Sunday, August 28, 2005

Will Beijing Be a Green City by 2008?

Does economic development exacerbate or mitigate urban environmental problems? The environmental Kuznets curve literature continues to debate this question. In my book manuscript titled Green Cities, I explore what we now know about this topic. Today, Jim Yardley in the New York Times’ piece “Beijing’s Quest for 2008: To Become Simply Livable” explores some of the challenges this growing city faces.

Beijing has a major incentive to “green” itself. The 2008 Olympics will be held there and the world will be watching. The city has a master plan with the vague goal to become a “city suitable for living”. What exactly does this mean? Should the 15.2 million inhabitants of the city simply be polled asking each “do you like your city?” “Is your quality of life higher than it was 4 years ago?” Instead, Yardley’s article points to objective measures of quality of life such as gridlocked traffic, air pollution, garbage and water supply.

Critics claim that the city needs more planning. This strikes me as ironic. If a non-democracy like China can't implement plans, who can? It is claimed that rampant development has destroyed much of the historic old city and made a mess of the emerging new one. The quotes in the article sound like a replay of New York City’s Robert Moses’ critics such as Robert Caro in the Power Broker. As I recall, the Moses story is that in his quest to build highways to connect the New York City suburbs such as Long Island to Manhattan he destroyed many old neighborhoods. These tended to be neighborhoods where minorities with little political clout lived and these individuals received no compensation for their loss. To quote Yardley’s article “More recently, the hutongs have been steadily demolished, dislocating untold thousands of people, to make room for the thousands of development projects swallowing the city.”

Are the critics right that planning improves urban quality of life? In theory, planners can internalize externalities that profit maximizing developers would ignore. But in the real world, do planned cities yield better cities? People keep moving to Las Vegas and other sprawl cities, many people are voting with their feet that they like sprawl.

Similar to the Robert Moses case in New York City, a fascinating issue arises concerning “What is good urban policy?” Any policy change involves winners and losers. In basic econ, we teach if the winners win more than the losers lose, then this is a good public policy. Unfortunately, from the standpoint of pareto optimality, the losers are rarely compensated. Anticipating that they will not be compensated, the losing interest group has every incentive to kick up a political fuss. Perhaps in a non-democracy such as China, this doesn’t matter.

The New York Times article highlights that China is in the midst of a major urbanization trend. Where should all of these rural people who are moving to cities live? 300 million people are expect to migrate to cities in the next 15 years. Beijing will sprawl in the country side.

Vern Henderson at Brown has documented that despite the popular fascination with mega-cities, much urbanization takes place in medium size cities getting bigger. If rural migrants have many choices over what urban areas to go to, then they can "vote with their feet" and avoid cities known to have major environmental problems.