Geoffrey West's New Book; Scale

Geoffrey West has just  published a new book Scale that was recently reviewed in The Economist.  I have met Geoffrey on several occasions.  I’m a big fan of his and I have few points to make.  First, what is “scale”?   If Los Angeles had twice as many cars driving around, would congestion and pollution double?  This is a scale effect.

A major point in modern environmental and urban economics is that when considering urban ills that there are composition and technique effects that can offset scale effects.

If we are driving more, but the cars are Teslas and the electicity is generated from renewables then such technique offsets the scale effect of driving more.    This logic is at the heart of the modern environmental kuznets curve hypothesis.

If there are more cars on the road but government introduces dynamic road pricing,  traffic congestion can decline.  Both exogenous technological progress and Pigouvian government policy can offset scale effects.

Composition focuses on the types of economic activity. Pittsburgh is cleaner now because industry shifted from steel to human capital focused.  LA is cleaner now because pre-1975 vehicles have been retired from the fleet.

Scale matters but composition and technique effects can’t be forgotten.