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Pollution and the Efficiency of Urban Growth

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  • Quaas, Martin F.
  • Smulders, Sjak

Abstract

We analyze the efficiency of urbanization patterns in a dynamic model of endogenous urban growth with two sectors of production. Production exhibits increasing returns to scale on aggregate. Urban environmental pollution, as a force that discourages agglomeration, is caused by domestic production. We show that cities are too large and too few in number in equilibrium, compared to the efficient urbanization path, if economic growth implies increasing aggregate emissions. If, on the other hand, production becomes cleaner over time (`quality growth') the urbanization path approximates the efficient outcome after finite time.

Suggested Citation

  • Quaas, Martin F. & Smulders, Sjak, 2008. "Pollution and the Efficiency of Urban Growth," Sustainability Indicators and Environmental Valuation Working Papers 44225, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemsi:44225
    DOI: 10.22004/ag.econ.44225
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    1. Quaas, Martin F. & Smulders, Sjak, 2008. "Pollution and the Efficiency of Urban Growth," Sustainability Indicators and Environmental Valuation Working Papers 44225, Fondazione Eni Enrico Mattei (FEEM).

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    More about this item

    Keywords

    Environmental Economics and Policy; Community/Rural/Urban Development;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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