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Modelling the Health Related Benefits of Environmental Policies and Their Feedback Effects: A CGE Analysis for the EU Countries with GEM-E3

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  • Inge Mayeres
  • Denise Van Regemorter

Abstract

A 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 consumersÕ 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 more precise evaluation of the impact of environmental policies on private consumption and employment. Relative to the included benefits the feedback effects are large. 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.

Suggested Citation

  • 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.
    • Handle: RePEc:aen:journl:2008v29-01-a07
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    1. Michael Miess & Stefan Schmelzer & Milan Å Ä asný & VÄ›dunka KopeÄ ná, 2022. "Abatement Technologies and their Social Costs in a Hybrid General Equilibrium Framework," The Energy Journal, , vol. 43(2), pages 153-180, March.
    2. V. Kerry Smith & Min Qiang Zhao, 2016. "Evaluating Economy-Wide Benefit Cost Analyses," NBER Working Papers 22769, National Bureau of Economic Research, Inc.
    3. Magnani, Natalia & Vaona, Andrea, 2013. "Regional spillover effects of renewable energy generation in Italy," Energy Policy, Elsevier, vol. 56(C), pages 663-671.
    4. Nam, Kyung-Min & Selin, Noelle E. & Reilly, John M. & Paltsev, Sergey, 2010. "Measuring welfare loss caused by air pollution in Europe: A CGE analysis," Energy Policy, Elsevier, vol. 38(9), pages 5059-5071, September.
    5. Marten, Alex L. & Newbold, Stephen C., 2017. "Economy-Wide Effects of Mortality Risk Reductions from Environmental Policies," National Center for Environmental Economics-NCEE Working Papers 280938, United States Environmental Protection Agency (EPA).
    6. Fangjin Xu & Qingxu Huang & Huanbi Yue & Xingyun Feng & Haoran Xu & Chunyang He & Peng Yin & Brett A. Bryan, 2023. "The challenge of population aging for mitigating deaths from PM2.5 air pollution in China," Nature Communications, Nature, vol. 14(1), pages 1-13, December.
    7. Omolo, Miriam W.O., 2014. "Construction of Social Accounting Matrix for Kenya 2009," Conference papers 332512, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Ferris, Ann & Garbaccio, Richard & Marten, Alex & Wolverton, Ann, 2017. "The Impacts of Environmental Regulation on the U.S. Economy," National Center for Environmental Economics-NCEE Working Papers 280936, United States Environmental Protection Agency (EPA).
    9. Nathalie Mathieu-Bolh & Xavier Pautrel, 2014. "Environmental taxation, health and the life-cycle," Working Papers hal-00990256, HAL.
    10. repec:hal:wpaper:hal-00930936 is not listed on IDEAS
    11. Gjorgiev, Blazhe & Garrison, Jared B. & Han, Xuejiao & Landis, Florian & van Nieuwkoop, Renger & Raycheva, Elena & Schwarz, Marius & Yan, Xuqian & Demiray, Turhan & Hug, Gabriela & Sansavini, Giovanni, 2022. "Nexus-e: A platform of interfaced high-resolution models for energy-economic assessments of future electricity systems," Applied Energy, Elsevier, vol. 307(C).
    12. Mathieu-Bolh, Nathalie & Pautrel, Xavier, 2016. "Reassessing the effects of environmental taxation when pollution affects health over the life-cycle," Economic Modelling, Elsevier, vol. 52(PB), pages 310-321.
    13. Tourdyeva, Natalia & Bogatova, Irina & Vartanov, Sergey & Denisova, Irina & Chubarova, Tatiana & Shakleina, Marina & Polterovich, Victor, 2021. "Расчетная Модель Общего Равновесия Для Оценки Экономического Эффекта Ранней Диагностики Болезни Паркинсона [Computable general equilibrium model for assessing the economic effect of early diagnosis," MPRA Paper 105182, University Library of Munich, Germany.
    14. Jared C.Carbone & Yuzhou Shen, 2019. "Assessing the Benefits of Air-Quality Improvements in General Equilibrium: A Review," Working Papers 2019-05, Colorado School of Mines, Division of Economics and Business.

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