Modelling the health related benefits of environmental policies and their feedback effects, a CGE analysis for the EU countries with GEM-E3
AbstractA number of recent studies on taxation in the presence of externalities in a second-best framework consider the implications of taking into account the feedback effects of environmental quality. This paper explores by means of GEM-E3, a computable general equilibrium model for the EU countries, the importance of the feedback effects of the health related benefits from an environmental policy. The modelling framework implemented in GEM-E3 allows for three channels through which the feedback can occur: a decrease in medical expenditure, an increase in the consumers" available time and an increase of labour productivity in the production sectors. The results show that the explicit modelling of the health related effect of air pollution on consumers and producers allows for a better evaluation of the impact of environmental policies on private consumption and employment. However, in terms of global effect, the impacts of the feedback are small, compared to the standard GEM-E3 model where the health related benefits are evaluated ex-post
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 2004 with number 39.
Date of creation: 11 Aug 2004
Date of revision:
applied general equilibrium model; non-separable externalities; CO2 tax; environment; ancillary benefits;
Other versions of this item:
- Inge Mayeres & Denise Van Regemorter, 2008. "Modelling the Health Related Benefits of Environmental Policies and Their Feedback Effects: A CGE Analysis for the EU Countries with GEM-E3," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 135-150.
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D62 - Microeconomics - - Welfare Economics - - - Externalities
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