Working Paper: CEPR ID: DP8297
Authors: Carl Gaign; Stéphane Riou; Jacques-François Thisse
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.
Keywords: cities; commuting costs; greenhouse gas; transport costs; urban containment policy
JEL Codes: D61; F12; Q54; Q58; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher population density (R23) | Increased agglomeration of economic activities (R11) |
| Increased agglomeration of economic activities (R11) | Reduced emissions from intercity shipping (L91) |
| Increased agglomeration of economic activities (R11) | Increased emissions from commuting and intraurban trade flows (R41) |
| Decentralized job structure (M54) | Lower GHG emissions (F64) |
| Higher population density (R23) | Increased overall pollution through interurban migration (R23) |
| Polycentric urban structures (R11) | Lower GHG emissions compared to monocentric structures (R11) |
| Policies promoting compact cities (R38) | Increased emissions due to greater agglomeration and longer intraurban trips (R11) |
| Policies aimed at increasing urban density (R28) | Higher overall pollution levels due to relocation of activities (F64) |