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Pollution-reducing infrastructure and urban environmental policy


  • Quaas, Martin


Based on a case study on Bombay, we argue that urban infrastructure, like the sewage system and the municipal waste collection, is an important instrument for urban environmental policy. We develop a spatial general equilibrium model of a monocentric city, where infrastructure serves as a public means of abating pollution. Analyzing the optimal supply of pollution-reducing infrastructure, we conclude that it has to be geographically differentiated, even if pollution is homogenous. In a city with a growing population the provision of infrastructure has to be changed throughout the city, not only in newly inhabited areas. Urban environmental policies, based on Pigouvian taxes and pollution-reducing infrastructure, are mutually dependent. In two settings of public or private infrastructure, we show that fiscal environmental policies have to be spatially differentiated, and that income transfers are necessary in order to implement the first best allocation as a residential market equilibrium.

Suggested Citation

  • Quaas, Martin, 2005. "Pollution-reducing infrastructure and urban environmental policy," UFZ Discussion Papers 4/2005, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
  • Handle: RePEc:zbw:ufzdps:42005

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    Cited by:

    1. Legras, Sophie, 2015. "Correlated environmental impacts of wastewater management in a spatial context," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 83-92.
    2. Evangelos V. Dioikitopoulos & Sugata Ghosh & Eugenia Vella, 2016. "Technological Progress, Time Perception and Environmental Sustainability," Working Papers 2016002, The University of Sheffield, Department of Economics.
    3. Sophie Legras, 2017. "From the tank to climate change: multiple environmental impacts of wastewater management," Working Papers hal-01190244, HAL.

    More about this item


    urban environmental policy; pollution-reducing infrastructure; spatial environmental economics; unequal treatment of equal;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock


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