A Computable General Equilibrium Model For Environment Policy Analysis

This book addresses major issues such as a growing world energy demand, environmental degradation due to anthropogenic greenhouse gas (GHG) emission, and risk management of disastrous events such as pandemics, abnormal climate, and earthquakes. Using cutting-edge analytical tools, particularly computable general equilibrium (CGE) modelling, the analyses are focused on a very wide range of policy-relevant economic questions for the Asia-Pacific region, especially for Japan, China, India, Vietnam, and smaller nations, including Brunei, Timor Leste, and Fiji. The first part considers (a) the effects of climate change on agriculture sectors, energy policies, and future GHG emission trends, (b) adaptation to climate changes in energy policy and its impacts on the economies, and (c) risk management of catastrophic events such as global pandemics. The second part examines (a) energy environmental issues, (b) economic impacts of natural disaster and depopulation, and (c) effects of informatics development on risk management, using CGE modelling and other methods in regional science fields. Contributors are internationally active leading CGE modellers and environmental economists. The book should be greatly beneficial for scholars and graduate students as well as policy makers who are interested in the economic effects and management of risks relating to climate change and disastrous events.

In this collection of 17 articles, top scholars synthesize and analyze scholarship on this widely used tool of policy analysis, setting forth its accomplishments, difficulties, and means of implementation. Though CGE modeling does not play a prominent role in top US graduate schools, it is employed universally in the development of economic policy. This collection is particularly important because it presents a history of modeling applications and examines competing points of view. Presents coherent summaries of CGE theories that inform major model types Covers the construction of CGE databases, model solving, and computer-assisted interpretation of results Shows how CGE modeling has made a contribution to economic policy

Using the computable general equilibrium (CGE) approach, this work develops an integrated economic and environmental model for environmental policy analysis for developing countries. The model is applied to China, and the policies under scrutiny include pollution emission taxes.

The book provides a hands-on introduction to computable general equilibrium (CGE) models, written at an accessible, undergraduate level.

This monograph provides a novel approach to the evaluation of economic policy by combining two different analytical strategies. On the one hand, the computable general equilibrium (CGE) analysis, a standard tool mostly used to quantify the impact of economic measures or changes in the structural data of the economy. On the other hand, the multiple criteria decision-making (MCDM) approach, an op- misation technique that deals with problems with more than one objective. Ty- cally, CGE is well suited for the analysis of the interactions of multiple agents from the point of view of a planner single objective. Combining this technique with the MCDM approach allows developing models in which we ?nd many interacting agents and a decision maker with several objectives. The contribution of this work is partly methodological and partly applied. It provides a framework for the analysis of this type of problems, as well as a series of applications in which the strength of the approach is made clear. The consideration of environmental problems, as a speci?c ?eld in which this technique of analysis can be used, is particularly well chosen. The environmental concern keeps growing steadily and has already become an issue in most of the standard economic decisions. It is therefore extremely important to ?nd systematic ways to introduce such a concern in the models with which we evaluate the impact of policy measures.

This book assesses the magnitude of the effects of trade liberalisation on welfare and the environment in the context of a small open economy, and the degree to which these effects are influenced by environmental policy. It is expected that the results of this study will provide some direction for trade and environmental policies, and will help to fill part of the empirical vacuum in this field. These results will be widely applicable to open-market-based economies and to countries embarking on major liberalisation programs.

The deterioration of forest resources and poor economic performance in the Philippines calls for a serious rethinking in economic policies addressing both environmental and economic objectives. In order to protect the Philippine forests, the government implemented the Master Plan for Forestry Development covering a 25-year period (i.e. 1991-2015). However, after 16 years of implementation, the Philippine forestry industry has experienced a further reduction in production and in areas devoted to old-growth forests. The annual allowable cut remains excessive as it was prior to 1990. This proves to be an important forestry policy instrument as the findings in this book suggest that the volume of timber or the rate of deforestation is directly affected by the annual allowable cut rather than by population growth and poverty. The recent economic literature suggests the possibility of attaining both macroeconomic growth and sustainability in natural resource use. To examine the economy-wide effects of the Master Plan and the plausibility of attaining sustainable growth, a computable general equilibrium (CGE) model is developed with an appended forestry sub-model adopted from Dee (1991). The research found that given steady-state in forestry, the Dee model can serve as a simple representation of forest growth. However, in the context of positive environmental services and non-steady state growth in forestry, the Dee model might be inappropriate. Given the present land use arrangements in the Philippines, the book suggests that the country will meet both objectives of growth and conservation via a combination of a reduction in forestry discount rate and a uniform reduction in sectoral tariffs. Despite the positive effect of uniform tariff reduction on gross domestic product, employment in some sectors is negatively affected particularly that of farmers, fishers and foresters. This indicates the significance of reforestation as an employment generation tool, notwithstanding its benefits towards resource and soil conservation. In general, forest conservation can be achieved with minimal economic sacrifice. Therefore, depending on the capability of the Philippine government to enforce land use policies, a direct set-aside program (national parks) and the implementation of selective logging programs can assist in the regeneration and perpetuation of the Philippine forest. The aim of the book is to illustrate the application of computable general equilibrium (CGE) models in analysing environmental issues, specifically deforestation in countries with limited access to primary/secondary data. It is an outcome of a government funded research project on deforestation in developing economies. We hope that this book will appeal to policy makers, politicians, academics, government officials especially in developing countries, post-graduate students interested in applied general equilibrium research and the like. The book brings into light a state-of-the-art CGE model with empirical applications into forestry policies in a developing Asian economy. Hence the analytical methodology and the empirical policy analysis have a greater applicability to many countries in Asia and beyond where deforestation has become a critical dynamic issue. This book can also be used as a textbook, in advanced courses in economic modeling at graduate level in universities.