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Bio-economic modeling of water quality improvements using a dynamic applied general equilibrium approach

Author

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  • Dellink, Rob
  • Brouwer, Roy
  • Linderhof, Vincent
  • Stone, Karin

Abstract

An integrated bio-economic model is developed to assess the impacts of pollution reduction policies on water quality and the economy. Emission levels of economic activities to water are determined based on existing environmental accounts. These emission levels are built into a dynamic economic model for the Dutch economy and subsequently coupled to a national water quality model. The modular approach has the advantage that the impacts on the economy and water quality are evaluated simultaneously, but each within their own domain based on the appropriate scale and level of detail. The dynamic nature of the economic model allows us to also evaluate a derogated water policy as foreseen in the European Water Framework Directive. The indirect costs of different water quality improvement policy scenarios are at least as high as the direct costs related to investments in pollution abatement technology. The stricter the policy scenario, the more important the role of economic adjustment and restructuring mechanisms at the macro-economic level. Significant water quality improvements can be achieved through stringent domestic emission reductions. However, reaching water quality standards is highly dependent on water quality improvement policy in surrounding river basin countries and climate change.

Suggested Citation

  • Dellink, Rob & Brouwer, Roy & Linderhof, Vincent & Stone, Karin, 2011. "Bio-economic modeling of water quality improvements using a dynamic applied general equilibrium approach," Ecological Economics, Elsevier, vol. 71(C), pages 63-79.
  • Handle: RePEc:eee:ecolec:v:71:y:2011:i:c:p:63-79
    DOI: 10.1016/j.ecolecon.2011.06.001
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    References listed on IDEAS

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    Cited by:

    1. Bauer, Dana Marie & Sue Wing, Ian, 2016. "The macroeconomic cost of catastrophic pollinator declines," Ecological Economics, Elsevier, vol. 126(C), pages 1-13.
    2. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    3. Cyril Bourgeois & Pierre-Alain Jayet & Florence Habets & Pascal Viennot, 2018. "Estimating the Marginal Social Value of Agriculturally Driven Nitrate Concentrations in an Aquifer: A Combined Theoretical-Applied Approach," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-30, January.
    4. Jacobsen, Lars-Bo & Nielsen, Max & Nielsen, Rasmus, 2016. "Gains of integrating sector-wise pollution regulation: The case of nitrogen in Danish crop production and aquaculture," Ecological Economics, Elsevier, vol. 129(C), pages 172-181.

    More about this item

    Keywords

    Bio-economic model; Applied general equilibrium model; Water quality model;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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