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Are compact cities environmentally friendly?

  • Carl Gaigné


    (INRA, UMR1302, 4 Allée Bobierre, F-35000 Rennes, France)

  • Stéphane Riou

    (UMR CNRS 5824 GATE Lyon-Saint-Etienne, Université de Saint-Etienne
    Department of Econometrics and Tinbergen Institute, Free University, The Netherlands)

  • Jacques-François Thisse


    (CORE, Université Catholique de Louvain (Belgium), Université du Luxembourg, and CEPR)

There is a large consensus among international institutions and national governments to favor urban-containment policies - the compact city - as a way to reduce the ecological footprint of cities. This approach overlooks the following basic trade-off : the concentration of activities decreases the ecological footprint stemming from commodity shipping between cities, but it increases emissions of greenhouse gas by inducing longer worktrips. What matters for the ecological footprint of cities is the mix between urban density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher urban density makes cities more environmentally friendly and raises global welfare. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the relocation of activities between cities, the relationship between density and the ecological footprints appears to be much more involved. Indeed, because changes in urban density affect land rents and wages, firms are incited to relocate, thus leading to new commuting patterns. We show policies that favor the decentralization of jobs in big cities may reduce global pollution and improve global welfare.

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Paper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 1001.

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Length: 29 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:gat:wpaper:1001
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  1. Cavailhes, Jean & Gaigne, Carl & Tabuchi, Takatoshi & Thisse, Jacques-Francois, 2007. "Trade and the structure of cities," Journal of Urban Economics, Elsevier, vol. 62(3), pages 383-404, November.
  2. James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
  3. Carl Gaigné & Stéphane Riou & Jacques-François Thisse, 2011. "Are compact cities environmentally friendly," Post-Print halshs-00674375, HAL.
  4. Glaeser, Edward L. & Kahn, Matthew E., 2004. "Sprawl and urban growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 56, pages 2481-2527 Elsevier.
  5. OTTAVIANO, Gianmarco & THISSE, Jacques-François, 1999. "Agglomeration and trade revisited," CORE Discussion Papers 1999041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  13. Gaigné, Carl & Wooton, Ian, 2011. "The gains from preferential tax regimes reconsidered," Regional Science and Urban Economics, Elsevier, vol. 41(1), pages 59-66, January.
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  16. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November.
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