CGE modelling for environmental economics applications

Event Date: 27 October 2021

Speaker: Cristina Sarasa, Associate Professor at the Department of Economic Analysis University of Zaragoza 

Time: 4 pm

Please contact Rachel Hill (r.hill@strath.ac.uk) for Zoom details.

Abstract:

In recent decades, the need to strengthen efforts to reduce GHG emissions to combat Climate Change has become a major global concern, as reflected in the 2015 Paris Agreement and the EU Climate strategy (2016). In this context, countries are required to organize their contributions to environmental improvement through national strategies. MRIO and CGE studies have often been used in parallel to examine environmental issues, in the former case where the focus is the description of flows embodied in countries’ final demand with an analysis that offers a high level of industry and regional disaggregation, and in the latter where the main interest lies in the evaluation of possible policy outcomes as they provide a suitably flexible analytical framework for scenario analysis. Moreover, CGE models are advantageous because they model both supply- and demand-side behaviour, prices and quantities simultaneously and endogenously. A further methodological objective is combining the MRIO (with regional detail) and CGE approaches to leverage opportunities offered by both, where environmental and economic impacts at both the regional and national levels can be explored. This seminar will present the results of various works that combine these methodologies to evaluate environmental impacts. First, using a dynamic CGE model for Spain, the impacts of a gradual evolution of more efficient technologies on electricity consumption and the use of transport services are evaluated, both in terms of environmental (GHG and SOx) and economic effects. Second, different scenarios are studied on a water-related CGE model using a MRIO database for Spain, in order to evaluate the impact of alternative allocation scenarios for regional production on the country’s agriculture and agri-food industries.

If you would like to read the full paper, please click here and here.

Published: 6 October 2021