Are compact cities environmentally friendly?


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.


greenhouse gas, commuting costs, transport costs, cities; urbancontainment policy

JEL Classification

D61; F12; Q54; Q58; R12.


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, CEPR, and
RIEB, Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059