ECONOMIC BENEFITS OF CLIMATE ACTION: THE URBAN DIMENSION

The benefit of implementing urban policies to tackle climate change is demonstrated in this chapter. The traditional trade-off between economic growth and environmental objective observed at a macroeconomic level, referred to as abatement costs for climate change policies, can be alleviated when urban policies such as densification or a congestion charges are being introduced. This is the result of a general equilibrium model that incorporates an urban module. Under a baseline global scenario with Kyoto emissions reduction objectives, the overall economic costs can be reduced over time thanks to additional actions taken at the local level. This is due to complementaries with other objectives such as lower local pollution which enhances city attractiveness and competitiveness. The section also discusses other types of local co-benefits of climate change policies including, health improvements and quality of life, cost savings and increased efficiency, as well as energy security and infrastructure improvements