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Is Work from Home Good for the Environment?

Author

Listed:
  • Rainald Borck
  • Matthias Kalkuhl
  • Kai Lessmann

Abstract

The work-from-home (WFH) revolution is reshaping economic activities and location choices with potentially important implications for environmental pollution. We use a quantitative spatial model calibrated to the German economy to assess the effects of increasing WFH from pre- to post-pandemic levels on pollution from commuting, residential and office buildings, and industrial production. We find that residential population moves from large cities to suburbs and smaller cities, while jobs concentrate in urban centers. A decrease in equilibrium commuting frequency by 18 percentage points reduces nation-wide emission of particulate matter (PM2.5) by 1.9% and carbon dioxide emissions by 2.2%. Commuting emissions decrease by 20.2% – despite a substantial rebound effect induced by a 9% increase in commuting distances. Residential emissions barely change, while there is a shift from on-site to remote office emissions. Pollution falls most strongly in rural counties and least in dense urban ones.

Suggested Citation

  • Rainald Borck & Matthias Kalkuhl & Kai Lessmann, 2025. "Is Work from Home Good for the Environment?," CESifo Working Paper Series 12300, CESifo.
    • Handle: RePEc:ces:ceswps:_12300
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12300.pdf
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    References listed on IDEAS

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    1. Cevat Giray Aksoy & Jose Maria Barrero & Nicholas Bloom & Steven J. Davis & Mathias Dolls & Pablo Zarate, 2023. "Time Savings When Working from Home," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 597-603, May.
    2. Rainald Borck & Jan K. Brueckner, 2018. "Optimal Energy Taxation in Cities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 481-516.
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    7. José María Barrero & Nicholas Bloom & Steven J. Davis, 2023. "The Evolution of Work from Home," Journal of Economic Perspectives, American Economic Association, vol. 37(4), pages 23-50, Fall.
    8. Treb Allen & Costas Arkolakis & Xiangliang Li, 2024. "On the Equilibrium Properties of Spatial Models," American Economic Review: Insights, American Economic Association, vol. 6(4), pages 472-489, December.
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    11. Rainald Borck & Michael Pflüger, 2019. "Green cities? Urbanization, trade, and the environment," Journal of Regional Science, Wiley Blackwell, vol. 59(4), pages 743-766, September.
    12. Jean-Victor Alipour & Christina Langer & Layla O´Kane, 2021. "Is Working from Home Here to Stay? A Look at 35 Million Job Ads," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(06), pages 41-46, November.
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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