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Are compact cities environmentally friendly?

Author

Listed:
  • Carl Gaigné

    (INRA, French National Institute for Agricultural Research, France)

  • Stéphane Riou

    (UMR CNRS 5824 GATE Lyon-Saint-Etienne, Université de Saint-Etienne, France)

  • Jacques-François Thisse

    (CORE, Université catholique de Louvain (Belgium), Université du Luxembourg (Luxembourg), CEPR (UK), and RIEB, Kobe University (Japan))

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.

Suggested Citation

  • Carl Gaigné & Stéphane Riou & Jacques-François Thisse, 2011. "Are compact cities environmentally friendly?," Discussion Paper Series DP2011-15, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2011-15
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Greenhouse gas; Commuting costs; Transport costs; Cities; urban-containment policy;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • 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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