From the most recent Freakonomics podcast:
if you love nature, stay away from it. We're much more likely to harm nature, as Thoreau did surrounded by the woods than if we lived in tall urban apartments by ourselves. There's a statistical partner to that, which is together with Matthew Kahn, I've assembled data on carbon emissions associated with living in different parts of the country. And there are two facts which I think are important to come out of that: one of which is that people who live in cities do tend to emit significantly less carbon than people who live in countries. And this is controlling for income controlling for family size. That's coming mainly from driving, from the fact there's just a lot fewer carbon emissions associated with dense living. It's not just the move to public transportation, it's also that for drivers within cities, they're just driving much shorter distances. And then of course, it's because of smaller homes. The higher price of urban space means that people are living in smaller homes even with the same family size. And that leads to lower electricity usage, lower home heating usage, and those are the facts that make cities seem, at least to my eyes, significantly greener.
So if, as the author also claims, that cities are the engines of economic and social growth without the environmental destruction, why don't we all live in big cities? The government:
I think that at the federal level there are three issues, one of which is the home mortgage interest deduction. The home mortgage interest deduction essentially acts as a push away from urban apartments into suburban homes. [...]
Second policy that's problematic, and we're still doing this, and this I actually give President Obama much less credit for—we've been huge on building infrastructure in this country for a long time. [...]
But I worry about a renewed push towards building new transportation infrastructure in this country. The work of Nathaniel Baum-Snow finds that every new highway that cut into a major city in the post war period reduced that city's population by eighteen percent because of suburbanization. Transportation is sort of the opposite of urban clustering. You're sort of subsidizing people to spread out.
And the third thing, which is not really a federal issue, but it's huge is our local system of schooling. Certainly for anyone who's a parent like myself, the suburban school districts offer huge enticement to leave cities.
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