Guess I don't have the will power to read this stuff and not reply. Plenty of the poorest of the poor live in rural, suburban and edge cities. And massive movements of people takes time. Put it this way; an argument could be made that in some ways Manhattan is a potential ecotopia (given the amount of stuff tranported in by truck potential only -not actual). But do you think Manhattan would do all that well if you doubled it's population tomorrow? Any reconfiguration of U.S. demographics has to be gradual - at least comparatively.
Do you want to phase out fossil fuel use in the U.S. over 30 years, cutting in by around 2/3rds in 20? Use efficiency measures, low temperature solar and natural zeolite storage to lower energy use in buildings by 70% to 80% per capita - which could be phased in comparatively quickly. Raise U.S. industrial effieincy to European standard - not average European , but European Best Available Front load this with more efficiency lighting, more efficient motors , and more efficinet pumpts so that you have a rapid reduction in electricty use, and the combination of efficiency and solar to massively reduce the use of electricity for water and space heating. That would let you phase in electric cars and trains without having to increase electricaly infrastructure. If you fear oil shortage before you finish this process, front load it further with biodiesul and cellulostic ethanol -which directly displace oil.
In the long run (over the course of 30 years) you can lower use to the point where electricity use is low enough that it can be supplied by a mixture of an existing hydro, wind, geothermal, and solar thermal with storage. (Because while solar thermal is more expensive to generate than wind 10-11 cents per kWh heat can be stored a lot less expensively than electricity). The cost per kWh will be a lot more than at present, but if we have phase in efficiency measures the total cost of energy including additional efficiency infrastrure will be cheaper than the current price of fossil fuels. Biofuels could be reserved for freight trains, planes (which we use much less than at present), industrial use, and for a very small amount of fueled cars and trucks.
With latest generation ultra-light rail, electric trains will be practical even in most suburbs - though development tends to cluster around train lines, so it will gradually increase density in the long run.
I think that in the abscence of the externalities caused by extreme inequality, and a shrunken public sphere - crime, poor services, pollution - dense cities are a more disirable place to live than suburbs. But both sustainability and unsustainabilty are possible with a variety of population densities. Sustainability is a social, not an individiaul choice. To assume that "getting the price signals" right will produce sustainability is to fetishize markets in an area where all the empical evidence is that they perform especially poorly.
Here is the thing about price signals when it comes to energy. There are two reasons why demand elasticity in response to prices signals is poor. One is the obvious that past a certain amount of truly voluntary consumption, energy consumption is largely capital dependent - that is you reduce energy consumption by substituting capital investment which is not a short term investment. But demand elasticity is poor even in the long run, because capital investment in response to price increases is not as large as even modern "semi-rational" market theory predicts. Look for example at most homes in the U.S. . You can go to a D.O.E. web page and find out what level of attic insulation is considered optimal - usually a level that pays for itself within three year. Then go look at most homes; the level of attic insulation is nowhere near that ; instead most people have their attics insulated at the minimum level required by regulation. There was the famous EPA study done in the great lakes some years ago. The EPA hired consultant to go in and sugest energy saving methods that would pay for themselves. Just about every suggestion made was rejected - including some than would have had an *18* *Week* simple payback. Similarly, if you look at the environwise program in Britain, it documents a number of efficiency measure that paid for themselves in six months to two years (simple payback - but that would translate into pretty quick results even on a NPV basis). But every one of those programs was insituted not because the companies were looking for saving, but because new UK regulations required waste reduction. In short energy consumption does not respond well to market signals.
Note that I'm not saying it does not respond at all - but it does not respond well. The market (which does not exist but that is another post) responds to $35/barrel oil as though oil were $20 per barrel (or some other number much lower than $35/barrel). Actually existing firms and indivduals respond to $50 ber barrel oil as though it were$35/barrel or some other number much lower that $50/barrel. That suggest that things like regulation, public spending, and capital fees and subsidies will lower energy consumption much more efficienctly and at a much lower costs that pigovian taxes that "get prices right". I don't agree with you that massive relocation of people from suburbs to the cities is either ecologocially neccesary or ecologically sufficient (though I agree it would be ecologically desirable). But if you convinced me I was wrong, I would favor a regulatory and public works approach over a price driven approach.