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An integrated IO and CGE approach to analysing changes in environmental trade balances

Authors


  • The research reported here is an output of Karen Turner's ESRC Climate Change Leadership Fellowship (Grant reference RES-066-27-0029). However, this research builds and draws liberally on research funded by the EPSRC through the SuperGen Marine Energy Research Consortium (Grant reference: EP/EO40136/1). We are grateful to participants at the International Input-Output Association Meeting on Managing the Environment (Seville, July 2008), the 48th Annual Meeting of the Western Regional Science Association (Napa Valley, California, February 2009) and a seminar at the University of Dundee (March 2009) for comments and useful suggestions on earlier versions of this paper. We are also grateful to two anonymous referees for their comments on the intial submission of this paper.

Abstract

Input-output (IO) tables and demand-driven multiplier techniques are absolutely appropriate for conventional pollution attribution (accounting) analyses as they provide all the required information on pollution embodied in intersectoral interactions and interregional trade flows. However, as a model of how the economy adjusts in response to a marginal change in activity, IO is unlikely to be appropriate as it is only a very special case of general equilibrium models. We propose an integrated IO and computable general equilibrium (CGE) approach, with CGE analysis of the impacts of a change in activity and model results used to inform an IO attribution analysis of pollution embodied in interregional trade flows before and after the change is introduced.

Resumen. Las tablas input-output (IO) y las técnicas multiplicadoras en función de la demanda son totalmente apropiadas para los análisis (contables) convencionales de atribución de la contaminación ya que proporcionan toda la información requerida acerca de la contaminación que acompaña a las interacciones intersectoriales y flujos comerciales interregionales Sin embargo, como modelo acerca de cómo la economía se ajusta en respuesta a cambios marginales de la actividad, es poco probable que IO sea apropiado ya que es solamente un caso muy especial de modelos de equilibrio general. Proponemos un enfoque integrado de IO con equilibrio general computable (EGC), con un análisis EGC de los impactos de un cambio en la actividad y siendo los resultados del modelo utilizados para instruir un análisis de atribución IO de la contaminación presente en flujos comerciales interregionales, antes y después de la introducción del cambio.

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