Are Smaller Cities More Sustainable? Environmental Externalities in Urban Areas. Evidences from Cities in São Paulo, Brazil

Abstract

The objective of this essay is to explore the relationship between economics of agglomeration, city sizes and negative environmental externalities. Therefore, we contribute to illuminating the controversy on optimal city size, which has been much more concentrated on the reality of developed nations. We emphasize environmental dimensions related to this debate focusing on developing country urban agglomerations. In order to do so we test the hypothesis that smaller cities present better environmental quality indicators than bigger urban centers. Our tentative of rejecting this hypothesis was based upon data on more than 600 cities in the state of Sao Paulo, Brazil, including its capital city of Sao Paulo, one of the largest cities in the world with more than 12 million inhabitants. We used cluster technique for a multivariable analysis with several environmental indicators—for water quality and for solid waste disposal and management—and an aggregated quality of life indicator very similar to the Human Development Indicator (HDI). Our results reject the hypothesis that smaller cities in a developing country reality are more environmentally sustainable than bigger cities.