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

Abstract

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.