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The Cost of Improving the Quality of the Environment

Author

Listed:
  • R Boyd

    (Department of Economics, Ohio University, Athens, OH 45701, USA)

  • N D Uri

    (Resources and Technology Division, Economic Research Service, Room 428, US Department of Agriculture, 1301 New York Avenue, NW, Washington, DC 20005, USA)

Abstract

The analysis in this paper is directed at comparing the relative effectiveness of two different methods of meeting the Bush Administration's goals outlined in the Clean Air Plan. The analytical vehicle used in the analysis consists of a computable general equilibrium model composed of twelve producing sectors, thirteen consuming sectors, six household categories classified by income, a foreign sector, and a government. First, it is found that irrespective of what type of strategy is followed to improve environmental quality, both output and consumption decline as does household utility. Hence, there is a quantifiable trade-off between economic activity (economic growth) and the quality of the environment. Beyond this, the aggregate loss in production and economic welfare (measured by consumption expenditures and utility) is less under a policy which stresses reliance on alternative fuels (brought about by taxation) than through one that requires the installation of pollution-abatement devices (that is, regulation).

Suggested Citation

  • R Boyd & N D Uri, 1991. "The Cost of Improving the Quality of the Environment," Environment and Planning A, , vol. 23(8), pages 1163-1182, August.
    • Handle: RePEc:sae:envira:v:23:y:1991:i:8:p:1163-1182
    DOI: 10.1068/a231163
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Berck, Peter & Hess, Peter, 2000. "Developing a methodology for assessing the economic impacts of large scale environmental regulations," CUDARE Working Papers 43917, University of California, Berkeley, Department of Agricultural and Resource Economics.
    2. Rask, Kevin, 2004. "Clean air policy and oxygenated fuels: do we get what we pay for?," Energy Economics, Elsevier, vol. 26(1), pages 161-177, January.
    3. He, Hongming & Jim, C.Y., 2012. "Coupling model of energy consumption with changes in environmental utility," Energy Policy, Elsevier, vol. 43(C), pages 235-243.
    4. Ferng, Jiun-Jiun, 2002. "Toward a scenario analysis framework for energy footprints," Ecological Economics, Elsevier, vol. 40(1), pages 53-69, January.
    5. Nestor, Deborah Vaughn & Pasurka Jr, Carl A, 1995. "CGE model of pollution abatement processes for assessing the economic effects of environmental policy," Economic Modelling, Elsevier, vol. 12(1), pages 53-59, January.
    6. Berck, Peter & Hess, Peter, 2000. "Developing a methodology for assessing the economic impacts of large scale environmental regulations," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt51v1b6wm, Department of Agricultural & Resource Economics, UC Berkeley.
    7. Mao Xianqiang & Yang Shuqian & Liu Qin, 2013. "The Way to CO2 Emission Reduction and the Co-benefits of Local Air Pollution Control in China's Transportation Sector: A Policy and Economic Analysis," EEPSEA Research Report rr2013036, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2013.
    8. Kiuila, Olga & Peszko, Grzegorz, 2006. "Sectoral and macroeconomic impacts of the large combustion plants in Poland: A general equilibrium analysis," Energy Economics, Elsevier, vol. 28(3), pages 288-307, May.
    9. Xie, Jian & Saltzman, Sidney, 2000. "Environmental Policy Analysis: An Environmental Computable General-Equilibrium Approach for Developing Countries," Journal of Policy Modeling, Elsevier, vol. 22(4), pages 453-489, July.

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