Cities have always set the pace for human progress. From the Greek polis and medieval cities to contemporary megacities like Mexico City, Shanghai and New York, cities have traditionally been the center of art and culture, trade and industry, science and technology. Some 50 percent of global economic output is generated in the world’s 600 biggest cities alone. Yet the negative effects of progress have also been most evident in cities: noise, over-crowding, environmental pollution and traffic congestion.

In the past cities were the exceptional oases of human civilization. Today they are the norm. Two hundred years ago, only three percent of the world’s population lived in cities. Today the total has grown to over half, and the trend is accelerating. Urban problems have also kept pace with this growth. Cities now produce 80 percent of the world’s greenhouse gas emissions and consume 75 percent of all energy produced.

Humanity already consumes more resources than our planet can provide over the long term. In light of the growing world population – by 2050, over nine billion people are expected to inhabit Earth – achieving sustainable development is crucial. To ensure our future development, we must substantially reduce our consumption of energy and resources. And we must begin these efforts in cities, as they hold the key to the future of humankind.

Many major cities around the globe have acknowledged this fact and have responded by setting goals to protect the climate. London, for example, aims at slashing its carbon emissions some 60 percent by 2025. And Denmark’s capital Copenhagen plans to cut its carbon emissions to zero by 2025. Munich wants to produce enough green power in its own power plants to ensure that the all of the household needs for its citizens can be met with renewable sources by 2014 and the city’s total energy needs by 2025.

And none of these goals are out of reach. Energy consumption and CO2 emissions can already be drastically reduced using today’s technologies. Buildings, for example, use roughly 40 percent of the world’s energy. By intelligently integrating their lighting, data, climate and security systems, one can reduce this consumption by up to 40 percent.

Moving our cities toward more sustainable practices will not come without a financial cost. Consultants estimate that worldwide investments by communities in the development and expansion of streets and rail links, communication networks, water and power supplies will amount to around $40 trillion over the next 20 years. And all this will happen in times of tight budgets. But how?

Offering tailored solutions means not only exploring new technical paths, but also providing innovative and flexible financing options. Let’s stay for a moment with the example of optimized energy consumption for buildings. For many cities and communities, this is a major lever for reducing energy consumption and carbon emissions. And even though municipal funds are in short supply, cities can reduce their energy expenses at no cost and at the same time modernize their buildings.

With a so called energy performance contracting plan, the customer is able to finance the necessary measures with their energy savings and operating costs guaranteed by a company like Siemens, without paying a single cent out-of-pocket. The investment risk is eliminated through contractually assured savings potential. To date we have already optimized some 6,500 buildings worldwide using this business model. The result: savings of $3 billion and a CO2 abatement of over 9 million tons, which equals the annual CO2 emissions of a city like Munich. For cities, the message is simple and appealing: Green building renovation can be done at no cost.

But this is just the beginning. In the coming years, Masdar City in the desert of Abu Dhabi will demonstrate what is already technologically possible. It will be the first CO2-neutral city in the world and use so little energy that all its needs can be locally produced without net emissions – for around 40,000 residents and up to 50,000 commuters.

These efforts are not just about the application and optimized integration of existing technologies, but also about developing visionary ideas for the future of cities. Here, there are no limits to the creativity of the researchers. For example, multi-story greenhouses in cities could help supply the growing world population with food and slow global warming. New facade coatings could utilize the principle of photosynthesis and in the future directly extract carbon dioxide from the atmosphere and convert it to other organic carbon compounds like methanol. And ceilings and walls in houses could be lined with illuminating synthetic materials to provide an innovative lighting experience while consuming only one-fifth of the electricity needed by conventional light bulbs.

These examples show that today’s technologies can set many levers in motion to move cities toward eliminating their CO2 emissions. If urban developers rigorously adopt environmental technologies, they could achieve a viable balance between growth and the sparing use of resources. And this isn’t necessarily linked with higher costs, but in fact can help save costs over the long term.

One thing is clear: As evidenced in the past and made clear in the present, progress is being defined and shaped by and in cities around the world. The transition to a culture of sustainability will be the great challenge in the coming decades. This certainly doesn’t mean that we must do without, but rather that we be prepared to think of new possibilities and remain open to new ideas. This transition can succeed only in and with cities. Siemens has always seen itself as a technology pioneer. And we see the mayors and urban planners of cities around the world as our partners and pioneers of the future.

Roland Busch is a member of the Siemens AG managing board and CEO for the Infrastructure & Cities Sector globally.

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