Cities and CO2 – bigger is better

There is growing consensus that the world’s nations must act in a concerted way to address global climate change. Can action be taken without seriously undermining the ongoing economic recovery? It is commonly argued that environmental protection must necessarily come at the expense of economic growth, and vice versa. But new research from one of our affiliates, José Lobo and his colleagues, indicates that this need not be the case. Their findings suggest that our largest cities are not only centres of innovation but also energy efficiency as well, and will be a key part of our economically and ecologically sustainable future.

The US alone comprises 366 metropolitan regions with population in excess of 100,000. Typically when we discuss the functioning of these regions, particularly the largest urban centres, we focus on their deficiencies: sprawl, traffic congestion, pollution. Too often we overlook the ways that larger urban systems actually function better. For example, we already know that increased urbanization and innovation are closely intertwined. As first noted by Alfred Marshall and later elaborated by Jane Jacobs and others, large urban centres are unique in achieving the critical mass of creative workers, flows of knowledge, and sophisticated markets that compel innovation and growth.

In past research, Lobo and his colleagues have analyzed detailed data on cities across the globe and found that rates of patenting, wages and other economic measures do indeed increase with the size of cities.i Their recent work examines newly available environmental data and reveals the same scaling effect between metropolitan size and emissions, only this time there is an inverse relationship. Simply put, larger urban regions use energy more efficiently.

CO2 emissions are a widely used proxy for energy consumption, and include total emissions from commercial, industrial, residential and transportation energy usage occurring within metropolitan boundaries. When we examine the relationship between average CO2 emissions per capita and population size, (Exhibit 1), we clearly see a general trend in lower CO2 emissions per capita as the population of metropolitan regions grow. While metropolitan regions with a population between one million and one million five hundred thousand deviate slightly from this relationship, it is clear that a strong general trend still holds.

In their original work, Lobo and his colleagues find that total CO2 emissions and population size increase in tandem, but not at the same rate. With each increase of 1% in population, growth in carbon emissions is 0.92%. In other words, as population increases, CO2 emissions per capita drop. The same relationship is even more significant when the researchers used a measure of economic output, Gross Metropolitan Product, a 1% increase corresponds with only a 0.79% increase in carbon emissions.

What these results demonstrate is that as urban regions grow increasingly larger, the rate of growth in their emissions actually declines. For example, on an average annual basis, notoriously smoggy Los Angeles, a metropolitan region of almost 13 million people, produces 1.7 tonnes of CO2 per person. By comparison, agriculture-led Yuba City, CA produced 3.7 tonnes for each of its 150,000 residents.

In some ways, urban systems are similar to biological systems in that many of their characteristics are driven by size. Borrowing from biology, we refer to cities’ ability to process inputs efficiently – for example, energy – as their “urban metabolism.” And just like biological organisms, the energy metabolism of metropolitan areas slows down as they increase in size: larger regions burn less energy per capita than smaller regions.

What accounts for the more efficient energy use of larger cities? While this research doesn’t provide us with a clear answer, we can make some educated guesses. For one, larger cities often make more intensive use of existing infrastructure than smaller regions. Larger cities tend to have less road area per person and fewer gas stations than smaller regions. Larger cities also tend to make greater use of public transit than do smaller centres. Shorter electrical transmission cables in larger cities also result in less loss of electricity and in turn lower CO2 emissions. Larger cities also tend to be more densely populated, with more compact housing and office space which creates greater efficiencies. Recent research by another MPI affiliate Chris Kennedy indicates that policy-makers would be well served to examine the planning codes and other policies adopted by higher efficiency regions such as Toronto.ii

As we begin to act seriously on the challenge of global climate change, a great deal of attention is focused on encouraging the development of new green technologies and shifting to more environmentally-friendly consumption patterns. This data shows that we must also pay attention to how certain patterns of urban development can contribute to the fight against climate change. Cities, it seems, are a critical part of our sustainable future.

i) Refer to Bettencourt, L. M. A. et al. (2007). Growth, innovation, scaling, and the pace of life in cities. Proceedings of the National Academy of Sciences, 104(17), 7301-7306.
ii) Refer to Kennedy, C. et al. (2009). Greenhouse Gas Emissions from Global Cities. Environmental Science & Technology, 43(19), 7297-7302.

Download this Insight (PDF)

Further Reading:

Lobo, J., & Strumsky, D. (2009). Metropolitan Areas and CO2 Emissions: Large is Beautiful. Working Paper Series. Toronto: Martin Prosperity Institute.

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. Led by Director Richard Florida, we take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.