경제-환경 연관 분석을 위한 Proto-type dynamic CGE 모델 개발

Abstract

This study addresses on interactions of economy and environment in a perfect foresight dynamic computable (or applied) general equilibrium (CGE) with a focus on greenhouse gas (GHG) mitigation strategy in Korea. The primary goal of this study is to evaluate greenhouse gas mitigation portfolios of changes in timing and magnitude with a particular focus on developing a methodology to integrate the bottom-up information on technical measures to reduce pollution (the characteristics of the abatement techniques) into a top-down multi-sectoral computable general equilibrium framework. To this end, a dynamic computable general equilibrium model is constructed including pollution and abatement as a proto-type of the model. Empirical analysis based on the model developed here will be followed in a consequent project during 2001. The dynamic setting is essential, as most of the major interactions between the economy and the environment are essentially dynamic in nature and capital formation is a typically dynamic phenomenon. Climate change issue is a good example needed to dealt with in dynamic way in that the policy perspectives are in nature to cover long-term, usually at least more couple of decades, adaptation and impact forecasting. Optimisation or simulation is two broad approaches taken for the dynamic analysis on economic interest in general and climate change issue in particular. This study takes simulation approach : It compares consequences of GHG reduction schemes. Standard CGE models do not pay explicit attention to the characteristics of the technologies involved, but use smooth, continuous production and utility functions. This is a common critique by mostly technically oriented scientists on these top-down economic models. On the other hand, most models that do take into account the technical aspects of changing economic structures do not model the indirect economic effects of these technologies (i.e. they adopt a partial framework). The large number of technological options available for pollution reduction precludes the use of discrete technology modelling in broad empirical environmental-economic analysis. Therefore, in this article a new methodology is introduced in which the advantages of the top-down approach are combined with the main information of the bottom-up approach. This study concentrates on the economic consequences of pollution and abatement, while environmental stocks and damages by poor environmental quality on the economic system or on welfare are not taken into account in this proto-type model, remains further works. The environmental sub-model is purely represented by the pollution levels and abatement activities. In policy terms to secure certain level of emission, the model cannot be used for Pigouvian analyses (see Pigou, 1920), where the optimal tax rate is determined by the trade-off between abatement costs and damage costs, but rather for Baumollian exercises where the cost-effective way to reach a predetermined policy target is analysed (see Baumol, 1977). The organization of the paper is as follows. In Chapter II, different approaches to a dynamic specification of the CGE model are presented and compared. Chapter III describes the model structure. Then, the main results of policy scenarios are illustrated in Chapter IV followed by conclusion in Chapter V.