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Extending Economy-wide Models with Environment-related Parts

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  • Osmo Forssell

Abstract

The aims of this paper are to review and discuss the state-of-the-art in some applied general equilibrium models, and to analyze what kinds of variables and modules should be included in an integrated environmental and economic model. The environment-economy framework is discussed A system of integrated environmental and economic accounting will improve the basic description frame and supply a database for constructing integrated environmental-economic models. Data on natural assets and their functions for human society, such as raw materials, a sink to absorb and recycle waste products, and other environmental services, are then essential. The valuation of the economic use of natural assets is problematic, because they often have non-market values. Measurements which include physical units, non-market valuation, optimal values and non-use values are outlined. A general equilibrium approach for environmental economics provides a conceptual theoretical framework for the construction of integrated environmental-economic models. Extensions of input-output models to represent interactions between the environ-ment and the economy provide an empirically oriented approach. Advanced large-scale models could integrate these two kinds of framework. How these kinds of models have succeeded in practice is considered in a review of a sample of models. Finally, possible extensions to the models are considered

Suggested Citation

  • Osmo Forssell, 1998. "Extending Economy-wide Models with Environment-related Parts," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 183-199.
    • Handle: RePEc:taf:ecsysr:v:10:y:1998:i:2:p:183-199
    DOI: 10.1080/09535319808565473
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    References listed on IDEAS

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    1. Klaus Conrad & Tobias Schmidt, 1998. "Economic Effects of an Uncoordinated Versus a Coordinated Carbon Dioxide Policy in the European Union: An Applied General Equilibrium Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 161-182.
    2. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-271, August.
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    Cited by:

    1. Christian Lutz, 2000. "NO x Emissions and the Use of Advanced Pollution Abatement Techniques in West Germany," Economic Systems Research, Taylor & Francis Journals, vol. 12(3), pages 305-318.
    2. Halkos, George & Tzeremes, Nickolaos, 2011. "Does the Kyoto Protocol Agreement matters? An environmental efficiency analysis," MPRA Paper 30652, University Library of Munich, Germany.
    3. Xia, Yan & Fan, Ying & Yang, Cuihong, 2015. "Assessing the impact of foreign content in China’s exports on the carbon outsourcing hypothesis," Applied Energy, Elsevier, vol. 150(C), pages 296-307.
    4. Lenzen, Manfred, 2003. "Environmentally important paths, linkages and key sectors in the Australian economy," Structural Change and Economic Dynamics, Elsevier, vol. 14(1), pages 1-34, March.
    5. Lenzen, Manfred & Dey, Christopher & Foran, Barney, 2004. "Energy requirements of Sydney households," Ecological Economics, Elsevier, vol. 49(3), pages 375-399, July.
    6. Linda Ferguson & Peter Mcgregor & J. Kim Swales & Karen Turner & Ya Ping Yin, 2005. "Incorporating sustainability indicators into a computable general equilibrium model of the scottish economy," Economic Systems Research, Taylor & Francis Journals, vol. 17(2), pages 103-140.
    7. Dietzenbacher, Erik & Pei, Jiansuo & Yang, Cuihong, 2012. "Trade, production fragmentation, and China's carbon dioxide emissions," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 88-101.

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