Last week, construction began on a huge renewable-energy and urban-planning experiment, and it will be funded by $120-a-barrel oil at an anticipated cost of $22 billion over about eight years. The Masdar Initiative, launched in 2006, is an ambitious project to build a city near Abu Dhabi in the United Arab Emirates. It will house 50,000 people but will produce zero net carbon dioxide emissions and zero waste. Construction just began on the solar power plant that will power the city’s construction, and later the city itself. And the first building to go up will be part of the new Masdar Institute of Science and Technology (MIST), a school put together largely with the help of MIT that will be devoted to developing technologies for environmentally sustainable cities.

One of the best things about the project–which I’ll write about more in the coming days–is that it provides a much needed way to test ideas for renewable energy and efficiency at a large scale. The hope is that the technology tested here can be applied throughout the world.

But while the project will no doubt provide valuable insights, its location and the circumstances of its construction will limit its applicability. While the Abu Dhabi government won’t be providing all of the $22 billion–it’s calling on private investment with the hope that the project will be profitable–not every country can count on windfall profits to fund similar projects. What’s more, the solutions developed for use in a hot, dry, sunny climate won’t necessarily apply to places like, say, New England. Indeed, Gerard Evenden, a senior partner at Foster + Partners, the firm hired to plan the city, says it’s essential that cities and buildings be custom-built with the location in mind to maximize efficiency.

Finally, what’s to be done with cities that already exist? Many of the approaches to be taken at Masdar–such as controlling the orientation and length of the city streets and the height and construction materials of buildings–won’t work with places like New York and Mexico City. This morning at a symposium dedicated to the collaboration between MIT and Masdar, Ernest Moniz, the director of the MIT Energy Initiative, said that a more challenging task is finding ways to retrofit existing systems.