The Environmental Costing Model: a tool for more efficient environmental policymaking in Flanders
AbstractThe environmental costing model (Milieu-Kosten-Model or MKM in Dutch) is a tool for assessing cost-efficiency of environmental policy. The present paper describes the modelling methodology and illustrates it by presenting numerical simulations for selected multi-sector and multi-pollutant emission control problems for Flanders. First, the paper situates the concept of cost-efficiency in the context of Flemish environmental policy and motivates the chosen approach. Secondly, the structure of the numerical simulation model is laid out. The basic model input is an extensive database of potential emission reduction measures for several pollutants and several sectors. Each measure is characterized by its specific emission reduction potential and average abatement cost. The MKM determines, by means of linear programming techniques, least-cost combinations of abatement measures as to satisfy, possibly multi-pollutant, emission standards. Emission reduction targets can be imposed for Flanders as a whole, per sector or even per installation. The measures can be constrained to satisfy “equal treatment” of sectors and several other political feasibility constraints. Thirdly, the features of the model are illustrated by means of a multi-sector (non-ferrous, chemical and ceramics industry) and multi-pollutant (SO2, NOx) example. Results show clearly that important cost savings are possible by allowing for more flexibility (emission standards for Flanders as a whole instead of per sector). Cost savings from taking into account explicitly the multi-pollutant nature of environmental regulation are modest for the current test version of the database.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0405.
Length: 26 pages
Date of creation: Mar 2004
Date of revision:
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More information through EDIRC
environmental economics; cost efficiency; multi-pollutant emission control problem; numerical simulation model; linear programming;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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- Dellink, Rob & Hofkes, Marjan & van Ierland, Ekko & Verbruggen, Harmen, 2004. "Dynamic modelling of pollution abatement in a CGE framework," Economic Modelling, Elsevier, vol. 21(6), pages 965-989, December.
- Wustenberghs, H. & Broekx, S. & Van Hoof, K. & Claeys, Dakerlia & D'Heygere, T. & D'Hooghe, J. & Dessers, R. & Huysmans, T. & Lauwers, Ludwig H. & Meynaerts, E. & Vercaemst, P., 2008. "Cost-benefit analysis of abatement measures for nutrient emission from agriculture," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44245, European Association of Agricultural Economists.
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