Moving to the city
People worldwide are increasingly living in cities. Urban life has many benefits including economic growth. However large concentrations of people and their activities can lead to increased pollution. A recent paper by Muller and Jha looks at these trade-offs. The researchers analyze population growth, increases in emissions, and economic growth to see if they are linked. Economic growth is measured by GDP (Gross Domestic Product) of metropolitan areas and personal income. Emissions include releases of gases and particles into the air, such as from car tailpipes, building heat sources, and power plants.
How much is pollution worth?
This paper looks at two types of emissions: local air pollutants that can harm people’s health in the city and carbon dioxide (CO2) which causes global climate change. There are several types of local air pollutants and different impacts caused by local and global pollutants. However, we can compare these emissions based on how much they will impact us. This paper converts emissions into Gross External Damage (GED) which is a monetary value associated with the emission. This number is calculated based on how much these emissions will cost. For instance, a certain amount of pollution might cause an increase in hospital bills, which has a monetary value that can be compared against the impact of other emissions. Local pollutants are typically more harmful (and more expensive) per ton. These emissions have a local impact, but global pollution depends on the total amount present across the earth, so each additional puff of emissions has a smaller impact.
Do emissions increase with population?
Emissions do increase as population increases, but not as fast. As the population of a city increases, the emissions also increase, but the per capita emissions decrease. There are fewer tons of emissions per person as cities grow because cities are more efficient than living dispersed over a large area. If there are 10 times as many people in a city as there used to be, there will be only about 6 times as many local emissions over the same time period. So more people have a larger demand for goods and services, increasing the total emissions, but the emissions per capita decrease due to urbanization.
However, some emissions have a larger impact than others. The monetized damage value of emissions, which represents the impact of pollution, grows as the city grows. Although some emissions increase more slowly, it is the impact represented by the monetized value that matters for human health and welfare. Emissions per capita decrease as cities grow, but damages per capita remain constant as population increases.
How does this impact our money?
In addition to increasing populations and emissions, cities are also centers of economic growth. As cities grow, people have larger incomes and cities have increased GDP. This is because cities can achieve cost savings per unit of economic output, or economies of scale. As with population, emissions per capita decrease as a function of economic output measured by income and GDP. However, the monetized damages rise almost as fast as economic output. Economic output does still increase faster than the cost of pollution in cities. We can compare the money in incomes with the monetized emissions to determine that economic benefits of urbanization outweigh the environmental costs of emissions in cities.
What about CO2?
So far we have been focusing on the impact of local pollution, but CO2 doesn’t change the story. Each ton of CO2 emitted in a city has low monetary damages since the global totals of CO2 are what is important. Even though we emit much more CO2, the same amount of local air pollutants has a larger impact.
Does environmental policy help protect us?
In the US, we have National Ambient Air Quality Standards (NAAQS), and if a city has high pollution levels they are said to be in “non-attainment” and have to follow more strict emission guidelines than other places. Hopefully, these environmental regulations are providing protection and reducing the impact of local pollutants on our health. The authors test whether this is true by comparing counties that have to comply with the stricter non-attainment standards versus those that do not.
These policies that limit emissions also limit the increase of damages with population. The NAAQS do provide a benefit by reducing the environmental damages per capita. Some critics of environmental regulation counter that the costs associated with emissions limits hurt the economy because people have to limit how much they produce or consume of goods and services. Since this study has already evaluated environmental impacts, population, and economic outcomes, the authors evaluate if the cities impacted by the NAAQS have negative economic outcomes. The results show no evidence that counties in non-attainment have negative impacts to their economy.
Take home message
Growing cities increase population and economic growth, but they also increase emissions. The emissions increase more slowly than population and economic growth. However, damages (and health impacts) from these emissions increase as fast or almost as fast. Environmental regulations slow the growth of environmental damages and do not hinder economic growth.
Source: Muller NZ, Jha A (2017) Does environmental policy affect scaling laws between population and pollution? Evidence from American metropolitan areas. PLOS ONE 12(8):e0181407. https://doi.org/10.1371/journal.pone.0181407