〜Smart vs. Compact: The Potential of Regional Cities〜
*This article is based on research and statistical data as of March 2026.
"A city (polis) is founded in order to live, and exists in order to live well" -- these words from the ancient Greek philosopher Aristotle in his Politics have taken on a more profound and real meaning than ever before, even thousands of years later. Climate change, resource depletion, and drastic demographic changes fundamentally threaten the very foundations of existence that are the premise for living well.
Sustainable urban development refers to "a comprehensive urban planning and infrastructure construction system that minimizes current environmental impacts (such as greenhouse gas emissions and resource depletion) without compromising the ability of future generations to meet their needs, while at the same time maintaining and developing economic and social vitality."
According to a recent systematic review (a study that classified 705 documents using BERT), sustainable urban development is not simply about protecting nature, but is a multifaceted approach consisting of five dimensions: environment/ecosystem, economy, society/culture, politics/institutions, and demographics.
In particular, when focusing on reducing environmental impact, the essential goal is to create "resilient communities" that are resistant to the risks of climate change by moving away from dependence on fossil fuels, introducing renewable energy, a circular economy, and improving mobility efficiency. Based on a wide range of information, this article thoroughly explains the "survival strategies" that cities will need to survive in the future.
1. History and Paradigm Shift: From Pollution Control to "Social Implementation of Decarbonization"
From its inception in the 1990s to its institutionalization
Looking back at the history of urban policy in Japan, sustainable urban development efforts began in earnest in the late 1990s with the aim of addressing pollution issues during the period of rapid economic growth and improving resource and energy efficiency.
Subsequently, amid a growing sense of crisis over climate change, the government selected 13 "Eco-Model Cities" in 2008 and began structural reforms to create a low-carbon society. Following the Great East Japan Earthquake in 2011, 11 regions, including those affected by the disaster, were selected as "Eco-Future Cities," and the perspectives of "regional energy independence" and "strengthening disaster resilience" were added. In 2012, the "Act on Promotion of Low-Carbon Cities (Eco-Town Act)" came into effect, establishing the legal foundation for municipalities to formulate plans to create low-carbon cities.
From the adoption of the SDGs to the "implementation phase" where huge amounts of capital will be mobilized
In 2015, the United Nations adopted the Sustainable Development Goals (SDGs), setting goals 11 and 13. Around this time, there was a shared international understanding that cities were the main battlefield for climate change countermeasures.
Then, in October 2020, the Japanese government declared its goal of achieving carbon neutrality by 2050. This led to the establishment of a 2 trillion yen Green Innovation Fund by NEDO, and the introduction of a carbon-neutral investment promotion tax system with tax deductions of up to 101 TP3T. The policy phase has clearly shifted from "awareness-raising" to "social implementation through massive capital investment."
2. Current state of urbanization around the world and Japan's position (comparative data)
Accelerating urbanization and population concentration in megacities
According to the United Nations' World Urbanization Prospects (WUP 2025), 451 TP3T of the world's population currently live in cities (361 TP3T in towns and 191 TP3T in rural areas). According to an IEA report, cities account for approximately 751 TP3T of global energy consumption and approximately 701 TP3T of GHG emissions. The latest data from JRC/EDGAR (2024) shows that global anthropogenic GHG emissions will reach a record high of 53.2 GtCO2eq, an increase of 1.31 TP3T from the previous year.
[Graph] Population size of megacities with a population of over 10 million (WUP 2025 estimate)
Despite the increase in emissions, Japan's GHG emissions recorded a decrease of -2.81 TP3T compared to the previous year, showing a downward trend along with the EU (-1.81 TP3T).
| Comparison items | Japan's data and position | Overseas data and trends |
|---|---|---|
| SDGs achievement level (SDR 2025) | Overall score: 80.66 (19th place) *Slow progress on the environment and climate change |
1st place: Finland (87.02) 44th: United States (75.19) / 49th: China (74.39) |
| Global Power Cities (GPCI 2025) | Tokyo: 2nd place overall *Rise to 7th place in the environmental field |
London: 1st overall (1st in the Green Cities Index) New York: 3rd place overall |
| GHG emissions change rate (24 years vs 23 years, JRC) |
-2.8% | EU: -1.8% China: +0.8% / USA: +0.4% / India: +3.9% |
Although Japan is doing well at the macro level, there are challenges at the local government level. According to reports from NEASPEC and other sources, although Japan has a high rate of planning, a lack of financial resources and specialized human resources to implement these plans is a bottleneck.
3. Dichotomy of Approaches: Compact City vs. Smart City
Optimization methods with opposing vectors
"Compact cities" and "smart cities" are frequently discussed in the field of sustainable urban development. While both share the common goal of reducing environmental impact, their approaches and initial investment characteristics are polar opposites.
| Comparison items | Compact city (physical concentration) | Smart City (Digital Extension) |
|---|---|---|
| Direction of approach | High-density urban functions are concentrated in this area. Physical restructuring to maximize travel efficiency. |
Maintain existing infrastructure and use IoT and AI Analyze and optimize data. |
| Installation cost (initial investment) | Expensive. Road network redevelopment and relocation compensation, etc. It involves large-scale construction work. |
Relatively low amount. From sensor installation, etc. Can be expanded in stages. |
| Desired specialists | Urban planning specialist, first-class architect, Civil Engineering, Consensus Building Facilitator. |
Data scientists, AI engineers, IoT architects, etc. |
Neither is superior to the other; the key is how to design a hybrid of these two to suit the characteristics of the region.
4. The pros and cons of implementation among stakeholders
During the process of social implementation, conflicts of interest will inevitably arise among stakeholders.
Strengthening international competitiveness and resilience
In addition to ensuring a reduction in greenhouse gas emissions, it is expected to improve the city's brand image and asset value. It will also be a powerful tool for attracting ESG funds, and the construction of a distributed microgrid will drastically strengthen disaster resilience, which is another major benefit.
Huge transition costs and social friction
Converting buildings to ZEB and rebuilding infrastructure will require huge amounts of funding, raising concerns that this will become a burden on citizens in the form of higher taxes and electricity bills. We also cannot ignore the risk that plans will become meaningless due to a lack of specialized personnel in local governments, and the social friction surrounding residential relocations that result from compactification.
5. Potential of local cities: Toyako Town, Hokkaido as a model
Trade-off between key industries and environmental impact
The effectiveness of sustainable urban development is particularly evident in rural areas that have their own unique natural capital. Hokkaido's economy depends on its abundant natural resources, and concentrated visits to tourist destinations create the issue of environmental impact due to overtourism.
Historical Legacy and Transformation into a "Zero Carbon Resort"
Hokkaido's settlements are widely dispersed, making it difficult to create a completely compact city. A more realistic approach would be to shift to EVs for mobility and to build a local production and consumption model that utilizes geothermal energy and biomass.
Toyako Town, the site of the 2008 Hokkaido Toyako Summit, is proactively working to preserve the environment and landscape, transitioning to a landscape administrative organization in April 2021 and formulating a landscape plan in June of the same year. There is significant room for development of renewable energy sources such as geothermal energy, and there is potential to rebrand the entire town as a "zero-carbon resort" through the conversion of existing infrastructure to ZEB.
Conclusion: Towards a strategy that combines "smart" and "compact"
In future urban planning, local governments will be forced to overcome the dichotomy between "smart" and "compact," and adopt a "phased hybrid strategy" that moves from data analysis to infrastructure reallocation.
Sustainable urban development is an "inevitable economic and infrastructural survival strategy" for all cities and local communities to survive.
A deep chasm exists between the macro goals set by the nation and the ability of local governments to implement them. We are past the stage where we left the burden of infrastructure renewal costs and energy transitions to the government. The best prescription for creating next-generation urban competitiveness is for local residents and businesses to use data themselves, accept uncertain new technologies, and proceed with painful consensus-building.
Related Links
- Ministry of the Environment: Regional decarbonization roadmap and transition strategy
- Ministry of Land, Infrastructure, Transport and Tourism: Overall overview of town planning and urban development policies
- United Nations Information Center: SDGs Goal 11 "Sustainable Cities and Communities"
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