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p. 12 of 57 BACK | NEXT I. The Changing Environment II. Driving Forces of Change Population Explosion Urbanization and Industrialization Income Growth and Inequality Technological Changes Governance Institutions, Policy, and the Market Toward Sustainable Development III. Options and Opportunities IV. Toward Policy Integration V. Call to Action

Asian Environment Outlook 2001 : II. Driving Forces of Change

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Urbanization and Industrialization

As the population of the Asia and Pacific region has grown, it has also become more urbanized. By 2015, the percentage of the population that is urban is projected to increase to about 48 percent in East Asia and about 46 percent in Southeast Asia and the Pacific. By approximately 2020, over half of Asia’s population will live in cities; the urban population will triple from 360 million in 1990 to over a billion in 2020 (UNDP 1999).

Among the fastest growing urban areas in Asia are the cities in South Asia, including Dhaka, Karachi, Kolkata, and Mumbai. By 2015, 20 cities are expected to have population greater than 5 million (see Figure 2-2). Unplanned and rapid urbanization in cities is taking its toll on human health. The speed of population growth in urban areas has outpaced the development of environmental infrastructure and of responsive urban governance in many large cities. Problems range from lack of access to clean water to poor air quality and inability to manage solid wastes. In 1996, only 3.6 percent of Metro Manila’s households were connected to a central sewer that discharges directly into Manila Bay (Evans 2001). One of the key infrastructure problems in urban areas is transportation. The number of vehicles is doubling every 7 years in the region, substantially increasing urban air pollution and energy consumption.

Unplanned rapid urbanization has been driven by rapid industrialization in most countries in the region, above all in the newly industrializing economies of East and Southeast Asia. Between 1965 and 1996, value-added in manufacturing in East Asia increased at an average annual rate of 9.7 percent, more than three times the world average (World Bank 1998). Over the past 30 years, industrial production has been a major source of pollution in urban areas and a significant driver of intensified resource use (see Box 2-2). Many factors contribute to the impact of industrialization on the environment, including the scale of economic activity; the sectoral composition of industry; the geographical distribution of production; the energy, materials, and pollution intensity of production processes; and the effectiveness of policy in regulating industrial activity. In general, the net effect of these factors has increased energy and materials use and industrial pollution in most DMCs. Rapid increases in industrial production have outweighed any positive benefits achieved through relative shifts into less resource-intensive industries as well as incremental improvements in environmental regulation and enforcement (see Box 2-3).

Rapid industrialization has occurred simultaneous with economic globalization in the Asia and Pacific region. Indeed, a growing share of the world’s industrial production now takes place within the region. Asia’s share of global output, for example, which was roughly 10 percent in 1950 and 30 percent in 1995, is expected to reach 55 to 60 percent by 2025 (Radelet and Sachs 1997). Growth in higher income economies typically involves geographical dislocation rather than elimination of resource-intensive activities within the context of extended global production chains. Foreign-direct investment was an important part of the industrialization strategies of many DMCs. Much manufacturing activity has relocated from OECD economies to the developing economies of East and South Asia. This manufacturing activity was associated with materials and pollution-intensive industries such as metal processors and leather tanners. In some cases, foreign investment involved second-generation technologies that are far less energy- and materials-efficient than those being used in OECD countries.

Under a “business-as-usual” scenario, rapid urban and industrial growth and related increases in transportation-and-consumption related emissions will likely lead to further declines in environmental quality in the large cities.

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