Director, International Environment Program
Harvard Institute for International Development
Harvard University

In this paper, I propose to focus on (a) identifying and analyzing emerging environmental challenges to global city regions driven largely by globalization; and (b) exploring public policy options and private sector involvement in turning these challenges into opportunities through innovative flexible instruments and mechanisms, including transferable development rights, integrated impact fees and betterment charges, environmental performance bonds, tradable offsets, privatized provision of public services, and private-public sector partnerships. A special feature of the proposed paper will be the integration of theory, empirical evidence, and field experience into a policy oriented, rigorous, but non-technical paper understandable and readily usable by private and public sector decision makers. Dynamic considerations such as path-dependence and lock-in effects of current policies on future options through capitalization into land values, urban sprawl and infrastructure development will be analyzed in simple terms with concrete examples. The central tenet will be (a) the anticipation and preemption of emerging environmental problems and (b) the least-cost mitigation and adaptation to those that do occur cost through efficient, provision, full cost pricing and flexible regulatory regimes. The challenge is to preserve competitiveness of city-regions in an increasingly globalized world while maintaining quality of life and long-term sustainability.