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Assessing economic impacts of China’s water pollution mitigation measures through a dynamic computable general equilibrium analysis

In this letter, we apply an extended environmental dynamic computable general equilibrium model to assess the economic consequences of implementing a total emission control policy. On the basis of emission levels in 2007, we simulate different emission reduction scenarios, ranging from 20 to 50% emi...

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Bibliographic Details
Published in:Environmental research letters 2011-10, Vol.6 (4), p.44026
Main Authors: Qin, Changbo, Bressers, Hans T A, Su, Z (Bob), Jia, Yangwen, Wang, Hao
Format: Article
Language:English
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Summary:In this letter, we apply an extended environmental dynamic computable general equilibrium model to assess the economic consequences of implementing a total emission control policy. On the basis of emission levels in 2007, we simulate different emission reduction scenarios, ranging from 20 to 50% emission reduction, up to the year 2020. The results indicate that a modest total emission reduction target in 2020 can be achieved at low macroeconomic cost. As the stringency of policy targets increases, the macroeconomic cost will increase at a rate faster than linear. Implementation of a tradable emission permit system can counterbalance the economic costs affecting the gross domestic product and welfare. We also find that a stringent environmental policy can lead to an important shift in production, consumption and trade patterns from dirty sectors to relatively clean sectors.
ISSN:1748-9326
1748-9326
DOI:10.1088/1748-9326/6/4/044026