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Incorporating jurisdiction issues into an analysis of carbon attributable to Welsh final consumption under different economic conditions: an integrated IO and CGE analysis

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  • De, Fence Janine
  • McGregor, Peter G
  • Munday, Max
  • Swales, J Kim
  • Turner, Karen

Abstract

This paper considers the combined use of regional input-output (IO) and computable general equilibrium (CGE) methods to examine regional pollution problems from different consumption and production orientated perspectives. The first stage of the analysis involves using a regional input-output framework and data derived on direct CO2 (as carbon) generation by industry (and in household final consumption) to examine regional accountability for CO2 generation. In doing we consider an accounting method that permits greater accountability of regional private and public (household and government) final consumption as the main driver of regional carbon generation, while retaining focus on the local production, technology and consumption decisions that fall under the jurisdiction of regional policymakers. However, we go on to argue that a potential issue arising from the increasing focus on consumption-based „carbon footprint‟ type measures is that regional CO2 generation embodied in export production is attributed outside of the region, while regional consumers are likely to benefit from such production. We demonstrate our argument by using a regional CGE model to simulate the impacts of an increase in export demand for regional production on key macroeconomic variables, including GDP, employment and household consumption, as well as on different measures of CO2 attributable to regional consumption. In terms of the latter, we demonstrate how CGE model results may be used to create „post-shock‟ IO accounts to permit the calculation of CO2 generation under the various production and consumption accounting principles considered in the first part of the paper. Our empirical analyses focus on the case example of the Welsh regional economy and an anticipated increase in export demand for the output of one of the biggest polluting sectors, Iron and Steel production.

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Bibliographic Info

Paper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2010-16.

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Date of creation: Dec 2010
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Handle: RePEc:stl:stledp:2010-16

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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
Phone: +44 (0)1786 467473
Fax: +44 (0)1786 467469
Web page: http://www.econ.stir.ac.uk/
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  1. Druckman, A. & Bradley, P. & Papathanasopoulou, E. & Jackson, T., 2008. "Measuring progress towards carbon reduction in the UK," Ecological Economics, Elsevier, vol. 66(4), pages 594-604, July.
  2. Christa Jensen & Stuart Mcintyre & Max Munday & Karen Turner, 2010. "Incorporating jurisdiction issues into regional carbon accounts under production and consumption accounting principles," Working Papers 1012, University of Strathclyde Business School, Department of Economics.
  3. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, September.
  4. Christa Jensen & Stuart Mcintyre & Max Munday & Karen Turner, 2009. "Responsibility for regional waste generation: A single region extended input-output analysis with uni-directional trade flows," Working Papers 0924, University of Strathclyde Business School, Department of Economics.
  5. Ha, Soo Junga & Turner, Karen & Hewings, Geoffrey, 2009. "An interregional input-output analysis of the pollution content of trade flows and environmental trade balances between five states in the US Mid-West," SIRE Discussion Papers 2009-43, Scottish Institute for Research in Economics (SIRE).
  6. Harrigan, Frank & McGregor, Peter G. & Dourmashkin, Neil & Perman, Roger & Swales, Kim & Yin, Ya Ping, 1991. "AMOS : A macro-micro model of Scotland," Economic Modelling, Elsevier, vol. 8(4), pages 424-479, October.
  7. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
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