Internalization of the external costs of global environmental damage in an integrated assessment model
This study simulates the internalization of the external costs of major global environmental issues using an optimal economic growth model. We merged two existing models: an integrated assessment model (IAM) and a life-cycle impact assessment (LCIA) model. We sought to achieve simultaneously the following three objectives: (i) to incorporate environmental issues including global warming in the IAM; (ii) to assess environmental impacts with a bottom-up approach from the LCIA; and (iii) to internalize external costs obtained from the environmental impact study. The study also provides initial simulation results obtained from the merged model. Simulation results indicate that global warming will account for somewhere from 10% to 40% of all external costs in the 21st century. The remaining cost will come from land use and its changes. The internalization of the external cost will cause a decline in economic growth by approximately 5%, whereas forest preservation will increase by 40% and fossil-fuel consumption will be reduced by 15%. The estimated sustainability indicators imply that a necessary condition of sustainable development is satisfied for the entire world and for the developed countries during the 21st century, but is not satisfied until the latter half of this century for the developing counties.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rafaj, Peter & Kypreos, Socrates, 2007. "Internalisation of external cost in the power generation sector: Analysis with Global Multi-regional MARKAL model," Energy Policy, Elsevier, vol. 35(2), pages 828-843, February.
- Kenneth J. Arrow & Partha Dasgupta & Karl-Göran Mäler, 2003. "The genuine savings criterion and the value of population," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 21(2), pages 217-225, 03.
- Hamilton, Kirk & Atkinson, Giles, 1996. "Air pollution and green accounts," Energy Policy, Elsevier, vol. 24(7), pages 675-684, July.
- Nguyen, Khanh Q., 2008. "Internalizing externalities into capacity expansion planning: The case of electricity in Vietnam," Energy, Elsevier, vol. 33(5), pages 740-746.
- Atsushi Kurosawa, 2006. "Multigas Mitigation: An Economic Analysis Using GRAPE Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 275-288.
- Yasushi Honda & Masaji Ono & Akihiko Sasaki & Iwao Uchiyama, 1998. "Shift of the short-term temperature mortality relationship by a climate factor - some evidence necessary to take account of in estimating the health effect of global warming," Journal of Risk Research, Taylor & Francis Journals, vol. 1(3), pages 209-220, July.
- Kirk Hamilton, 2003. "Sustaining Economic Welfare: Estimating Changes in Total and Per Capita Wealth," Environment, Development and Sustainability- A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 5(3), pages 419-436, September.
- repec:reg:rpubli:132 is not listed on IDEAS
- Klaassen, Ger & Riahi, Keywan, 2007. "Internalizing externalities of electricity generation: An analysis with MESSAGE-MACRO," Energy Policy, Elsevier, vol. 35(2), pages 815-827, February.
- Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change, Part II. Dynamic Estimates," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(2), pages 135-160, February.
- Atsushi Kurosawa & Hiroshi Yagita & Weisheng Zhou & Koji Tokimatsu & Yukio Yanagisawa, 1999. "Analysis of Carbon Emission Stabilization Targets and Adaptation by Integrated Assessment Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 157-175.
- Geir Asheim, 2004.
"Green national accounting with a changing population,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 601-619, March.
- Asheim, Geir, 2003. "Green national accounting with a changing population," Memorandum 06/2003, Oslo University, Department of Economics.
- Alan Manne & Richard Richels, 1992. "Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits," MIT Press Books, The MIT Press, edition 1, volume 1, number 026213280x, December.
- Holmgren, Kristina & Amiri, Shahnaz, 2007. "Internalising external costs of electricity and heat production in a municipal energy system," Energy Policy, Elsevier, vol. 35(10), pages 5242-5253, October.
- World Bank, 2007. "World Development Indicators 2007," World Bank Publications, The World Bank, number 8150, April.
- Kurosawa, Atsushi, 2004. "Carbon concentration target and technological choice," Energy Economics, Elsevier, vol. 26(4), pages 675-684, July.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:7:p:2664-2678. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.