I started writing this post and it got completely out of hand, I could not come to a conclusion, so I just decided to turn it into a survey and find out what you think.
It is a TreeHugger mantra that "Cities are the most efficient way to live" and that "if it were granted statehood, New York City would rank 51st in per-capita energy use." as David Owen says in a New Yorker article. Owen continues: "The key to New York's relative environmental benignity is its extreme compactness. Manhattan's population density is more than eight hundred times that of the nation as a whole. Placing one and a half million people on a twenty-three-square-mile island sharply reduces their opportunities to be wasteful, and forces the majority to live in some of the most inherently energy efficient residential structures in the world: apartment buildings.."
In January Edward Glaeser picked up the theme and said "Manhattan, not suburbia, is the real friend of the environment. Those alleged nature lovers who live on multiacre estates surrounded by trees and lawn consume vast amounts of space and energy. If the environmental footprint of the average suburban home is a size 15 hiking boot, the environmental footprint of a New York apartment is a stiletto-heeled Jimmy Choo."
Economist Tyler Cowen suggests otherwise; "Manhattan sells services, most notably finance and entertainment, to the rest of America, and in turns draws upon industrial outputs, which of course include steel and glass. It is also no accident that Gary, Indiana is near Chicago and those rather aesthetically thrilling factories off the New Jersey Turnpike are right outside New York City. .. Praising Manhattan is a bit like looking only at the roof of a car and concluding it doesn't burn much gas. Manhattan supports its density only by being surrounded by a broader load of crud." -Cities appear greener because they are exporting dirty production, previously to Gary, Indiana and now to China. He goes on to say "Suburbs are bad for burning gas, but they are an especially efficient place to work, buy things, and raise children. "
James Howard Kunstler, on the third hand, says "Virtually every place in our nation organized for car dependency is going to fail to some degree. Quite a few places (Phoenix, Las Vegas, Miami....) will support only a fraction of their current populations. We'll have to return to traditional human ecologies at a smaller scale: villages, towns, and cities (along with a productive rural landscape). Our small towns are waiting to be reinhabited. Our cities will have to contract."