Are Compact Cities Environmentally Friendly?

35 Pages Posted: 28 Mar 2011

See all articles by Carl Gaigne

Carl Gaigne

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART

Stephane Riou

GATE Lyon-Saint-Etienne

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2011

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 Classification: D61, F12, Q54, Q58, R12

Suggested Citation

Gaigne, Carl and Riou, Stephane and Thisse, Jacques-François, Are Compact Cities Environmentally Friendly? (March 2011). CEPR Discussion Paper No. DP8297. Available at SSRN: https://ssrn.com/abstract=1794887

Carl Gaigne (Contact Author)

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART ( email )

4 allée Adolphe Bobierre
CS 61103
Rennes Cedex, 35011
France

Stephane Riou

GATE Lyon-Saint-Etienne ( email )

34, rue Francis Baulier
Saint-Etienne, 42023
France

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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