Urbanization degrades the environment, according to conventional wisdom. This view has led many developing countries to limit rural—urban migration and curb urban expansion. But this view is incorrect. There are a number of reasons urbanization can be good for the environment, if managed properly.
First, urbanization brings higher productivity because of its positive externalities and economies of scale.
Asian urban productivity is more than 5.5 times that of rural areas. The same output can be produced using fewer resources with urban agglomeration than without. In this sense, urbanization reduces the ecological footprint. The service sector requires urbanization because it needs a concentration of clients. As services generally pollute less than manufacturing, this aspect of urbanization is also beneficial to the environment.
Second, for any given population, the high urban density is benign for the environment.
The urban economics literature shows that compactness is a key determinant of energy use. High density can make public transport more viable and reduce the length of trips. Urban living encourages walking and cycling rather than driving.
Third, environment-friendly infrastructure and public services such as piped water, sanitation, and waste management are much easier and more economical to construct, maintain, and operate in an urban setting. Urbanization allows more people to have access to environment-friendly facilities and services at affordable prices.
Fourth, urbanization drives innovation, including green technologies. In the long term, environment-friendly equipment, machines, vehicles, and utilities will determine the future of the green economy. Green innovations in Asia’s cities will be supported by the region’s vast market as the billions of people who will be buying energy-efficient products will create opportunities and incentives for entrepreneurs to invest in developing such products.
Finally, the higher standard of living associated with urbanization provides people with better food, education, housing, and health care. Urban growth generates revenues that fund infrastructure projects, reducing congestion and improving public health. Urbanization fosters a pro-environment stance among property owners and the middle class, which is crucial for the introduction and enforcement of environmental laws and regulations.
Of course, urbanization also comes with costs. Millions of people are migrating to Asian cities and companies are locating there to employ them. Urban sprawl and industrial activities, such as power generation, transportation, construction, garbage and waste disposal, harm the environment. An assessment of the impact of urbanization on the environment must balance its benign and adverse effects. Figure 1 shows that the Asian environment–urbanization relationship varies, depending on the level of development. Once a certain threshold has been reached, urbanization becomes good for the environment in terms of lower emissions of CO2 and particle pollution (PM10).
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