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General Equilibrium Modelling of Trade and the Environment


Author Info

  • John Beghin
  • Sébastien Dessus
  • David Roland-Holst
  • Dominique van der Mensbrugghe


The environmental impacts of economic activity have become an increasingly urgent concern in both OECD Member countries, as well as in non-Member countries. Research in this area is still in its infancy, and the data required to buttress analytical studies is still sparse. This paper describes the base model specification for a series of six country case studies undertaken at the OECD Development Centre to analyse the links between growth and emissions, and emissions and trade instruments. The model attempts to capture some of the key features relating to environmental emissions. These features include: a ) linking emissions to the consumption of polluting inputs (as opposed to output); b ) including emissions generated by final demand consumption; c ) integrating substitutability between polluting and non-polluting inputs (including capital and labour); d ) capturing important dynamic effects such as capital accumulation, population growth, productivity and technological ... L’intérêt porté aux conséquences de l’activité économique sur l’environnement s’est considérablement accru, aussi bien dans les pays Membres de l’OCDE que dans les pays non membres. La recherche dans ce domaine est encore balbutiante, et les données nécessaires à l’analyse empirique encore trop rares. Ce document décrit les spécifications du modèle utilisé pour les six études de cas entreprises au Centre de Développement de l’OCDE, afin d’étudier d’une part les liens entre la croissance et la pollution et, d’autre part, les liens entre la pollution et les politiques commerciales. Le modèle tend à décrire plusieurs phénomènes clés de la relation entre environnement et activité économique. Ainsi, le modèle a ) relie les émissions de pollution à la consommation de produits polluants (et non à la production) ; b ) inclut les émissions provenant de la demande finale ; c ) intègre une possibilité de substitution entre intrants polluants et non polluants (comme le capital ou le travail) ; d ) ...

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Development Centre Working Papers with number 116.

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Date of creation: Sep 1996
Date of revision:
Handle: RePEc:oec:devaaa:116-en

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Cited by:
  1. Cororaton, Caesar B. & Aldaba, Rafaelita M., 2001. "Trade Liberalization and Pollution: Evidence from the Philippines," Discussion Papers DP 2001-25, Philippine Institute for Development Studies.
  2. Thierry Mayer, 2006. "Policy Coherence for Development: A Background Paper on Foreign Direct Investment," OECD Development Centre Working Papers 253, OECD Publishing.
  3. Jie He & David Roland-Holst, 2010. "Economic Growth, Energy demand and Atmospheric Pollution: Challenges and Opportunities for China in the future 30 years," Cahiers de recherche, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke 10-11, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  4. Raúl O’Ryan & Carlos J. de Miguel & Sebastián Miller, 2003. "The ECOGEM-Chile Model: A CGE Model for Environmental and Trade Policy Analysis," Working Papers Central Bank of Chile, Central Bank of Chile 247, Central Bank of Chile.
  5. Dessus, Sebastien & Bussolo, Maurizio, 1998. "Is There a Trade-off Between Trade Liberalization and Pollution Abatement?: A Computable General Equilibrium Assessment Applied to Costa Rica," Journal of Policy Modeling, Elsevier, Elsevier, vol. 20(1), pages 11-31, February.
  6. Raúl O'Ryan & Sebastian Miller & Carlos J. de Miguel, 2001. "Environmental Taxes, Inefficient Subsidies and Income Distribution in Chile: A CGE framework," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 98, Centro de Economía Aplicada, Universidad de Chile.
  7. Chemingui, Mohamed Abdelbasset, 2007. "Public spending and poverty reduction in an oil-based economy: The case of Yemen," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 701, International Food Policy Research Institute (IFPRI).
  8. Conrad, Klaus, 2001. "Computable General equilibrium Models in Environmental and Resource Economics," Discussion Papers, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre 601, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
  9. Sébastien Dessus & David O'Connor, 2003. "Climate Policy without Tears CGE-Based Ancillary Benefits Estimates for Chile," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 25(3), pages 287-317, July.
  10. Raúl O´Ryan & Carlos J. De Miguel & Sebastián Miller, 2005. "General Equilibrium Analysis of a Fuel Tax Increase in Chile," Central Banking, Analysis, and Economic Policies Book Series, Central Bank of Chile, in: Rómulo A. Chumacero & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel ( (ed.), General Equilibrium Models for the Chilean Economy, edition 1, volume 9, chapter 10, pages 345-374 Central Bank of Chile.
  11. Saunders, Caroline M. & Roningen, Vernon O., 2001. "Trade And The Environment. Linking A Partial Equilibrium Trade Model With Production Systems And Their Environmental Consequences," International Trade in Livestock Products Symposium, January 18-19, 2001, Auckland, New Zealand, International Agricultural Trade Research Consortium 14552, International Agricultural Trade Research Consortium.
  12. Ra�l O'Ryan & Carlos J. de Miguel & Sebastian Miller, 2005. "A Cge Model for Environmental and Trade Policy Analysis in Chile: Case Study for Fuel Tax Increases," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 211, Centro de Economía Aplicada, Universidad de Chile.
  13. O'Ryan, Raúl & de Miguel, Carlos J. & Miller, Sebastian & Munasinghe, Mohan, 2005. "Computable general equilibrium model analysis of economywide cross effects of social and environmental policies in Chile," Ecological Economics, Elsevier, Elsevier, vol. 54(4), pages 447-472, September.
  14. Mani, Muthukumara & Markandya, Anil & Sagar, Aarsi & Sahin, Sebnem, 2012. "India’s economic growth and environmental sustainability : what are the tradeoffs ?," Policy Research Working Paper Series 6208, The World Bank.
  15. Cemal Atici, 2008. "Agricultural Policies and Environmental Interaction in OECD Contries," ICER Working Papers, ICER - International Centre for Economic Research 26-2008, ICER - International Centre for Economic Research.


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