Economic Analysis of Urban Development and Environmental Sustainability

Does urban growth hurt or help the environment? The answer, in a nutshell, is “both”. Rapid urban development in Asia has caused ambient particulate levels in more than twenty cities to rise above three times the WHO’s standard, and the congestion and pollution in Mexico City, Delhi and Beijing have become famous worldwide. But in other parts of the world or even in the fast-urbanization countries, many cities have made a dramatic quality of life improvement while continuing to grow.

This course aims to guide the students to explore the causes and consequences of urban environmental quality dynamics, and provide them the econometric tools to quantify such relationships: (1) How does urban development, along multiple dimensions, impact the environment; (2) How does environmental quality influence individuals’ quality of life, their choices, and cities’ growth potential.

Understanding the relationship between urban development and environmental quality is no mere academic exercise. Today, 55% of the world’s population lives in urban areas, a proportion that is expected to increase to 68% by 2050 (United Nations, 2018). Urban development is a dynamic process. Millions of individual firms and households, as well as local governments, make their daily choices in cities. The future of urban environmental quality depends on how pollution evolves in conjunction with the aggregate effect of the decentralized decision-making in a fast-urbanizing world.

This course will provide students a systematic framework of the interplay (both tension and synergy) between urbanization and the environment, and introduce them to the most pressing environmental challenges accompanied with urban development worldwide. We will familiarize students with the current research progress in this field, by walking them through the high-quality empirical studies from both developing and developed countries (with fast urbanization highlighted). This international perspective will help to cultivate a context-specific analytical mindset for students and also facilitate comparative studies between countries, cities and urbanization stages.

In this learning process, students will improve their skills in several aspects: (1) Critical and economic thinking: framing right questions, weighing the tradeoffs, linking incentives and behaviors; (2) Econometric approaches: data analytics, statistical programming, and basic and modern econometric methods for identification and causal inference; (3) A quantitative economic approach for urban and environmental policy evaluation in gauging the intended and unintended consequences, which will expand students’ policy evaluation toolkits and complement other approaches.

This course is designed for students majored in urban studies and planning, urban and environmental economics, real estate and public policy, who wish to gain deeper insights into the tension and synergy between urban development and the environment from a global perspective; and at the same time, to enhance their analytical reasoning and quantitative skills to assist evidence-based study and policy design evaluation in this field.