Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Increased urbanization, global warming and sustainable growth belong to the major contemporary policy challenges. Today cities are home to more than 50% of the world population, the largest 600 urban centers generate about 60% of global GDP, and the agglomerated areas are responsible for 75% of world carbon emissions. The UN estimates that 70% of the world's growing population will live in cities by 2050. At the same time the world population is expected to increase from 7 billion people to 9 billion. Thus, the total number of people living in cities will be almost doubled within a period of less than 4 decades. This paper discusses two hypotheses on how this will affect climate change and economic growth.

Keywords: Agglomeration economies; climate change; innovation; growth

JEL-codes: O18; O31; Q54; Q55; R11

13 pages, First version: April 27, 2012. Revised: September 26, 2012.

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