Cities in the UK are great places to live. But they also face challenges: congested roads, polluted air, hotter summers, and ageing infrastructure. And with local authority budgets being chopped, resources to sort out these problems are scarce.

As well as suffering negative environmental impacts, cities are a major contributor to those very problems. Globally, cities occupy 0.5% of the world’s land area, consume 75% of natural resources, and account for 80% of global greenhouse gas emissions.

City administrations, businesses, and third-sector organisations have been exploring how they can harness smart cities approaches to solve complex urban challenges.

Digital technology is becoming pervasive, embedded in buildings, in vehicles, in infrastructure. Nearly everyone carries a smart phone around. This allows us to understand the city better and interact with it differently, with potential sustainability benefits.

There are obvious gains in efficiency. Tracking how people move, how energy is consumed, and how resources flow, can allow better management of infrastructure and reduce wastage. City lighting, for example, can shine when, where, and how people actually want it.

And pervasive connectivity also brings dynamic, positive feedback loops. Navigation Apps like CityMapper not only help people to move around cities in low-carbon ways, they also provide a rich source of data that can be used to optimise the system or provide new services, like smart-buses.

The growth of the Internet of Things will mean that these measuring and management systems will increasingly operate in real-time, allowing smart grids to balance energy supply and demand or nudging drivers and cyclists away from areas of high congestion or bad air quality.

Virtualisation of products and services can bring dematerialisation and less demand for production, storage and travel. Just as Spotify replaces the trip to buy a physical disk, MOOcs allow the teaching to come to the student, while remote diagnostics can save multiple trips the clinic.

Smart city tools, can also change behaviours and attitudes.  Digital platforms are enabling the sharing economy – car clubs, co-working, peer-to-peer exchange. Energy Apps are allowing people to interact with their central heating. Making walking or cycling options easier are can embed sustainable behaviours.

Such changes will not, however, happen, automatically. There can be rebound effects: if energy is cheaper, people value it less; if congestion decreases, people drive more. There can be displacement effects, spreading demand more efficiently across time and space may increase the total load. And Connectivity in itself may mean we just move more and consume more. For example on ‘Singles Day’ in China last year Alibaba recorded $25.3 billion of sales within 24 hours, 80% on mobile phones.

To make the sustainability gains a reality will require:

• policy underpinning, and dynamic nudge activities;
• new financing mechanisms to capture the value of externalities and urban public goods;
• technology development to focus on pressing planetary issues rather than more and quicker ways to get a pizza 24/7;
• public authorities and citizens to have the skills to engage with and shape smart technologies.

The need for these solutions is pressing. The global market is immense. And there is a triple prize: growing our businesses, protecting our environment, and making our cities better for everyone.