NOTE:  This is the fifth in a six-part series of Policy Updates on the OECD Territorial Review:

Part 1: Assets and Challenges

Part 2: Workforce

Part 3: Innovation

Part 4: Transportation and Logistics

Part 5: Green Growth

Part 6: Governance

The Organisation for Economic Cooperation and Development (OECD) recently profiled a broader Chicago "mega-region" that includes northeast Illinois, northwest Indiana and southeast Wisconsin as part of its Territorial Reviews: Competitive Cities in the Global Economy series.  This Policy Update, our fifth in a series on the report, focuses on the OECD's analysis of green growth.

The OECD defines green growth as economic growth that minimizes negative impacts on natural resources and ecosystem services, which can be achieved in an urban area by increasing the sustainability of the existing urban economy and growing green urban sectors.  Recommendations for achieving green growth fall into two major categories: those supporting green employment sectors and jobs, and those improving the efficiency of the tri-state area’s buildings, water and waste infrastructure, energy grid, and transportation system.

The report highlights green sectors as a particular strength of the tri-state area, principally in sectors such as professional energy services, green building design, smart grid technology, wind energy and water purification and treatment. However, it outlines the need to better support and grow those sectors through providing tools for energy efficiency retrofits, investment in energy and water infrastructure, job training for energy, water, and waste-related sectors, support for an innovation ecosystem in green sectors, and greater regional cooperation on issues affecting green growth.

Map courtesy of the American Wind Energy Association via the OECD. The tri-state area has one of the largest concentrations of wind-energy component manufacturers in the US, and this sector has potential for continued growth. In 2010, Illinois added more wind energy capacity than any state but Texas

(For a closer look at the wind industry, see this map from GLWN, a supply chain advisory group and manufacturers' network.  Select the map's "Legend" link at top right and click the plus sign next to GLWN for more details.)

The report also provides a particular focus on the need to upgrade the tri-state area’s public transportation system and reduce congestion, citing increasing congestion and the condition of transit infrastructure as a threat to the its attractiveness to businesses over the long term. These points echo those found in the report’s Transportation and Logistics chapter. Funding and planning challenges are outlined, and creation of a tri-state plan to address funding and planning for major transit investments is recommended. The report recommends analysis of alternative funding mechanisms for transportation improvements and highlights value capture and congestion pricing as tools of interest. Transit-oriented development and similar land use strategies are recommended to capitalize on transit resources and shift commuting to transit. While the report recognizes that significant planning for transit-oriented development has occurred in the tri-state area, it indicates a need for TOD planning on a large enough scale to significantly impact transit usage. Supporting public transit through coordinated planning for land use, housing, and transportation is also a major recommendation of GO TO 2040. 

Many key recommendations of the OECD report coincide with those outlined in GO TO 2040, spanning chapters of the plan related to human capital, livability, and regional mobility. Also, as in the plan, the report stresses the need to apply solutions across jurisdictions and learn from successful approaches elsewhere in the tri-state area. The report pays significant attention to the existing built environment, highlighting need to improve the efficiency of existing water, energy, and waste systems as well as facilitate energy efficient retrofits through better access to financing tools and information, goals echoed in the Manage and Conserve Water and Energy Resources section of the plan. Similarly, both GO TO 2040 and the OECD recommend full-cost pricing for water and consolidation of water supply and wastewater treatment facilities.

The OECD also suggests several strategies in line with those in the Economic Innovation section of GO TO 2040 that will nurture industry clusters in green sectors, including increasing the commercialization of new technology, encouraging institutional and private sector partnerships for R&D, and increasing access to capital. The report emphasizes communication and partnerships across jurisdictions and industries are critical to the success of the tri-state area.

Image courtesy of the OECD. The report stresses the need to work across sectors and institutions to support an innovation ecosystem in green sectors, capitalizing on the benefits of economic clusters and fostering an environment that encourages cross-pollination and idea sharing.

The OECD also highlights the Energy Impact Illinois (EI2). This program grew from a specific recommendation of the Plan, and CMAP, the City of Chicago, and the City of Rockford recently partnered to create the EI2 to remove the key institutional barriers preventing more widespread investment in retrofits. Program components include tools to improve access to financing for retrofits, a marketing campaign to increase public access to information about retrofitting, and development of a workforce intermediary to align the workforce with jobs created by energy efficiency programs in our region. Information on the progress of this and other initiatives of the plan can be found in CMAP’s Implementation Report for 2010-2011.