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Are compact cities environmentally friendly?

Carl Gaigne, Stephane Riou () and Jacques Thisse ()

No 2012019, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: There is a wide consensus among international institutions and national governments in favor of compact (i.e. densely populated) cities as a way to improve the ecological performance of the transport system. Indeed, when both the intercity and intra-urban distributions of activities are given, a higher population density makes cities more environmentally friendly because the average commuting length is reduced. However, when we account for the possible relocation of activities within and between cities in response to a higher population density, the latter may cease to hold. Indeed, an increasing-density policy affects prices, wages and land rents, which in turn incentivizes firms and households to change place. This reshapes the urban system in a way that may generate a higher level of pollution. Thus, although an increase in compactness is environmentally desirable when locations are given, compactness may not environmentally- friendly when one accounts for the general equilibrium effects generated by such a policy.

Keywords: greenhouse gas; commuting costs; transport costs; cities (search for similar items in EconPapers)
JEL-codes: D61 F12 Q54 Q58 R12 (search for similar items in EconPapers)
Date: 2012-05-09
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http://uclouvain.be/cps/ucl/doc/core/documents/coredp2012_19web.pdf (application/pdf)

Related works:
Journal Article: Are compact cities environmentally friendly? (2012) Downloads
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Working Paper: Are compact cities environmentally friendly (2010)
Working Paper: Are compact cities environmentally friendly? (2010) Downloads
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