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Towards a dynamic Ecol-Econ CGE model with forest as biomass capital

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    Abstract

    This study presents a Dynamic Computable General Equilibrium model that combines economic and ecological aspects of forest biomass. A framework is introduced for modeling the growth of a biomass stock which interacts with economic sectors. Harvest of and demand for forest products and forest amenities are determined endogenously in an inter-temporally consistent way. The idea is based on a Markovian growth model of the forest. The study demonstrates an approach for incorporating non-market values of forests, such as carbon sequestration, recreation and biodiversity, into a growth model. A simulation illustrates harvest behaviour when the economy is subjected to shocks.

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    File URL: http://www.cere.se/documents/wp/CERE_2010_6.pdf
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    Bibliographic Info

    Paper provided by CERE - the Center for Environmental and Resource Economics in its series CERE Working Papers with number 2010:6.

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    Length: 24 pages
    Date of creation: 12 Nov 2010
    Date of revision:
    Handle: RePEc:hhs:slucer:2010_006

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    Web page: http://www.cere.se

    Related research

    Keywords: Dynamic CGE; Markovian growth; Ecosystem modeling; Inter-temporal optimization; Infinite-horizon equilibria;

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