MOLES: A New Approach to Modeling the Environmental and Economic Impacts of Urban Policies

This paper presents the Multi-Objective Local Environmental Simulator (MOLES), an urban Computable General Equilibrium model with selected microsimulation features that links urban land use, mobility patterns and their environmental impacts. The model is tailored to uncover the trade-offs between environmental and economic performance in urban areas. It is also designed to capture the synergetic effects of urban planning and transportation policies. We demonstrate the model's structure, functions and algorithms through an application to Auckland, New Zealand. The application explores the environmental, fiscal and welfare impacts of a reform that promotes a massive switch to public transportation. We show that, in order to achieve that objective, such a reform should drastically increase the kilometer cost of car use and provide considerable subsidies to public transportation. We find that, in spite of these subsidies, the reform will have a fiscal surplus and will generate substantial welfare gains.

Automated summary

MOLES is an urban Computable General Equilibrium model that aims to uncover the trade-offs between environmental and economic performance in urban areas, capturing the synergetic effects of urban planning and transportation policies. Through an application to Auckland, New Zealand, it was found that a reform promoting a massive switch to public transportation requires increasing the kilometer cost of car use and providing subsidies to public transportation, resulting in fiscal surplus and substantial welfare gains.