Sustainable area development: a matter of cooperation

3 min reading time

Cities that have set ambitious sustainability targets lack the legislative and regulatory power to actually achieve them. But is a change in legislation really all that’s needed to make a difference?

Recent research and recommendations by the Netherlands Environmental Assessment Agency – on sustainable heating[1] – and the Dutch Council for the Environment and Infrastructure – on the Supplementary Act on Land Ownership[2] – point out, and rightly so, that municipal policy instruments fall short when it comes to firmly anchoring sustainability at project level. It is difficult, if not impossible, to coerce public and private stakeholders into making the required investments. The key question, however, is whether improving enforceability would change the fact that area development is lagging behind in terms of sustainability. Could it be that the urgent call for new legislation is in fact a needless overreaction?

“For sustainable area development to succeed, it is therefore very important that public and private investment decisions are properly coordinated”

Improving sustainability performance

Measures to improve sustainability performance are difficult to implement within the current context of area development projects. There are two reasons for this. First of all, they often require a high level of collaboration: the Smart Thermal Grid, which is based on the exchange of heating and cooling, is a good example of this. Running this kind of district heating system requires agreements to keep it financially healthy and working optimally. It also requires agreements on all measures and investments that affect the supply and demand of energy in the entire area. In turn, these agreements are necessary to prevent lock-in effects and suboptimal performance.

The second reason is that sustainable solutions require high initial investments. Although they eventually do lead to lower costs, these savings only actually come to fruition when the area development has reached its full potential and/or ends up benefitting parties other than the investor. This is the familiar concept of ‘split incentive’. For sustainable area development to succeed, it is therefore very important that public and private investment decisions are properly coordinated.

Improving municipal policy instruments

In light of the two challenges mentioned above, calls for greater enforceability appear to be even more incongruous. It is, of course, useful to have the extra leverage of more legislative authority, as we have seen with the tightening of the Building Decree (Bouwbesluit) and the possibility of recovering costs from private parties via the Spatial Planning Act (Wet ruimtelijke ordening). But if we focus on improving policy instruments, we are in danger of forgetting that the specific challenges faced by sustainable area development are more about leadership, working together and collective knowledge management.

“We see that there is more mutual trust between partners when they are open about the organizational and cost-benefit constructions of their ‘piece of the puzzle’ in the overall development of an area”

It’s all about cooperation

In the course of recent projects relating to sustainable area development, TNO has repeatedly seen that sharing knowledge, collectively defining information needs and gaining expertise all play a crucial role in cooperation between private and public stakeholders or indeed between departments. We see that there is more mutual trust between partners when they are open about the organizational and cost-benefit constructions of their ‘piece of the puzzle’ in the overall development of an area. It reinforces a common language and provides a basis for achieving collective added value on the basis of a full understanding of the area’s potential and of each other’s role in achieving it. As a result of this thorough area analysis, stakeholders can come up with specific collaboration models, equalization mechanisms and contractual conditions to help them reap collective added value and improve sustainability performance.

In other words, the crux of sustainable area development is sound urban knowledge management, with municipalities taking the lead. And that is hardly something that requires a change in legislation!

What is sustainable area development?

Sustainable area development is the (re)development of urban areas, taking into consideration future power supplies, the use of smart mobility concepts, climate resilient services and the transition to efficient circular value chains.

Author

Alexander Woestenburg

[1] Elzenga, H. et al. (2017), Het handelings-perspectief van gemeenten in de energietransitie naar een duurzame warmte- en elektriciteitsvoorziening, The Hague: PBL.

[2] Raad voor de leefomgeving en infrastructuur (2017). Grond voor Gebiedsontwikkeling, The Hague: Rli.

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