Spatial welfare economics versus ecological footprint: modeling agglomeration, externalities and trade

A welfare framework for the analysis of the spatial dimensions of sustainability is developed. It covers agglomeration effects, interregional trade, negative environmental externalities, and various land use categories. The model is used to compare rankings of spatial configurations according to eva...

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Bibliographic Details
Published in:Environmental & resource economics 2007-09, Vol.38 (1), p.135-153
Main Authors: Grazi, Fabio, van den Bergh, Jeroen C. J. M, Rietveld, Piet
Format: Article
Language:English
Subjects:
Agglomeration effects
Consumers
Costs
Ecological analysis
Ecological footprint
Economic activity
Economics
Environmental Sciences
Externalities
Externality
F12
F18
Geography
International
Land use
Negative externalities
Population density
Q56
Q57
R12
Regional trade
Regions
Social welfare
Spatial analysis
Spatial configurations
Studies
Sustainable development
Trade advantages
Transport
Urban agglomeration
Welfare economics
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Summary:A welfare framework for the analysis of the spatial dimensions of sustainability is developed. It covers agglomeration effects, interregional trade, negative environmental externalities, and various land use categories. The model is used to compare rankings of spatial configurations according to evaluations based on social welfare and ecological footprint indicators. Five spatial configurations are considered for this purpose. The exercise is operationalized with the help of a two-region model of the economy, that is, in line with the 'new economic geography.' By generating a number of numerical 'counter-examples,' it is shown that the footprint method is inconsistent with an approach aimed at maximum social welfare. Unless environmental externalities are such a large problem that they overwhelm all other components of economic well-being, a 'spatial welfare economic' approach delivers totally different rankings of alternative land use configurations than the ecological footprint.
ISSN:0924-6460
1573-1502
DOI:10.1007/s10640-006-9067-2