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Abstract

In this paper, we study the impact of urbanization on the location of agricultural production and the GHG emissions related to transportation activities. We develop an economic geography model where the location of agricultural activities and urban population are endogenous. We show that increasing agricultural yields induce the spatial concentration of agricultural production in the least urbanized region if agricultural transport costs are relatively low and in the most urbanized region otherwise. In addition, interregional trade in agricultural commodities is desirable to reduce GHG emissions, except when urban population is equally split between cities. However, the market may induce too much agglomeration of agricultural production when yields are high and when collection costs are low.

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