Making Cities Smart and Sustainable

87 CHAPTER 4 4: Making Cities Smart and Sustainable Making Cities Smart and Sustainable k urt Steinert, reVital marom, PhiliPPe riChard, GaSPar Vei...
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4: Making Cities Smart and Sustainable

Making Cities Smart and Sustainable k urt Steinert, reVital marom, PhiliPPe riChard, GaSPar VeiGa, and louiS witterS, Alcatel-Lucent

will increase markedly. This situation is complicated by the fact that the ability of families to care for ageing members is decreasing. Technology is required to provide better, safer health care and to help ensure an improved quality of life, particularly as people live longer and the percentage of the population working to support them decreases, largely because of the increasingly broad geographic distribution of many families. The rapid urbanization of the past half century has been the primary driver of global climate change, and that trend is expected to accelerate as cities expand. This is because the increase in economic activity, industrialization, and consumption associated with cities brings with it a transformation of the physical and natural environment that, for the most part, cannot be undone. This conclusion is based on simple math: Cities consume 75% of the world’s energy and produce 80% of its greenhouse gas emissions.4 The vast majority of this comes from the burning of gasoline and diesel fuel for automobiles and trucks, with the remainder committed to the generation of electricity to heat, cool, and light our homes and to run electrical appliances and other technology. Clearly the question of how best to manage the use of resources in cities and address the needs of a growing and ageing population, all while reducing the urban carbon

footprint, are daunting challenges. Making cities smarter has become a necessity. Innovation—particularly in the areas of regulation, private-public partnerships, and technology—will be absolutely critical in this process.

Innovation and smart cities Innovation—which is broadly defined here as ‘the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations’5—will in many ways form the foundation for the establishment of smart cities and the realization of a more sustainable approach to growth. The concept of the smart city is a framework for a particular vision of modern urban development that recognizes the growing importance of information and communication technologies (ICT)—broadly characterized here as ‘networks’— in driving the economic competitiveness, environmental sustainability, and general liveability of cities. Smart cities by definition address all of the challenges noted above. The concept of smart cities goes beyond the purely technological aspects of urban development. They are typically referred to as ‘digital’ or ‘intelligent’ cities, terms that encompass social and environmental dynamics.


Data from the United Nations report World Urbanization Prospects, published in 2009, indicate that urban populations will grow by an estimated 2.3 billion over the next 40 years, and as much as 70% of the world’s population will live in cities by 2050.1 This growth is not limited to established urban centres and ‘megacities’ in developing markets—in fact, small and mid-sized cities in emerging markets have been driving the acceleration of urban growth for some years. Between 1990 and 2000, urbanization in developing regions was characterized by the emergence of new cities that did not exist prior to 19902—the point being that urbanization is a pervasive trend. The rapid growth of cities has in many cases been accompanied by the aggravation of many of the challenges associated with urban living—the protection of public safety, traffic and transport management, upkeep of public infrastructures, waste disposal, delivery of basic public services, and so on. Accompanying this growth in population will be a dramatic shift in demographics. Each year, the percentage of people over the age of 60 increases—by 2050 the number of people over the age of 60 is expected to triple,3 and will outnumber children under 15 for the first time in human history. This general ageing of the population means that the need for healthcare and elder care infrastructures to serve the elderly

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A team of researchers from a number of European universities, jointly leading the European Smart Cities project, suggests that smart cities can be defined by measuring relative progress in a number of categories,6 including smart governance (democratic processes and inclusion), smart people (education), smart environment (environmental sustainability/energy consumption), smart mobility (transportation), smart economy (regional/global competitiveness), and smart living (health care, social services). Innovation can be applied to the development of smarter cities in all of the above dimensions, in a variety of ways. Examples include:


• Smart governance: Efficiently interconnecting governmental organizations and administrations, eliminating obstacles to communication and collaboration, improving community access to services (first responders, local officials, and service organizations, etc.), improving overall access to governmental services on the part of average city residents, and improving organizational processes to be more efficient. • Smart people: Increasing inclusion by delivering a more consistent educational experience in both urban and rural areas through the use of e-education solutions (remote learning and collaboration) to help eliminate rural/urban educational disparities. • Smart environment: Dramatically reducing energy consumption through the application of novel technology innovations while promoting energy conservation and material re-use.

Figure 1: Smart cities/smart services interconnection model

Public services

Smart city operational control centre

Smart public safety

Smart cities broadband network

Citizen engagement

• Smart mobility: Promoting more efficient and intelligent transportation systems—effectively leveraging networks to ensure more efficient movement of vehicles, people, and goods, thus reducing gridlock; and promoting new ‘social’ attitudes such as car sharing, car pooling, and car-bike combinations. • Smart economy: Creating business opportunities, providing broadband access for all citizens and businesses, helping maintain population in rural areas by leveraging networks to expand business opportunities outside the city centre, and using electronic means in business processes of all kinds (e.g., e-banking, e-shopping, e-auction). • Smart living: Access to highq u a l i t y h e a l t h c a re s e r v i c e s

Smart infrastructure

(including e-health or remote healthcare monitoring), electronic health records management, home automation, smart home and smart building services, and easier access—via the Internet— to social services of all kinds.

Enhancing the urban lifestyle through innovation The vision of the smart city is based on the notion of leveraging ICT and public-private partnerships to lay the foundation for a range of innovations, both technical and sociopolitical. This foundation requires two primary elements. • Smart cities public-private partnerships: The establishment of a social, political, and business environment that is supportive of innovative approaches to

• Smart cities broadband networks: The implementation of an open broadband network that the entire community—organizations, companies, and individuals—can use, independently or through creative collaborations, to develop innovative approaches to particular social challenges and/or to establish new businesses and business models.

How technology can help: The smart cities broadband network Fundamentally, the establishment of a smart city depends on ubiquitous connectivity. Individuals, companies, governmental and non-governmental organizations, educational institutions, healthcare and public safety providers, objects (buildings, sensors, and fixed and mobile devices of all kinds) and utilities—and all the various processes associated with a city—need to be able to interact seamlessly, in real time, to share data and content safely and securely. In the truest sense, the smart cities broadband network is the ‘brain’ of the smart city. The interconnections among the network and city services are illustrated in Figure 1. But what does this mean, exactly? Today most urban centres, particularly those in developed markets but increasingly those in high-growth environments as well, are webbed

by a latticework of networks of all kinds, from both fixed and mobile broadband access systems to optical transport and metro networks to private business, educational, and governmental networks, all fed by and interacting with the Internet. In some parts of the world suburban and rural areas are also increasingly connected. How is the smart cities broadband network different? Today’s networks lack key elements that would support features that could be described as ‘intelligence’. Although networks get more and more sophisticated every day, there is enormous potential that can be tapped by embedding a range of instrumentation into networks and employing more finely tuned management and control capabilities. These enhancements will make them smarter than networks currently available. Just as importantly, networks can and should become much more efficient so that they are less costly to operate and require less power. What is needed is a network that can deliver the level of bandwidth required by any given service or application at the absolute lowest cost per bit, coupled with the increased intelligence needed to support the rapid creation and delivery of a wide variety of new services quickly and easily. In essence, smart cities need networks with the stability, resiliency, and security profile of telecommunications networks, combined with the software-driven programmability of the Web, so that they are easy to customize in order to address requirements from different strategic government and industry sectors. All this must happen while consuming a small fraction of the energy they consume today. The first challenge is to move from multiple networks (mobile,

wireline, first responder, private enterprise) to a fully converged network—that is, all services offered from a common infrastructure—that operates using Internet Protocol (IP), the language of the Internet. The second challenge is to ensure consistent, high-quality broadband connectivity for individuals, businesses, institutions, and governments alike. It is critical that smart cities leverage the range of ‘last mile’ options (the connection between the network and homes and offices), whether that connection is over fibre, copper (xDSL), or wireless (2G/3G/4G). The third challenge is to move from multiple service control and management processes to a single, converged network and policy management function. It is vital that there be a methodology to ensure that the services that are absolutely essential get the highest priority in terms of routing and resource allocation. All of this implies a major transformation that can encompass commercial service provider networks and municipal or regional networks, such as Australia’s planned NBN Co. and Singapore’s OpenNet. Furthermore, it implies establishing close interconnections with a variety of private or public networks that are currently owned and operated by governments, educational institutions, public utilities, and more. Ultimately, the vision for the smart city broadband network is a central hub that houses a range of fundamental network capabilities, and that can then be accessed—via ‘spokes’—by organizations and institutions that are supporting various public and commercial functions, be they delivery of content (movies, TV, music, games), social services (e-health, educational services),


city planning and management, including an open broadband regulatory framework, mechanisms for public-sector intervention, business models to support the required investment, and methodology for encouraging and fostering partnerships that can deliver innovative solutions to the community.

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Figure 2: Conceptual network architecture of smart cities broadband network

Customer Premises

Converged Access Network

Converged Backbone

Community Operation Control Centre Command & control centre


Multi-service backbone (WDM, SDH/SONET, IP/MPLS, Ethernet)


Microwave Mux

OSS: Network management centre

Business & government

Converged wireline access

Digital home

Converged RAN

Resource management centre

Service providers Data centre Integrated network management


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Note: Converged RAN = converged radio access network; IP/MPLS = Internet protocol/multi-protocol label switching; LAN/WAN = local area network/wide area network; Microwave Mux = microwave multiplexing; OSS = operational support systems; PMR (TETRA, P25) = professional mobile radio (used by police and other first responders); SDH/SONET = synchronous digital hierarchy/synchronous optical networking; WDM = wavelength division multiplexing.

transportation (traffic management, train signalling, parking systems), and so on. A proposed architecture for the smart cities broadband network is illustrated in Figure 2.


Innovating regulation to drive urban transformation The shift to smart cities broadband networks creates a range of issues for all stakeholders—industry, government, regulators, and constituents. The issues can be related to the regulatory framework, the need and mechanisms for public-sector intervention, and the business models to support the required investments. Governments—particularly Chief Information Officers for local authorities—are actively exploring the benefits broadband can bring

to a wide array of public services as well as exploiting their use as a driver for economic development. Governments have understood the need to boost urban economies in a sustainable way and to help foster more favourable economic and technological environments in rural areas. They have reacted by launching a set of broadband stimulus incentives intended to spur innovative projects.7 These incentives:

through e-education and e-learning services so that regional, rural, and remote communities have equal access; • increase the use of broadband to improve public safety capabilities for emergency and disaster response both within and across territories; and

• create a more favourable environment for innovation by enabling the development of new, smarter community ser vices such as e-health, e-government, e-business, and intelligent transport;

• put in place smarter ‘infrastructure’ to provide accurate, real-time information to fuel the abovementioned services, including capabilities such as closed circuit television systems, smart metres, traffic congestion monitors, and sensors of all kinds.

• create a more favourable environment for citizen engagement and inclusion by extending access to information and knowledge

G ove r n m e n t s a l o n e c a n not address or implement all the challenges inherent in designing, deploying, managing, and financing

and to foster competition among telecommunications service providers. In a recently launched ‘public consultation on state aid for broadband networks’, the EU Commission is examining the legal framework of state aid,9 and whether to allow local authorities to fund—partially or wholly—next-generation fibrebased access networks even in areas where the market already delivers classic broadband services. In each of the instances noted above, national or regional bodies are creating the regulatory environment and funding stream needed to support the development of smart cities broadband networks, while local government authorities take the lead in developing new services applications and in identifying and realizing broadband coverage and bandwidth needs. Local communities are considered by many experts in the field to be in the best position to aggregate public services (e-education, e-health, etc.) and to ensure their availability to citizens through the Internet. Local authorities also have a direct interest in broadband coverage to attract enterprises, particularly the small to medium-sized enterprises that are drivers of economic growth.

Innovating business models: Smart cities’ public-private partnerships The ability of smart cities to offer broadband connectivity—and associated smart services—to all city residents is limited by factors that include the cost of the deployment, operation, and maintenance of the network; the availability of wireless spectrum; physical access to homes and office buildings; and more. To

overcome these challenges, innovative approaches are required. Unsurprisingly, one of the biggest challenges is the financing (capital and operational costs) of the smart cities broadband network. A number of different approaches have been proposed by national and regional governmental bodies and various industry stakeholders. These typically involve sharing some resources—in some kind of public-private partnership arrangement—among various types of service providers, including retail and wholesale telecommunications companies, utilities, large enterprises, and governmental authorities. The primary approaches proposed are: • Passive infrastructure sharing: This is the sharing of physical assets among service providers, covering such things as cell phone towers, cell sites, ducts and conduit for optical fibre, electrical power supplies, shelters to house the equipment, and cooling systems. Infrastructure sharing helps to reduce the expense of providing services by minimizing capital and operational costs. This practice is already in fairly widespread use today. • Active infrastructure sharing: This is the sharing of the ‘active’ elements of a network, such as radio access network (RAN)—for wireless base stations and antennas—as well as data transport and backhaul systems and fibre optic lines into homes and businesses. Although active sharing provides the biggest benefits in terms of cost reduction, improved broadband connectivity, and wireless coverage, it is difficult to establish and implement because it requires close integration and


such networks, for the simple reason that they typically have neither the knowledge (particularly ICT skills and experience) nor the financial resources to take on these kinds of large-scale, complex projects. The success of smart cities will depend on innovative partnerships among various parties, such as: a trusted technological partner(s) to implement and fund (in part or in whole) the deployment of the network; a combination of federal, regional, and local governmental and regulatory bodies (to drive the establishment of an open broadband regulatory framework);8 and local businesses and civic organizations that can access the network and create the framework necessary for smart cities. Open broadband networks are a relatively new phenomenon, and regulations concerning these networks are changing at a very rapid pace and in a fairly irregular fashion. As a result, the need to provide more consistent guidance to local authorities has been recognized by many federal and regional governments around the world. National governments are increasingly taking steps to encourage increases in broadband coverage. Among these measures, those directed towards giving local authorities the ability to take an active role in broadband backhaul and access roll-outs have been most prominent. For instance, in the United States of Amer ica, the economic recovery plan pursued by the Obama Administration has encouraged local authorities to engage in the roll-out of broadband networks and has provided funding packages to facilitate this effort. In northern European countries, municipalities and utilities have invested heavily in backhaul and open access networks to increase very high speed coverage

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Figure 3: Potential savings from ICT application to energy savings in other sectors

If b u s in Gtons CO2

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Potential direct telecom equipment energy savings by 2020

Zero growth line




Tackling the other 98%

By enabling emissions reductions in other industry sectors, the beneficial impact of ICT is more than 10 times its footprint

Indirect application examples Smart utilities Smart transport Smart buildings

Source: Alcatel-Lucent analysis of GeSI SMART 2020 data.


collaboration among independent companies that are often competitors. Also, regulations, laws against anti-competitive practices, spectrum availability, and network capacity limitations add complexity to the challenge of active sharing. • Full separation: A central element of many proposed smart city initiatives, full separation involves the establishment of independently operated passive networks and active networks, which then can be accessed by retail service providers (and presumably governmental or quasi-governmental organizations) on a nondiscriminatory basis. The passive and active network operators will offer only wholesale services, while operationally separate retail companies and public institutions

will deliver services to households and businesses. In some cases, national or regional governments have gone so far as to deploy their own network infrastructures—operated on a model similar to that of public utilities—that can be used to deliver a range of public and private services. Others have taken the less radical step of encouraging cooperation through measures such as adopting master plans that can facilitate more widespread broadband access (duct installation in waiting mode, dark fibre roll-out) and mapping available infrastructures in the region.

The environment: Smart cities’ sustainability In today’s world, sustainability increasingly means reducing carbon

emissions as well as achieving durable economic growth. Although some may be tempted to portray economy and environment as mutually exclusive tradeoffs, they can, and indeed must, be seen as a single imperative. Growth that is noxious to the environment would be clearly unsustainable, as would environmental initiatives that fail to make economic sense. More than any other industrial sector, ICT industries sit at the intersection of economy and environment, and by extension at the heart of the smart city. ICT industr ies hold unique potential in the drive towards sustainable growth, not only as engines for employment and creation of wealth but also as enablers of a lowcarbon economy. According to one recent study,10 the ICT sector can cut greenhouse gas (GHG) emissions by as much as 15% (i.e., 7.8 Gtons CO2e) by 2020—five times the

Figure 4: Savings potential: 15% of global emissions (7.8 Gtons CO2e) in 2020

Network-related savings (53%)

Industrial processes (12%)

Transport optimization (8%)

Other (8%)

Smart logistics (19%)

7.8 Gtons CO2e

Smart grid (27%)

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Smart buildings (21%) Teleworking (3%) Video conferencing (2%)

Source: Alcatel-Lucent analysis of GeSI SMART 2020 data.

support environmentally responsible behaviour. ‘With nearly 70% of businesses with revenues of US$1 billion or more planning to increase spending on energy efficiency and environmental sustainability within the next 12 months, far-reaching opportunities exist for the ICT sector to be a critical element in the drive to lower emissions’, notes the International Chamber of Commerce (ICC).11 An analysis of potential emissions savings from smart ICT solutions is found in Figure 4.

Examples of smart ICT innovations and their low-carbon effect So where are the areas that ICT can offer dramatic energy efficiency improvements? A few particular sector examples are explored below.

• Smart grids: These grids comprise software and hardware tools that enable electricity generators to route power more efficiently, t h u s re d u c i n g p e a k c a p a c ity requirements and enabling real-time, interactive information exchange with customers. Globally, smart grid technologies could reduce carbon emissions by 2.03 Gtons CO2e, worth €79 billion. • Smart logistics and transport optimization: After energy, the transport sector is the secondleading source of global GHG emissions. ICT solutions can help reduce transport needs and streamline logistics. For example, ICT solutions can improve logistic networks, making it easier to mix transportation modes and select the most energy-efficient type of transport. They also help


sector’s own footprint—with collateral economies of up to US$750 billion. The combined environmental and economic benefit can be achieved through innovative communications applications and solutions in areas as diverse as building design and maintenance, transport and logistics, electricity generation, distribution and consumption, travel substitution, product dematerialization, and innumerable business process streamlining efforts. These emission improvements are illustrated in Figure 3. ICT companies can further help organizations from other sector s and individual consumer s reduce emissions by increasing energy efficiency, reducing energy use, ‘virtualizing’ activities that currently require physical resources, and managing other scarce resources. They can also help by providing the information and analysis tools that

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optimize routes and reduce inventory needs, and can encourage more energy-efficient driving. As fuel prices rise, logistics companies will accelerate their adoption of ICT-based energy efficiency solutions, which will have a huge impact on reducing their emissions. Worldwide, GHG emissions savings from smart logistics could total 1.52 Gtons CO2e by 2020, with energy savings worth €280 billion.


• Smart buildings: Technologies to help make the design, construction, and operation of buildings more efficient, for both existing and new properties, represent an enormous opportunity. ICT-dr iven solutions include, for example, building management systems that run heating and cooling systems according to occupants’ needs or software that switches off all personal computers and monitors after everyone has gone home. Building energy management systems can reduce energy consumption by 5 to 40%. Globally, smart building technologies could eliminate 1.68 Gtons CO2e of emissions, worth €216 billion. • E-substitutes: Communications technologies such as teleconferencing and videoconferencing are helping greatly reduce GHG emissions from business travel. Research by the University of Bradford and Sustain-IT showed that the use of teleconferencing solutions by BT eliminated 717,494 face-to-face meetings.12 With each conference eliminating an average total of 267 miles of travel, the report shows that each teleconference economized by at least 55 kg of CO2. Annual net

savings came to at least 53,552 tons of CO2. ICT can also help businesses greatly reduce carbon emissions through dematerialization, which involves replacing material documents such as paper documents or CDs by electronic ones or media, such as Internetdelivered documents and MP3 music files. Because climate change and the eco-sustainability challenge are too broad for any single organization, it is essential that an open, collaborative, innovative approach prevails. The challenges of driving down energy consumption in ICT and leveraging ICT to advance green advantage are areas around which a variety of research consortia, partnerships, standards bodies, industry groups, and other collaborative efforts have arisen. An example of these efforts is the GreenTouch TM energy efficiency initiative. A global research consortium, GreenTouchTM brings together leaders in industry, academia, and government labs around a shared goal: to make communication networks 1,000 times more energy efficient. By reinventing the network, GreenTouchTM will lay the groundwork for tomorrow’s sustainable networks. To benefit from the extraordinary leverage offered by ICT— beyond developing sustainable networks—government leaders will need to define policies that support the ICT sector’s potential as a driver of sustainable growth. Policy makers, regulators, and ICT industry leaders must work together to define the right framework and conditions that will support the ongoing development of innovative ICT solutions. Both as investors modernizing public services and as pioneers and supporters of those innovative initiatives

that require broad collaboration and incentives to succeed, government and public authorities play a crucial role. All of these ICT innovations, and many others, are the lifeblood of the smart cities. They are absolutely central to their successful implementation.

Conclusion People around the world are moving to cities in greater and greater numbers, following the natural inclination to improve their economic circumstances. As the population in cities increases—and ages—it gets increasingly difficult for municipal governments to deliver basic services, let alone ensure a high quality of life for city residents. Even more troubling, the increasing concentration of humanity in urban environments is bringing about profound, largely damaging changes to our biosphere and climate. Current rates of growth and resource consumption are fundamentally unsustainable. The smart city offers a vision of how to resolve some of these vexing challenges by applying ICT to mitigate the impacts of rapid urbanization and the associated follow-on effects. It also presents an opportunity to rethink how we manage growth, both regionally and locally. As importantly, by making cities smarter, we have the opportunity to reduce energy consumption in a truly dramatic way. The success of smart city initiatives will require the creative application of technology coupled with novel public policy initiatives. It demands levels of collaboration among private and public institutions far deeper than any seen to date. It also requires the extensive

and creative application of innovation in terms of technology, public policy, finance, and governance. Smar t cities by definition will involve strong public-private partnerships, engaging the active participation of governments (regional and local), private companies, educational and research institutions, entrepreneurs, and civic organizations. There is a tremendous opportunity before us, if we act smartly (and quickly). Urbanization cannot continue on its current path. The smart city vision offers an opportunity to chart a more sustainable course and to potentially eliminate some of the inequalities in broadband access that exist today. This is the right time to fashion a more sustainable, inclusive, and economically vibrant approach to urban growth. Let us take advantage of it.



Giffinger, R. C. Fertner, H. Kramar, R. Kalasek, N. Pichler-Milanovic, and E. Meijers. 2007. ‘Smart Cities: Ranking of European Medium-Sized Cities’, report produced by eu.

United Nations, World Urbanization Prospects, 2009.


Harter et al., 2010.


United Nations, World Urbanization Prospects, 2009.


United Nations, World Urbanization Prospects, 2009.


OECD and European Communities, 2005.


Giffinger et al., 2007.


Some government initiatives around broadband include the American Recovery and Reinvestment Act of 2009, H.R, 111th Cong. (2009), Australia’s National Broadband Network, the United Kingdom’s Digital Britain, Singapore’s Next Generation of National Broadband Network, and China’s Social and Economic Development Plan – III, 5 March 2006, among others.


European Commission, 2003.


European Union, 2009a, 2009b.


The Climate Group, 2008.


ICC, 2010.


Alcatel-Lucent analysis of GeSI SMART 2020 data.

European Commisson. 2003. Guidelines on Criteria and Modalities of Implementation of Structural Funds in Support of Electronic Communications. SEC (2003) 895, available at consultation/telecom_en.htm. European Union. 2009a. ‘Information from European Union Institutions and Bodies: Temporary Community Framework for State Aid Measures to Support Access to Finance in the Current Financial and Economic Crisis’. Official Journal of the European Union 22 January 2009, C 15/1, available at http:// legislation/atf_en.pdf. ———. 2009b. ‘Community Guidelines for the Application of State Aid Rules in Relation to the Rapid Deployment of Broadband Networks’, available at http://ec.europa. eu/competition/consultations/2009_ broadband_guidelines/guidelines_en.pdf.

Harter, G., J. Sinha, A. Sharma, and Dave, S. 2010. ‘Sustainable Urbanization: The Role of ICT in City Development’. Booz & Company Inc., available at uploads/Sustainable_Urbanization.pdf. ICC (International Chamber of Commerce). 2010. ‘ICTs and Environmental Sustainability’. Discussion paper, 6 October 2010. ICC Commission on E-business, IT and Telecoms. OECD and European Communities. 2005. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, 3rd edition. Paris: OECD and European Communities (Eurostat). United Nations. 2009. World Urbanization Prospects: The 2009 version, available at http://esa.



The Climate Group. 2008. SMART 2020: Enabling the Low Carbon Economy in the Information Age. A report by The Climate Group on behalf of the Global eSustainability Initiative (GeSI). Creative Commons, available at Smart2020Report.pdf.

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