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

Author

Listed:
  • Fabio Grazi

    (Agence Française de Développement, Research Directorate)

  • Henri Waisman

    (Centre International de Recherche sur l’Environnement et le Développement)

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.

Suggested Citation

  • Fabio Grazi & Henri Waisman, 2015. "Agglomeration, Urban Growth and Infrastructure in Global Climate Policy: A Dynamic CGE Approach," Working Papers 2015.61, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2015.61
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    References listed on IDEAS

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    Cited by:

    1. Saujot, Mathieu & Lefèvre, Benoit, 2016. "The next generation of urban MACCs. Reassessing the cost-effectiveness of urban mitigation options by integrating a systemic approach and social costs," Energy Policy, Elsevier, vol. 92(C), pages 124-138.

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    More about this item

    Keywords

    Calibration; Cities; Hybrid Energy-Economy Modeling; New Economic Geography; Trade and Transport; Urban Infrastructure; Welfare;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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