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12 - Environmental policy modeling
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- By Carlo Perroni, University of Western Ontario London, Randall Wigle, Wilfrid Laurier University
- Edited by Thomas W. Hertel, Purdue University, Indiana
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- Book:
- Global Trade Analysis
- Published online:
- 05 June 2012
- Print publication:
- 28 December 1996, pp 305-320
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- Chapter
- Export citation
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Summary
Introduction and overview
One of the goals of the Global Trade Analysis Project (GTAP) is to make a versatile, well-documented “consensus” model broadly available. The advantage of such a tool is that it can help focus discussion on the economics of the analysis, rather than the mechanics of model formulation and solution. Although this model is reasonably versatile, no numerical model can be truly all-purpose, and GTAP is no exception. Of particular relevance to this chapter are environmental externalities and abatement costs, which GTAP does not currently incorporate. The goal of the exercises we present in this chapter is to illustrate how GTAP can be used to analyze issues that are not directly accommodated by the model. This work is meant to be illustrative rather than definitive; in other words, we are not arguing that the model we use is the best model; rather, we wish to illustrate how simple adaptations to an existing model structure can permit better insight into environmental policy issues.
This work is also motivated in part by studies cited in the popular press containing statements such as:
Carbon taxes would cost the US economy 4% of gross national product (GNP).
Environmental regulation would lead to reduced imports because they distort the economy.
Often, the bases of such statements are simulation models, most of which have one or both of the following characteristics:
There is no treatment of environmental feedbacks to the economy (particularly benefits of cleanup).
There is no abatement technology.
3 - Overview of the GTAP data base
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- By Mark Gehlhar, Washington, DC USA, Denice Gray, Washington, DC USA, Thomas W. Hertel, Purdue University, Karen M. Huff, Purdue University, Elena Ianchovichina, Purdue University, Bradley J. McDonald, Geneva Switzerland, Robert McDougall, West Lafayette, IN USA, Marinos E. Tsigas, Washington, DC USA, Randall Wigle, Wilfrid Laurier University
- Edited by Thomas W. Hertel, Purdue University, Indiana
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- Book:
- Global Trade Analysis
- Published online:
- 05 June 2012
- Print publication:
- 28 December 1996, pp 74-123
-
- Chapter
- Export citation
-
Summary
I Introduction and overview
The centerpiece of the Global Trade Analysis Project (GTAP) data base consists of bilateral trade, transport, and protection matrices that link 24 country/regional economic data bases. (See Table 3.1 for a complete list of regions and sectors in version 2 of the GTAP data base.) The regional data bases are derived from individual country input–output tables. The purpose of this chapter is to document the sources and procedures used in constructing the disaggregated 37-sector, 24-region data base that forms the basis for subsequent applications.
The next section discusses processing of the international bilateral merchandise trade data, which are published by the Statistical Office of the United Nations. These data are ideal for our purposes, but their reliability is questionable [see, for example, DeWulf (1981); Hiemstra and Mackie (1986); and Tsigas, Hertel, and Binkley (1992)]. Therefore, we discuss a statistical procedure for reconciling discrepant trade statistics and producing balanced bilateral trade and transport matrices for 1992. These bilateralized flows are also used to determine the pattern of trade in nonfactor services.
The third section discusses the support and protection data developed for GTAP. These are expressed in the form of ad valorem equivalent, tariff, and nontariff barriers, and they draw heavily on information submitted to the General Agreement on Tariffs and Trade (GATT) in connection with the Uruguay Round negotiations.