The world is a village? Not anymore. The world is now a city. 2008 marked the first year that more people lived in cities than in rural areas worldwide. According to a study by the United Nations, this share will increase to around 75% by 2050. This is already the case in Europe; in the US, four out of five people live in cities – with an upward tendency. As the starting points of structural change and centers of progress, cities have always driven growth. But how this practically unstoppable urbanization affects the environment and how it might be utilized for good remains under-researched. Economist Prof. Dr. Rainald Borck of the University of Potsdam has committed himself to developing a model that can be used to research how friendly or harmful cities are to the environment and which instruments are likely to make them greener.
In his 2011 book Triumph of the City, Harvard economist Edward Glaeser describes cities as “our greatest invention”: the driving force of progress, symbols of the modern world, and origin of all novelty. He argues that cities make their inhabitants “richer, wiser, healthier and happier” – and even greener! For Glaeser, this success is explained by agglomeration. Cities should not sprawl but be built upwards. It shortens distances and reduces CO2 emissions. The elevator replaces the car as the transportation of choice. Limited space means high rent. This forces people to live in smaller apartments, which is also better for the environment. So is it wrong to think of cities as filthy behemoths? There are, in fact, some indications of this. As we know, air pollution in New York continued to rise between 1800 and 1940 but has since been on the decrease. The conclusion: The more developed a city, the greener it is.
An analysis of data from urban areas in 42 countries went even further, finding a correlation between per capita income and environmental pollution – air quality, to be precise. In the initial stages of a city’s development, when per capita income is low, air pollution rises but then declines again as incomes increase. This correlation – an upside-down U in diagrams – is referred to as the environmental Kuznets curve and reinforces the thesis of the “green metropolis”.
Are cities green metropolises or the cause of environmental pollution?
As promising as these first analyses may be, the correlation between urban development and its environmental impact has only been partially researched, and the puzzle is far from being solved. There are also indications to the contrary. For instance, at least since the onset of industrialization, conurbations have been the main source of increasing environmental pollution and destruction. Although urban areas currently account for only 52% of the world’s population, they emit 70% of all greenhouse gases.
“Some claim that if cities are the cause of dramatic environmental pollution, they will find a ‘spontaneous’ solution,” says Rainald Borck, Professor of Public Economics at the University of Potsdam. “But this is naïve. Why should climate change interest an inhabitant of Delhi? Ultimately, he cares about Delhi’s air quality. Analyzing the environmental effects of urbanization is among the most significant issues in urban economics – and, in light of global ecological damage, of utmost social relevance. Too much research goes into smart cities today, while there are no in-depth analyses of urban development and its environmental impact.”
Rainald Borck wants to contribute to closing this gap. In the project “Analysis Green Cities”, he and Prof. Dr. Michael Pflüger of the University of Würzburg probe various questions: What factors determine whether resource consumption and pollution can be uncoupled from increased per capita consumption as development progresses? What is the role of markets and scarcity prices? What economic policy interventions can be made? Should we continue to consolidate our cities und build more skyscrapers? What do sustainable green cities and urban systems look like? Will some cities be able to present themselves as “green” service cities, while others become industry-heavy pollution havens? Might environmental impact perhaps not change at all – or even increase?
Combining the economic and ecological model
At the heart of the project is the development of a model framework capable of describing the environment impact of household economic behavior. “In principle, we wanted to combine an economic growth model with an environmental one,” Borck says. And they are doing so for all conceivable constellations. The model is to account for various types and sizes of cities as well as all relevant influences, such as market forces on the supply-demand side, environmental action (“green governance”), and – an important factor in and of itself – population pressure, e.g. population growth or migration.
“This model would help us simulate what changes the modification of individual parameters could trigger. For instance, we could visualize how pollution – say CO2 emissions – develops as cities grow or shrink,” explains Philipp Schrauth, who is participating in the project as part of his PhD. “Here a number of factors interest us: size, sprawl, and density of a city. In Germany, such data are comparatively well recorded for the whole country. When it comes to environmental data, the situation is more complex.” Because of this, the researchers plan to study whether there is an optimal city size in terms of environmental pollution and what the ideal population distribution in a conurbation would be. “People often overlook that, in the context of urban systems, individual cities may be greener, yet the entire system can produce more pollution,” Borck says. “So you can have a situation where a city is very green, but its inhabitants commute to a neighboring industrial city in large numbers, thus contributing to comparatively high CO2 emissions.”
In-depth studies link the model with practice
Another sub-project looks into how targeted investments in environmental innovations may influence future environmental quality. The researchers are also studying the effects of environmental measures on pollution. “Some energy policies in the urban context have unexpected feedback and ultimately backfire, resulting in increased emissions.”
Back in 2014, Rainald Borck did a case study on how limiting the height of buildings affected a city’s CO2 emissions. The result was double-edged, as Borck explains: artificially limiting the height of buildings in a city center leads to living space becoming scarce and, thus, lower emissions from, for instance, heating. At the same time, though, people are forced to the outskirts, where they heat larger apartments. CO2 emissions also increase as a result of commuter traffic.
More in-depth studies will be done over the course of the project on, for instance, the benefits of investing in bicycle infrastructures. After all, applying the model to concrete urban scenarios could yield verifiable arguments as to why living in densely populated cities might lead to environmental preservation. It could also help to identify pitfalls. After all, the long-term objective of the “model” theoretical project is to be able to make practical contributions. Borck is confident: “We hope to deliver important insight into the factors and processes that contribute to developing sustainable green cities and urban systems.”
The Researchers
Prof. Dr. Rainald Borck studied economics at TU Berlin and earned his doctorate and habilitation at Humboldt-Universität zu Berlin. Since 2012, he has been Professor for Public Economics at the University of Potsdam. His research focuses on urban and regional economics and finance.
Universität Potsdam
Wirtschafts- und Sozialwissenschaftliche Fakultät
August-Bebel-Straße 89
14482 Potsdam
Email: lsfiwiuuni-potsdampde
Philipp Schrauth studied governance and public policy at the University of Passau and the Universidad Centroamericana José Simeón Cañas, El Salvador as well as public economics at Freie Universität Berlin. Since 2016, he has been a research assistant at the DFG project “Economic Analysis of Green Cities” and a doctoral candidate at the chair of Public Economics.
Email: schrauthuuni-potsdampde
The Project
Economic Analysis of Green Cities
Oversight: Prof. Dr. Rainald Borck
Partner: Prof. Dr. Michael Pflüger (University of Würzburg)
Duration: 2016–2019
Funded by: German Research Foundation (DFG)
The Kuznets curve, named after American economist Simon Smith Kuznets, describes a correlation between economic growth and inequality in income distribution. It explains the development of an economy from an agricultural to an industrial society. In the beginning, everyone works in agriculture and has almost the same income. With the dawn of industrialization this changes: The income of an entrepreneur is much higher than that of a worker. This uneven distribution of income keeps rising for a while, but then drops with the workers attaining higher qualifications. As a result, inequality appears on a graph as an inverted U-shaped curve over time.
Text: Matthias Zimmermann
Translation: Monika Wilke
Published online by: Agnetha Lang
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Read this and other articles on research at the University of Potsdam in our research magazine Portal Wissen. http://www.uni-potsdam.de/en/explore-the-up/news-and-announcements/university-magazines/archive-portal-wissen.html