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Are compact cities environmentally friendly?

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

No DP2011-15, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: There is a large consensus among international institutions and national governments to favor urban-containment policies - the compact city - as a way to improve the ecological performance of the urban system. This approach overlooks a fundamental fact: what matters for the ecological outcome of cities is the mix between the level of population density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher population density makes cities more environmentally friendly. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the possible relocation of activities between cities, the relationship between population density and the ecological performance of cities appears to be much more involved. Indeed, because changes in population density affect land rents and wages, firms and workers are incited to relocate, thus leading to new commuting and shipping patterns. We show that policies favoring the decentralization of jobs may be more environmentally desirable.

Keywords: Greenhouse gas, Commuting costs, Transport costs, Cities; urban-containment policy (search for similar items in EconPapers)
JEL-codes: D61 F12 Q54 Q58 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo, nep-res and nep-ure
Date: 2011-03
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2011-15.pdf First version, 2011 (application/pdf)

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