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Dynamic CGE-model with heterogeneous forest biomass: Applications to climate policy

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  • Furtenback, Örjan

    ()
    (CERE, Centre for Environmental and Resource Economics)

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    Abstract

    This study introduces a framework for modeling a renewable forest biomass stock interacting with economic sectors in a competitive economy. The equilibrium is formulated as a mixed complementary problem (which explicitly represents weak inequalities and complementary among decision variables and equilibrium conditions). The complementarity format permits detailed modeling of the growth and harvest of a biomass stock together with a second-best characterization of the overall economy. First the complementarity features of economic equilibrium and its integration with an ecological representation of the biomass are provided. Then a stylized numerical example of a dynamic computable general equilibrium model is presented. Finally, illustrative applications of the model for gauging the likely effects of environmental subsidies and taxes intended to promote increases CO2 storage in forest biomass are given, the results are discussed.

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    File URL: http://www-sekon.slu.se/~gbost/CERE_WP2011-10.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 2011:10.

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    Length: 87 pages
    Date of creation: 27 May 2011
    Date of revision:
    Handle: RePEc:hhs:slucer:2011_010

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

    Related research

    Keywords: Dynamic CGE; Ecosystem modeling; Inter-temporal optimization; Infinite-horizon equilibrium;

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