A Conceptual Framework for Integrated Economic–Environmental Modeling
Abstract
Economy-wide models such as computable general equilibrium (CGE) models are powerful tools that provide insights on policy impacts on standard economic indicators. With the recent publication of the System of Environmental-Economic Accounting (SEEA), the power of this approach is amplified. This article addresses an important gap in economy-wide policy modeling applications and literature by developing a conceptual framework for the integration of the SEEA in the CGE framework, enabling for the first time the analysis of policy impacts on the economy and the environment in a quantitative, comprehensive, and consistent framework. Previous integrated modeling efforts have generally focused on the interaction between the economy and one environmental resource in isolation, requiring significant data reconciliation. Integration of SEEA into a CGE circumvents this resource intense process, enhancing analytical power, obviating the need for strong assumptions in reconciling economic–environmental data, reducing start-up costs, and increasing the timeliness of evidence-based policy advice.
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Biographies
Onil Banerjee is a Natural Resource Economist with the Inter-American Development Bank (IDB). Onil is engaged in projects throughout the Latin American and Caribbean region with an emphasis on integrated economic–environmental modeling and impact analysis. Onil’s background is truly multidisciplinary and is demonstrated through the diversity of international development issues he has tackled including those related forest and environmental policy, climate change, food security, and tourism. Prior to joining the IDB, Onil was International Development Economist with the Commonwealth Scientific and Industrial Research Organization, Australia's National Science Agency.
Martin Cicowiez earned his PhD in Economics from Universidad Nacional de La Plata (UNLP). Martin is deputy director at the Center for Distributive, Labor, and Social Studies, based at UNLP in Argentina, and professor of International Economics and Computational Economics at UNLP. He has worked as a consultant for international organizations such as the World Bank, IADB, and the United Nations. Martin also teaches courses on the use of computational methods to assess public policy options in various countries.
Mark Horridge is a research professor at Victoria University's Centre of Policy Studies (CoPS). From 2007 to 2013, Mark held a similar position at CoPS, Monash University. He holds a PhD in economics from the University of Melbourne. Mark leads the small team behind GEMPACK software, the CGE modeling system developed at CoPS over many years by Ken Pearson and others. Mark has published 26 refereed journal articles and 12 book chapters.
Renato Vargas studied economics at the University of Groningen in the Netherlands. He has a decade's worth of experience in the implementation of the System of Environmental and Economic Accounts and its analysis for policy in Guatemala. He consults on environmental economic topics with the World Bank's WAVES program and other partner initiatives in Latin America. Renato is an associate researcher at the Institute of Agriculture, Natural Resources, and Environment of Rafael Landívar University of Guatemala.
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Article first published online: July 19, 2016
Issue published: September 2016
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