NCE Cities Sprawl Subsidy Report:
Analysis of Public Policies that Unintentionally Encourage and Subsidize Urban Sprawl
Lead Author: Todd Litman, Victoria Transport Policy Institute
This report investigates evidence that current development policies result in economically excessive sprawl. It defines sprawl and its alternative, “smart growth,” describes various costs and benefits of sprawl, and estimates their magnitude. It identifies policy distortions that encourage sprawl. It discusses factors to consider when determining the optimal amount and type of urban expansion for various types of cities. It discusses the implications of this analysis for rapidly urbanizing countries. It identifies potential policy reforms that could result in more efficient and equitable development patterns, and describes examples of their implementation. It also discusses criticisms of sprawl cost studies and smart growth policies.
An abundance of credible research indicates that sprawl significantly increases per capita land development, and by dispersing activities, increases vehicle travel. These physical changes impose various economic costs including reduced agricultural and ecological productivity, increased public infrastructure and service costs, plus increased transport costs including consumer costs, traffic congestion, accidents, pollution emissions, reduced accessibility for non-drivers, and reduced public fitness and health. Sprawl provides various benefits, but these are mostly direct benefits to sprawled community residents, while many costs are external, imposed on non-residents. This analysis indicates that sprawl imposes more than $400 billion dollars in external costs and $625 billion in internal costs annually in the U.S., indicating that smart growth policies which encourage more efficient development can provide large economic, social and environmental benefits. Although these costs reflect North American conditions, the results are transferable to developing countries.
The New Climate Economy (NCE) is the flagship project of the Global Commission on the Economy and Climate. It was established by seven countries, Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom, as an independent initiative to examine how countries can achieve economic growth while dealing with the risks posed by climate change. The NCE Cities Research Programme is led by LSE Cities at the London School of Economics, and includes a consortium of researchers from the Stockholm Environment Institute, the ESRC Centre for Climate Change Economics and Policy, the World Resources Institute, Victoria Transport Policy Institute, and Oxford Economics. The NCE Cities Research Programme is directed by Graham Floater and Philipp Rode.
The new report and all related publications can be found here.
Image: Bradly Salazar