Compact cities a better for the environment, mostly

A large fraction of emissions of gases responsible for the green-house effect are coming from vehicle traffic: trucks transporting goods and cars commuting people to work and other activities. Quite obviously, one can reduce these emissions by reducing such traffic, for example by densifying cities. When activities are more concentrated, less traffic is necessary for the same amount of activity. Is it really that simple?

Carl Gaigné, Stéphane Riou and Jacques-François Thisse highlight that one needs to be careful. First, when densifying a city, land rents increase and may drive businesses and people to move elsewhere, where the problem starts anew. One needs thus plan cities beyond the agglomeration. Also, densifying a city in a monocentric way may actually increase commuting times. With a larger central business district, land for dwelling is pushed further away, increasing travel times for workers, making them less happy and possibly annihilating the environmental gains of the central city.

As a solution, Gaigné, Riou and Thisse propose for cities beyond a certain size a multicentric densification model. The idea is to create a city center with a number of satellites. This increases slightly the traffic of goods, slightly because the majority of goods traffic is between cities anyway. But this decreases massively the traffic of people, as workers reside closer to their workplace, and they can afford it as land rents are lower. A win-win situation fro everyone, both in terms of pollution and welfare.