Fuel prices have a direct impact on urban infrastructure. As is known, high fuel price can raise transportation costs, push up cost of living, clip consumer spend, eat up savings, drag down auto sales, scale down factory output /services and trigger job losses. Overall, economic growth will droop, thus, squeezing investment in infrastructure.
This apart, a less appreciated factor is that high fuel prices can affect housing construction in suburbs and trigger a domino effect on the general economy. So a recent call by urban development minister Kamal Nath for a vertical development of Delhi?by constructing high-rise buildings?though coincidental, is timely.
Suburban development seldom factors in the future cost of fuel (which is anyway unpredictable) and the chances of fuel wastage from traffic congestion. While highways will inevitably be built to connect the suburbs, the wide roads get badly clogged once development picks up on either side. So when petrol or diesel prices go up sharply, not only that suburban commuters to the cities will cut down on their travel but prospective buyers or tenants of suburban properties will also keep off the suburbs. This will in turn pull down the property market in suburbs, defeating the very purpose of suburban development to de-congest cities.
An answer to this problem is development of self-contained compact cities which economise on land usage, floor space and energy consumption and support sustainable development.
A recent OECD publication, ?Compact City Policies, A Comparative Assessment? tells why land use should be kept low; ?Land consumption is increasing more rapidly than population growth. Built-up areas expanded by 171% worldwide between 1950 and 2010, whereas the world population grew by only 142%….In the United States, an area of about the size of the state of Pennsylvania could be absorbed by urban development between 2000 and 2050…? Though no such estimates are available about emerging India?s urbanisation, it can be presumed that land use for urbanisation will happen at an unprecedented scale in India in the next 30 years.
Floor space can be used optimally by verticalisation of cities. This will also stimulate economic growth, while saving on land and fuel. The OECD study says ?the current demographic trend will require urban space to be used more cost-efficiently and to be well adapted to the elderly and to smaller households.? A global trend among the elderly is to opt for small apartments in the city centre?which has all amenities?than to live in a spacious house in the suburbs that requires long travel. This is logical since in most houses the elderly couples are left alone.
Minimal use of land, space and fuel (via reduced travel) will automatically make for sustainable development.