How do you cool a desert city that uses no carbon emissions?

The picture above is in fact a giant air conditioner. Now this tower isn’t your typical AC – it doesn’t have a compressor or coils, nor the ability to destroy the ozone layer – despite its size. Instead, this 147-foot tall structure uses open and closed louvers and changing weather patterns to draw drafts down to the plaza of the Masdar Institute (a graduate school devoted to sustainability that bills itself as “the Green University”), which otherwise would be unbearable in the heat of summer.

The tower is also a monitor, tracking energy usage in the student apartments that overlook the plaza. When the tower’s LED beacon is blue efficiency standards are being met. When it’s red, someone’s AC is blasting. This is just one of many new renewable, sustainable technologies that call Masdar City – the Mecca of Renewable Energy – home.

A good friend of mine recently traveled to the audacious, carbon-neutral, zero-waste $15 to $20-billion planned development rising out of the Arabian Desert city and has tried to convince me that this is the closet place on Earth today to an enviro-utopia.

Masdar City was the visionary concept of Ziad Tassabehji – one of the most influential men in the new green Middle East. In 2004, he made a proposal to senior Abu Dhabi officials making the case that they needed to diversify their economy and develop a new sector around renewable energy. This initiative required mixing several ingredients together in order to create aknowledge based economy that promotes sustainable technologies including ventures funds, a research driven university, outward investments in companies that own promising technologies, local projects to promote adoption and a science and technology park that houses this new community.

The idea was well received by the Mubadala board (Abu Dhabi Sovereign Fund) and senior management who saw the potential for such a sector and adopted it. Ziad was retained as an advisor to evolve the concept into a full business plan. By early 2006, the Masdar City initiative had several strategic partnerships lined up and construction began in the six kilometre wide city designed to have implications for clean tech, renewable energy and urban design in the Middle East and elsewhere.

The first project at Masdar City was a 40 to 60 megawatt solar power plant that was designed to supply power for all the construction activity that was about to take place. Once the construction was completed the solar plant expanded – this also included the addition of solar panels on every roof top – to supplement solar energy totalling 130 megawatts. Outside of the city’s perimeter wind farms were constructed and there are plans in place for geothermal energy and the world’s largest hydrogen power plant.

A solar powered desalination plan is used to provide the city’s water needs. Approximately 80% of water used is expected to be recycled with waste water being reused as many times possible – irrigation purposes. Waste management efforts are in place to basically attempt to reduce waste to zero. Biological waste will be used to create nutrient-rich soil and fertilizer, while non-recyclable waste will be put through a waste incinerator as an additional power source.

The city is said to be home to now cars and the world’s first tracklessPersonal Transportation System, or PRT.

Essentially you climb into these little podlike four-seaters, press a button, and in theory they take you where you want to go anywhere in the city. As the video explains the PRT is also entirely underground allowing for the city streets above to be utilized by pedestrians and cyclists only. The narrow streets of Masdar City are also designed for comfort in the desert heat. Buildings shade one another and have the feel of an old Arab village. Windows on buildings are angled to allow light, but not heat, to penetrate.

So far, the only people living in Masdar City are about students and staff at the Masdar Institute. Tuition is free, and they are all doing research on sustainability with MIT as a partner. The plan put in place says the city will be capable of housing 47,500 people and up to 50,000 commuters a day.

Now while I am rather impressed by the city’s ability to practically reduce its ecological footprint to the size of a grain of sand, I am not whole-heartedly convinced that this city will be a big, viable, commercial business. Ziad’s vision while great for mother Earth missed out on a few key items. He was right about Masdar city not needing to rely on the oil industry, but it does on the clean tech industry and unless your business caters to the clean tech industry there will be no place for your business. Ziad didn’t diversify the economy as he thought, he just changed what it should focus on. And you won’t find economic prosperity within one industry – although that is certainly debatable…