Extending Economy-wide Models with Environment-related Parts

Osmo Forssell

Economic Systems Research, 1998, vol. 10, issue 2, 183-199

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

Keywords: Environment-economy framework; large-scale environmental-energy-economy equilibrium models (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/09535319808565473

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