An Optimized Microeconomic Modeling System for Analyzing Industrial Externalities in Non-OECD Countries (original) (raw)

International externalities in the use of pollution policies

International Review of Law and Economics, 1996

The paper examines a simple partial equilibrium model of a polluting industry in a world economy. Optimal pollution taxes are derived and compared for the countries individually and collectively. Objective functions of governments are permitted to give different weights to producers than to other interests, in recognition of distributional, political economy, or other objectives. It is shown that if 1) pollution does not spill across national borders, and if 2) countries are too small to affect world prices with their pollution policies, then the pollution taxes that countries set independently cannot be improved upon by international cooperation. If these conditions are not satisfied, however, then independently set pollution policies will not be optimal. If pollution spills across borders, this will cause countries to set pollution taxes too low. In contrast, if countries are large enough to affect world prices, then exporting countries will set pollution taxes too high and importing countries will set them too low. However, if the two conditions are satisfied, then pursuit by governments of political-economy or other distributional objectives does not interfere with their achieving policies that cannot be improved upon-in terms of these objectives-by international cooperation.

Internalisation of externalities: Who bears the cost of pollution control

The Environmentalist, 1991

The impact of environmental regulations on the welfare of Malaysian palm oil growers, producers, and refiners are evaluated in an open-economy model. The estimated incremental effects of effluent standards and changes have been specifically rather small, with the exception of those upon the growers, but the cumulative effects have been considerable.

Integrated Economy/Energy/Environment Models

… the Environment Comparative Assessment in Support …, 1995

The paper presents a review of alternative methodologies in the field of economy, energy and environment (E 3 ) modelling with particular emphasis on the computable general equilibrium approaches, and the European Commission's newly developed models

A dynamic interindustry model for the economic analysis of pollution abatement

Environment and Planning A, 1974

A two-component model is presented for the analysis of the economic impact of pollution abatement. The primary component is a dynamic input-output system in which the structure of the economy is related to the level of environmental control as well as to time. A submodel, which consists of the various abatement activities within each industry, is used to explore the underlying nature of structural changes which take place as a result of changes in environmental regulations. The usefulness of the overall model for policy and planning purposes is illustrated by an example in which the submodel is transformed into a linear-programming format. p

An analysis of the economic models and instruments for environmental policies

Recent Advances in …, 2008

In the literature it is presented the active role of economic models in the optimal design of instruments dedicated to environmental problems. After Pareto (1896), Pigou (1920) and Kaldor-Hicks criterion (1939), in the literature the preference was focused on the C2-command and control mechanisms and cost benefit analysis (CBA). Our proposal is to realize a mix between CBA and real option analysis (ROA) into a dedicated framework for analysis and design of environmental policies. Environmental policies are focused on an intelligent selection of specific policy instruments based on an efficient examination of potential criteria for assessing alternative tools, with focus on flexibility, modularity and cost minimizing. Pollution is an externality, an unintended consequence of market decisions, which affects individuals other than the decision maker and the internalization of the full costs was considered the unique solution to the externality problem. Pigou (1920) proposed a tax on emissions equal to the cost of the related damages at the efficient level of control. Coase (1960) proposed a framework with no transaction costs, wealth/ income effects/ third-party impacts, and demonstrated that the negotiating parties will reach socially desirable agreements and the global amount of pollution will be independent of the assignment of property rights. These assumptions are not proper for most environmental problems and private negotiation will not fully internalize these externalities. In this case there is a need for significant changes in environmental policy based on the acceptance of market instruments.

Applied general equilibrium analysis of trade and environmental issues

2000

This thesis uses general-equilibrium numerical-simulation techniques to analyse trade and environmental issues. It tries to take applied general equilibrium modelling in these areas beyond their traditional confines in a number of ways. These include endogenous incorporation of international capital flows into trade models, decomposition of observed economic outcomes, and computation of bargaining solutions and non-cooperative equilibria. Chapter 1 analyses the welfare, income distribution and macroeconomic implications of trade liberalisation and increased indirect taxation in El Salvador. It is found that these policies have little effect on welfare and income distribution, but a significant impact on macroeconomic aggregates. Chapter 2 examines trade liberalisation when foreign direct investment (FDI) flows and international capital income taxation are present, using data for Costa Rica. The main finding is that, once FDI flows and its taxation are taken into consideration, trade...