Pollution externalities versus agglomeration economies: is urban toll a relevant environmental tool?

Rémy Le Boennec

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Abstract: Using an urban economic model with an endogenous centre where agents freely choose land quantities, we prove to what extent policies aimed at abating pollution generated by working households' commuting trips involve a better control of urban sprawl as a positive side-effect. After the eco-tax has been applied to households by a local planner in the form of a linear urban toll, agglomeration economies which incited firms to group together in the Central Business District (CBD) keep on working as a positive externality. Under certain conditions, they are even strengthened.

Keywords: accessibility; agglomeration economies; urban toll; urban sprawl; Air pollution; Road pricing; Environmental tax; Second best optimum; Monocentric; Urban economics; Urban economic model; Residential location choice; Market failure; Environmental cost; Social cost; Social welfare; Travel cost; Land price (search for similar items in EconPapers)
Date: 2015-06-15
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Published in International Transportation Economics Association (ITEA), Jun 2015, Oslo, Norway

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01657139

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