Incentives and regulations condition and bend our behaviours. The same is true for norms and values, let alone laws. The market choices offered determine what we do. Technology shapes what we do and how we do it. Many of these behaviour shapers are etched into operating manuals, codes or guidelines. We are never as free as we think.
The knee-jerk reaction that changing behaviour equates to social engineering is ill-considered. Thousands of ways to effect behavioural outcomes are employed to make civilization work. For example, red traffic lights tell us what to do, as do road markings or safety codes, yet we do not dismiss these measures as social engineering. Reforms in an incentive system, like congestion charging in London, change behaviour. In the case of congestion charges, it has encouraged walking and cycling and discouraged car use.
It is better to encourage behaviours through incentives rather than invoking stipulatory regulations, but sometimes things are not moving fast enough. Living sustainably is one area: we guzzle far too much. Most people are not aware of the deeper implications of their consumption. This requires either more dramatic incentives, for example tax rebates on sustainable fuels, or creative regulation. Emscher Park has one of the most stringent and developed systems of environmental regulation in the European Community, and, in contrast to several other countries in the community with strict environmental laws, the regulations are also actively enforced.37 Emscher, once the mining centre of the Ruhr, used its environmental degradation as a spur to reinventing its economy. It applied very high standards which local industry had to meet, and in meeting these standards industry developed innovations. This contributed to creating the environment-healing industries cluster centred around Dortmund Technology Park, a sector within which it is estimated that 50,000 people work. By the time the rest of the world caught up with these standards, the region had already benefited from its 'first mover' advantage.38
Ironically, Emscher cities such as Dortmund, Bochum, Gelsenkirchen, Essen and Unna are twinned with their once industrial mining Yorkshire counterparts in Britain - Leeds, Sheffield, Bradford. The contrast could not be more striking. Emscher, a powerhouse of structural renewal, sought to create culture change without erasing memory. Witness the transformation of the Duisburg-Meiderich steel works. A torch-lit guided tour at night through the gargantuan installations of the former works only dimly lit by Jonathan Park's coloured light installation bends the perception. Emscher Park has attempted to innovate, while maintaining consensus, and to adopt an 'incrementalism with perspective' approach to ensure that eco-thinking was deeply embedded. The 10-year IBA Emscher Park project regenerated the river system, created a chain of 22 science and technology parks, refurbished or built 6000 new properties according to high ecological and aesthetic standards, and found radical new uses for former mines.39 Its story was simple - turn a mining area into a landscape park. Conceptually, the Yorkshire region was simply not at the same level, partly because it did not have the levers to generate a vision beyond the mundane.
Some British politicians understand what is at stake but have lost the moral high ground and have not delivered this level of quality. In Britain one senses that we still need to 'convince the man at the treasury' that there are other ways of using resources better. Their concern is with productivity and they find it difficult to think in feedback loops and spin-offs. This treasury approach stops smart thinking about investment and, with its particular form of risk aversion, makes it difficult for public bodies to behave in long-term ways. Often there seems a confusion between investing and spending. The fact that investment in social fabric has a financial payback later is forgotten.
To make matters worse, the system of incentives and rewards promoted by government in Britain until recently fostered a begging bowl mentality. Grant processes encouraged those who could claim they were in the worst situations, who were thus rewarded at the expense of those who could say they had improved the most.
What is required is a revolution in taxation. In relation to creative finance we can learn from the US, with its bond systems, tax increment financing, business improvement districts (BIDs) and land value tax.40 Crucially, these measures can be instigated by the city. The reason the US is able to innovate is that, as a federal structure, not everything is controlled from the centre. These mechanisms essentially allow future value increases of property to justify current borrowing by public authorities to create public realm improvements, ranging from new trams to public space, which will be repaid by increased taxes in the future. And with BIDs, contributions from the private sector are repaid by higher property values or increases in turnover in shops. For instance, bond systems are underwritten by expected increases in land values once the infrastructure has been improved. They are attractive to private investors as they provide an inflation-proof form of investment. Bonds have the great appeal of being evaluated in terms of the project and the capacity of the borrower by the investor, rather than relying on the judgement of politicians. Importantly, the requirement in the US to secure prior approval for issuing a bond in a ballot secures greater accountability. These institutional mechanisms remind us that while what the individual can do is worthy and important, it is limited compared to institutional change and systemic creativity.
While the US has been financially innovative in its urban development model, however, it is flawed in other ways: sprawl continues, cars dominate, and segregation and inequalities are endemic. It is more a warning than an inspiration. Many countries, including Britain, that look to the States perhaps could do worse than to look to continental European countries such as Holland, Germany and Spain, or to places like Hong Kong.
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