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.
If you think the big problem is humans grabbing more and more space, you might prefer to tax suburbs and subsidize cities. If you think the big problem is humans using more and more energy, the opposite conclusion might follow. Suburbs are bad for burning gas, but they are an especially efficient place to work, buy things, and raise children.
That seems straightforwardly wrong to me.
No one would deny that a Manhattanite represents some quantity of externalized costs: land to grow food, factories to make goods, fuel to transport food and goods, coal plants to generate electricity, landfill space to bury refuse, etc. The point is that when those costs are balanced against the savings, the result is favorable to Manhattanites. They use lower net energy per capita than suburbanites -- that's the comparison that matters.
Imagine 1.8 million Manhattanites fanning out into the hinterlands (oh, the outcry). Give them each an acre for their house and yard. Run power lines and gas lines and sewer lines to them. Pave their roads. Stock their big box retail outlets. Do this for around 2,800 square miles of suburbia. Anybody think the net energy use would go down?
(The comment thread is worth reading.)