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Pollution-reducing infrastructure and urban environmental policy

Published online by Cambridge University Press:  14 March 2007

MARTIN F. QUAAS
MARTIN F. QUAAS
Affiliation:
Department of Ecological Modelling, UFZ-Centre for Environmental Research Leipzig-Halle in the Helmholtz Association, PO Box 500135, D-04301 Leipzig, Germany. Email: [email protected].
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Abstract

Pollution-reducing infrastructure is introduced in a general spatial equilibrium model of a monocentric city as a public good which serves to abate polluting emissions from households' consumption. This is an innovative extension to an urban economics model and motivated by stylized facts observed for the case of Bombay. It allows us to develop and analyse improved policy instruments to solve urban environmental problems.

We demonstrate how the optimal density of people, goods consumption, and pollution-reducing infrastructure are interrelated and spatially distributed. The public-good character of infrastructure is shown to favour an increased infrastructural density all over the city in response to increased population size. In two settings of public and private infrastructural supply, we derive three interrelated and spatially differentiated policy instruments, by which the optimal allocation is implemented as a spatial market equilibrium.

Type
Research Article
Information
Environment and Development Economics , Volume 12 , Issue 2 , April 2007 , pp. 213 - 234
Copyright
© 2007 Cambridge University Press

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