Matthew E. Kahn


On his book Climatopolis: How Our Cities Will Thrive in the Hotter Future

Cover Interview of May 24, 2011

The wide angle

I am an academic economist and most of my research has focused on the quality of life of cities.

Most economists agree that the key for long run city sustainability is attracting and retaining the skilled.  Detroit is poor today because the skilled and the “creative class” do not want to live and work there.  Google would open branches in Detroit if enough of its team wanted to live there.

Where do people want to live?  I have argued that local quality of life is a crucial factor.  And environmental quality—ranging from day to day climate, to local pollution levels and access to green space—is a key ingredient in determining a city’s quality of life.

I have been quite interested in the quality of life dynamics of cities such as Pittsburgh as it de-industrialized.  Today, I am studying whether China’s major cities will enjoy a similar environmental improvement as they shift their industrial structure and invest in environmental regulation.

In 2006, the Brookings Institution Press published my Green Cities: Urban Growth and the Environment.  That book focused on how local pollution challenges such air pollution, water pollution, and access to green space evolves in a growing economy.

Today, such local indicators of environmental quality are all improving in the United States.  Rising income and technological advance and shifts in the location of manufacturing of goods have allowed us to enjoy both ongoing growth and improved environmental quality at the same time.

Climatopolis is meant to be a sequel to Green Cities.  While predicting the future is challenging, the book sketches a logical set of claims for how our free market system will facilitate migration and innovation and behavioral change at the individual and firm level that collectively will help us to adapt to the evolving threat of climate change.

The book’s emphasis on the power of free markets has angered liberals.

The first reason for this is the fear of the “lulling effect.”  Activists deeply desire carbon mitigation now.  If we even begin to consider an optimistic view of our ability to adapt to climate change, then this lulls Joe the Plumber and other middle class moderates into not taking costly action now.

It will be easier to adapt to climate change if we reduce our greenhouse gas emissions now.  But we have not reduced our emissions.  So it is my job as a researcher to think hard about what is likely to happen next.

Free market capitalism is an evolving system.  Its hallmark is the introduction of new products in a trial and error process.

Entrepreneurs are one percent of the world’s population.  If climate change becomes the dominant problem we face moving forward, do you doubt that our 70 million entrepreneurs will all fail?

The second reason my book has offended some liberals is that I do not make government “the star” actor.

In fact, I argue that there are many cases in which government policy will impede climate change adaptation.

Today, in Los Angeles water is priced at .5 cents a gallon.  This price is set by a non-profit agency—not by market forces.  When consumers face artificially low prices, they have no incentive to economize or to seek out more water efficient appliances.

On the other hand, my book has not interested political conservatives either: I take the challenge of climate change very seriously.