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Modelling the health related benefits of environmental policies - a CGE analysis for the eu countries with gem-e3

Author Info

Listed author(s):
  • Inge Mayeres

    ()

    (K.U.Leuven, C.E.S., Energy, Transport and Environment)

  • Denise Van Regemorter

    ()

    (K.U.Leuven, C.E.S., Energy, Transport and Environment)

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 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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File URL: https://lirias.kuleuven.be/bitstream/123456789/120238/1/ETE-WP-2003-10.pdf
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Paper provided by KU Leuven, Department of Economics - Research Group Energy, Transport and Environment in its series Energy, Transport and Environment Working Papers Series with number ete0310.

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Length: 32 pages
Date of creation: Sep 2003
Handle: RePEc:ete:etewps:ete0310
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Keywords: applied general equilibrium model; non-separable externalities; CO2 tax; environment; ancillary benefits;

Find related papers by JEL classification:

  • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
  • D62 - Microeconomics - - Welfare Economics - - - Externalities

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  1. Gerking, Shelby & Stanley, Linda R, 1986. "An Economic Analysis of Air Pollution and Health: The Case of St. Louis," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 115-121, February.
  2. Jesse Schwartz & Robert Repetto, 2000. "Nonseparable Utility and the Double Dividend Debate: Reconsidering the Tax-Interaction Effect," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(2), pages 149-157, February.
  3. Mayeres, Inge & Proost, Stef, 1997. " Optimal Tax and Public Investment Rules for Congestion Type of Externalities," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 261-279, June.
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Cited by:

  1. Parry, Ian W.H., 2008. "How should heavy-duty trucks be taxed?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 651-668, March.
  2. De Borger, Bruno & Mayeres, Inge, 2007. "Optimal taxation of car ownership, car use and public transport: Insights derived from a discrete choice numerical optimization model," European Economic Review, Elsevier, vol. 51(5), pages 1177-1204, July.
  3. Linda Ferguson & Peter Mcgregor & J. Kim Swales & Karen Turner & Ya Ping Yin, 2005. "Incorporating sustainability indicators into a computable general equilibrium model of the scottish economy," Economic Systems Research, Taylor & Francis Journals, vol. 17(2), pages 103-140.
  4. Denise VAN REGEMORTER & Bert SAVEYN, "undated". "Environmental Policy in a Federal State: A Regional CGE Analysis of the NEC Directive in Belgium," Regional and Urban Modeling 284100045, EcoMod.
  5. Mayeres, Inge & Proost, Stef & Dender, Kurt Van, 2005. "The Impacts of Marginal Social Cost Pricing," Research in Transportation Economics, Elsevier, vol. 14(1), pages 211-243, January.
  6. Rizwana Siddiqui, 2007. "Quantifying the Impact of Development of the Transport Sector in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 779-802.

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