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A Conceptual Framework for Integrated Economic-Environmental Modelling

Onil Banerjee (), Martín Cicowiez (), Mark Horridge () and Renato Vargas
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Renato Vargas: World Bank

CEDLAS, Working Papers from CEDLAS, Universidad Nacional de La Plata

Abstract: Economy-wide models such as Computable General Equilibrium (CGE) Models are powerful tools that provide insights on policy impacts on standard economic indicators. With the recent publication of the System of Environmental-Economic Accounts (SEEA), the power of this approach is amplified. This paper addresses an important gap in economy-wide policy modelling applications and literature by developing a conceptual framework for the integration of the SEEA in the CGE framework, enabling for the first time the analysis of policy impacts on the economy and the environment in a quantitative, comprehensive and consistent framework. Previous integrated modelling efforts have generally focused on the interaction between the economy and one environmental resource in isolation, requiring significant data reconciliation. Integration of SEEA into a CGE circumvents this resource intense process, enhancing analytical power, obviating the need for strong assumptions in reconciling economic-environmental data, reducing start-up costs, and increasing the timeliness of evidence-based policy advice.

New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env and nep-res
Date: 2016-09
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