, and slow-burning epidemics like HIV. Like a lightning strike in a bone-dry forest, all it takes then is the sudden kick of a hurricane, a virulent infectious disease, or a war to tip the balance toward chaos and the loss of many lives.

Not every epidemic is a disaster. If the problem is rapidly recognized, adequate resources are brought to bear, and the population cooperates with control measures, then the disruption of even a deadly disease can be minimized. When and where do catastrophic epidemics occur? Can we build a model that will assign a probability to their occurrence? I suggest that a reasonably predictive model for megacities (>10 million) might be constructed with only two inputs: growth rate, and resources available. The rate of growth can be estimated by demographic surveys or census; resources might be measured as per capita public sector spending, or  perhaps per capita gross economic activity. As long as the city is able to feed, employ and clean up after its population, it will indeed be a crucible for innovation. When population growth overwhelms the ability of infrastructure to keep up, we will see an inflection point with rapidly increasing vulnerability to a catastrophic breakdown.

The model might be further improved by adding other variables: an index of socio-economic disparity; population density; air and water pollution; and a measure of the functionality of government. One might also include factors for “special case” vulnerabilities such as active faults or volcanoes, refugee situations, etc.

A predictive model would be valuable for institutions like the World Bank, World Health Organization, and the US Centers for Disease Control and Prevention, who could focus their surveillance efforts and interventions on the most likely flashpoints. If the models do indeed show a predictable inflection point, extra resources might be summoned to address the weakness in a city that was approaching that point. Our increasingly networked systems are ever more vulnerable to disruption from a distant disaster, so it matters to all of us that Lagos, Nigeria (11.2 million) has a growth rate of 4%, and that Karachi, Pakistan is at 13.9 m and 3.2%.3 Are they at higher risk than the Chinese mega-region of Hong Kong-Shenzhen-Guangzhou (120 m, 6-12%)?4 We need a model.



1.      The Age of the Unthinkable, Joshua Cooper Ramo. Little, Brown and Co. 2009.

2.      Instant City; Life and Death in Karachi. Steve Inskeep. The Penguin Press, 2011.

3.      World Urbanization Prospects, 2011 Revision. United Nations Department of Economic and Social Affairs/Population Division.

4.      State of the World’s Cities 2008/2009. United Nations Human Settlements Programme, Nairobi, Kenya.


Dr. Nat Cobb is an assistant professor in the Dept. of Family and Community Medicine, UNM School of Medicine, the former Chief, Chronic Disease Branch, Division of Epidemiology, Indian Health Service, and Capt. (ret.), U.S. Public Health Service.

By Howard Passell Posted in GT2030

Will Mega-Cities be a Cauldron for Revolution or an Engine for Technological Revolutions?

Howard Passell

In the last couple of years humanity passed an important threshold: We are now predominantly an urban species, with a little more than half our total population (now a little over 7 billion) living in cities of all sizes. Accordingly, the size of cities is growing as well. In 1950 there were 75 cities with populations larger than 1 million, and in 2011 there were 447. In 1950 the average size of the 100 largest cities was 2 million, and in 2011 it was 7.6 million (Engelke 2012). In 2007 there were 19 megacities with populations greater than 10 million, and in 2025 there will be 26. In 2007 there was only one megacity with a population greater than 20 million (Tokyo, at about 36 million, with more people than Canada). In 2025 there will be 8, with many in developing nations (Table 1, UN Habitat 2009).

 Table 1. Megacities

  2007       2025  
    Population       Population
    (thousands)       (thousands)
1 Tokyo 35,676   1 Tokyo 36,400
2 Mexico City 19,028   2 Mumbai 26,385
3 New York-Newark 19,040   3 Delhi 22,498
4 Sao Paulo 18,845   4 Dhaka 22,015
5 Mumbai 18,978   5 Sao Paulo 21,428
6 Delhi 15,926   6 Mexico City 21,009
7 Shanghai 14,987   7 New York-Newark 20,628
8 Kolkata 14,787   8 Kolkata 20,560
9 Buenos Aires 12,795   9 Shanghai 19,412
10 Dhaka 13,485   10 Karachi 19,095
11 Los Angeles 12,500   11 Kinshasa 16,762
12 Karachi 12,130   12 Lagos 15,796
13 Rio de Janeiro 11,748   13 Cairo 15,561
14 Osaka-Kobe 11,294   14 Manila 14,808
15 Cairo 11,893   15 Beijing 14,545
16 Beijing 11,106   16 Buenos Aires 13,768
17 Manila 11,100   17 Los Angeles 13,672
18 Moscow 10,452   18 Rio de Janeiro 13,413
19 Istanbul 10,061   19 Jakarta 12,363
        20 Istanbul 12,102
        21 Guangzhou-Guangdong 11,835
        22 Osaka-Kobe 11,368
        23 Moscow 10,526
        24 Lahore 10,512
        25 Shenzhen 10,196
        26 Chennai 10,129

Source: UN-HABITAT 2008. Data from UN Population  Division, World Urbanization  Prospects 2007. Figures for 2025 are projections. Note: Population figures are for urban agglomeration, not city proper. Megacities are cities with populations of more than 10 million.

By 2030, about 450 million people may be living in megacities. That will represent only 5-6 percent of the projected global population of about 8 billion. Many of those people will be very poor, and some will be very rich. In any case, the megacities, as centers of finance, governance, manufacturing, commerce, and culture will be powerful forces of change in the world, either for good or ill, or both.

Characteristics of megacities and the threats and opportunities that may arise from them have been noted by many authors. Energy use in cities can be more efficient, due to higher population densities, but higher population densities along with weaknesses in freshwater, food, and energy availability and waste treatment processes can create devastating poverty, disease, and suffering. Freshwater, food, and energy will flow into cities from areas around the cities, creating the potential for resource depletion around the cities, and the waste flowing out will pollute watersheds, air sheds, and coastal areas.  Migrant poor will flow into cities to escape regional resource depletion. They will provide cheap labor for manufacturing and service industries, or they will end up in the slums and provide fodder for the socio-political revolution.  

Transportation systems  within and around megacities can grease the wheels of an effective economy if they are well designed and well maintained, or they can create physical gridlock, economic stagnation, noise, pollution, and health threats if they are not. Construction that is well regulated can create habitat for humanity, or if poorly created can create disasters large and small. Megacities are more vulnerable to natural disasters such as flooding, hurricanes, earthquakes, tsunamis, and heat waves (many of which may be exacerbated by climate disruption) just by virtue of their high population densities — but their wealth can also be used to build resilience (Niemczynowicz 1996, Molina and Molina 2004, Varis 2006, Lawrence et al. 2007, Wenzel et al. 2007, Adikari 2010, Kramer et al. 2011, Engelke 2012). In all cases, wealth will be a buffer against many of the problems described above, and poverty will exacerbate them. A persistent global economic downturn may have devastating effects on megacities and all large cities struggling with increasing demands placed on decaying infrastructure.

So, will megacities be a cauldron for revolution, or for technical innovation?

Let me propose that the answer to this question will be a function of the ability of megacity governance to manage growth (by both reproduction and migration) and resource consumption. A megacity will be a cauldron for revolution if it cannot manage both well, and an engine for innovation if it can.  

This proposal implies at least a couple things. First, it implies that governance, and not the private sector, should have a strong role in managing growth and resources. Around the world we see that good governance, along with wealth, can overcome the confining influence of resource scarcity. Singapore is an example of a big city (pop. 5.26 million) where that dynamic plays out, and where the city is a crucible of innovation. Good governance in Singapore has manifested over the decades as strong and strict leadership and immigration policy, good public education, and the strong rule of law. (Singapore benefits too because it is also a state, with much greater control than most cities over the dynamics described above.) We can think of many other big cities and megacities around the world where poor governance and resource scarcity are contributing to poverty, disease, and social unrest. Cities like Singapore emerge in the global landscape, but that emergence is the result of many historical events, some planned, some accidental. It is not so easy to recreate that emergence in regions around the world where it might be important.  Good governance, in megacities and everyplace else, will be an essential component for fostering that emergence.  

Second, the proposal above implies that that both growth and resource consumption can effectively be managed. Although there are many policy level and technological mechanisms for providing this management, it seems true that there are fewer examples around the world where growth and resource consumption are managed effectively than where they are managed poorly or not at all.

China has managed population growth to some extent, with well-known downsides, but its resource management appears to be out of control. Population growth in the US has controlled itself through the demographic transition from high infant and child mortality and high fertility, to greater survival of infants and children and lower fertility. Some resource management in the U.S. (e.g. water and air quality, biodiversity) is good (but probably not excellent) on account of good governance, the luxury of wealth, and effective regulatory mechanisms. However, energy use in the US is out of control.  Europe’s population growth is under control because of its own demographic transition (which brings an aging population to Europe, with its own set of problems), and resource management may be managed better there than in the US. But in most other parts of the world, especially in the developing nations of Asia and Africa, both population growth and resource management may be characterized, so far, as being beyond human control. If one considers the skyrocketing exponential curve describing the growth of human population on Earth over the last few hundred years, then the conclusion that population growth is out of control is almost inescapable.

The growth of cities around the world may be a large-scale, long-term dynamic that, like the growth of population in general, may be beyond human control.  Step back for a moment, run history in fast forward, and watch the movement of humanity from what was once tiny groups widely dispersed across the surface of the Earth, each with relatively tiny and widely distributed ecological footprints,  into increasingly concentrated agglomerations of larger and larger numbers with ever increasing footprints. It looks like an evolutionary process, a biologically hard-wired feature of social hominids. How far will that go? Where is the equilibrium point in the ratio between urban and non-urban humans on Earth? Is there an optimal ratio, from the human perspective? And if we can identify it, can we manage things in such a way that we might balance ourselves on it?

Biological organisms have size limitations based upon their food and other energy sources, their metabolisms, and other ecological constraints. We have no mammals on Earth any bigger than blue whales, and they only got so big, in part, because they can float. Maybe a city is like a biological cell, moving resources in across the cell membrane, turning them into biomass (and in the case of cities, into human products) and moving waste out. Surface to volume ratios are crucial. Just how big can a city get before it can no longer move sufficient resources in across its boundaries, and before it can no longer move sufficient waste out? And as a city approaches that point, how do those stresses become manifest in human health, wealth, and security? Greater emphasis on the study of the ecology of cities would be useful.

Other authors have proposed that managing megacities will require massive technical investment, institutional development, a mix of policy measures, strong political will in managing environmental challenges in a sustainable way, and public dialogue (Molina and Molina 2004, Varis 2006). Let me propose that if population growth and resource consumption can be managed at all, then it will most likely come from some combination of all those things plus good governance, strong regulatory structures, and fiscal incentives. By good governance I mean that which is relatively free of corruption and which has the common good in mind. This will include assuring that the urban poor have sufficient opportunities to keep them invested in the rule of law. Strong regulatory structures will protect resource systems (water, energy, agriculture, ecosystems) from despoliation for short term profit. Fiscal incentives will help modify individual and collective human behaviors. All of this will benefit from computer simulation modeling implemented with stakeholders from the cities and used to evaluate tradeoffs associated with different future strategies.

But the devil is in the details, and changing our current governance, policy and fiscal approaches so that they match all those proposed above will be no easy task. Perhaps all we can conclude is that for the question posed above — Will megacities be a cauldron for revolution or for technical innovation? – the best answer may just be ‘Yes.’ And both options, peacefully achieved, might be for the best.



Adikari, Y., R. Osti, T. Noro. 2010. Flood-related disaster vulnerability: an impending crisis of megacities in Asia. Journal of Flood Management 3 (3):185-191.

Engelke, P. 2012. The security of cities; development, environment, and conflict on an urbanizing planet. The Stimson Center, Washington, DC.

Kramer, A., M. H. Khan, and H.J. Jahn. 2011. Public Health in Megacities and Urban Areas: A Conceptual Framework. In A. Kramer (ed.), Health in Megacities and Urban Areas. Springer-Verlag, Berlin.

Gurjar, B.R., A. Jain, A. Sharma, A. Agarwal, P. Gupta, A.S. Nagpure, J. Lelieveld. 2010. Human health risks in megacities due to air pollution. Atmospheric Environment 44:4606-4613.

Lawrence, M.G., T.M. Butler, J. Steinkamp, B.R. Gurjar, J. Lelieveld. 2007. Regional pollution potentials of megacities and other major population centers. Atmospheric Chemistry and Physics 7 (14): 3969-3987.

Molina, M.J., L.T. Molina. 2004. Megacities and atmospheric pollution. Journal of the Air and Waste Management Association 54(6): 644-680.  

Niemczynowicz, J. 1996. Megacities from a Water Perspective. Water International 21(4): 198-205.

United Nations (UN) 2009. State of the World’s Cities, 2008/2009; Harmonious Cities. UN Human Settlements Programme, Nairobi, Kenya.

Varis, O. 2006. Megacities, Development and Water. Water Resources Development 22(2): 199-225.

Wenzel, F., F. Bendimerad, R. Sinha. 2007. Megacities – Megarisks. Natural Hazards 42: 481-491.


Howard Passell is an ecologist at Sandia National Laboratories in Albuquerque, New Mexico, USA.


By Howard Passell Posted in GT2030