What if Beijing had enforced the 1st or 2nd greenbelt? – Analyses from an economic perspective

Abstract

Many fast growing cities have designated greenbelts but have failed to maintain them. This is often attributed to weak planning regulations, but there is little understanding of the underlying impacts of greenbelts on the interactions among land use control, transport supply and economic activities. This paper presents a counterfactual analytical model to examine the greenbelts’ impacts on consumers’ utility, producers’ productivity, and their locational choices. The model establishes historic-what-if scenarios and compares what historically happened with what could have happened under alternative levels of greenbelt interventions. The model is applied to Beijing, which intended to establish two greenbelts in 1994, but large parts of the greenbelts have disappeared under fast urban expansion. The model compares the economic impacts of the greenbelts as they stood with hypothetical fully-enforced greenbelts and no-greenbelt scenarios from 1990 to 2010. The modelling results show that the two greenbelts, if fully enforced, would have decreased consumer surplus by $202 million in Beijing in 2010. To fulfil the policy aim of decentralisation, transport improvements between the city and new towns are crucial. For a more effective implementation of greenbelts in the future, development constraints could be carefully removed from non-ecologically sensitive sites which are served with good transport conditions.