While there remains considerable debate about the expected costs of global warming, agrowing scientific consensus believes that greenhouse gas emissions create significant risks of climate change. A wide range of experts have advocated reducing individual carbon footprintsand investing billions to reduce the risks of a major change in the earth’s environment (Stern,2008).
Almost 40 percent of total U.S. carbon dioxide emissions are associated with residencesand cars, so changing patterns of urban development and transportation can significantly impactemissions.
How do major cities differ with respect to their per-household emissions levels?In Section II of this paper, we review the basic theory of spatial environmental externalities.If emissions are taxed appropriately, then private individuals will make appropriate decisionsabout location choices without any additional location-specific policies. When emissions are nottaxed, then location decisions will be inefficient. The optimal location-specific tax on buildingin one place versus another equals the difference in emissions times the gap between the socialcost of emissions and the current tax on these emissions. Even if there was an appropriatecarbon tax, location decisions might still be sub-optimal if governments subsidize developmentin high emissions areas or artificially restrict development in low emissions areas.In Section III of this paper, we measure household carbon dioxide emissions production in 66major metropolitan areas within the United States.
For a standardized household, we predictthis household’s residential emissions and emissions from transportation use. We look atemissions associated with gasoline consumption, public transportation, home heating (fuel oiland natural gas) and electricity usage. We use data from the 2001 National Household TravelSurvey to measure gasoline consumption. We use year 2000 household level data from theCensus of Population and Housing to measure household electricity, natural gas and fuel oil
See also the critical reviews in Weitzman (2007) and Nordhaus (2007).
Seehttp://www.eia.doe.gov/oiaf/1605/ggrpt/carbon.htmlfor sources of carbon dioxide emissions.
Our work parallels the findings of the Vulcan Project at Purdue University(http://www.purdue.edu/eas/carbon/vulcan/index.php
) and the recent Brookings Institution study by Brown andLogan (2008) fall into this category. Our exercise is slightly different since we look at the impact of a standardizedhousehold and we focus on marginal, rather than average, homes. For an example of international analysis thatdisaggregates greenhouse gas emissions variation within a nation, see Auffhammer and Carson’s (2008) study of China.