Agglomeration, Urban Growth and Infrastructure in Global Climate Policy: A Dynamic CGE Approach

Fabio Grazi and Henri Waisman
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Fabio Grazi: Agence Française de Développement, Research Directorate
Henri Waisman: Centre International de Recherche sur l’Environnement et le Développement

No 2015.61, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper presents an integrated model of urban agglomeration economies within a computable general equilibrium (CGE) model of global economic activity, energy use and carbon emissions to explore the theoretical and empirical nature of the interdependence of cities and the world economy in a climate policy context. Based on calibration data for 74 major OECD agglomerations, the integrated model is used to gauge the long-term impact of: i) global carbon pricing on urban systems and the economic activity; ii) urban infrastructure development on the economic costs of curbing carbon emissions. Importantly, it is found that combining urban infrastructure and carbon pricing allows for stringent emissions reduction targets, while still avoiding the economic and welfare costs of the carbon price only.

Keywords: Calibration; Cities; Hybrid Energy-Economy Modeling; New Economic Geography; Trade and Transport; Urban Infrastructure; Welfare (search for similar items in EconPapers)
JEL-codes: C68 Q54 R12 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env, nep-geo, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2015.61

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