Forestry Trade and Population Growth in the Philippines in a General Equilibrium Framework
The Philippines has experienced deforestation all throughout the last century. Some scholars attribute it to excessive timber trade others to population growth. The population argument, which is in the centre of most environment-related issue, is valid from 1980s onwards in the case of the Philippines. Population was not an issue in the first half of the 20th century neither in the years before that, however, timber trade was. The Philippines became the single biggest exporter of logs in 1969, while population stood at around 36.7 million. The paper attempts to show using a computable general equilibrium (CGE) framework the relative contribution of population growth and foreign trade policies on deforestation in the case of the Philippines. A static CGE model based on ORANI with an appended sub-forestry model is employed in the analysis. The results show that (domestic) population per se would not significantly increase deforestation. Whilst, export taxes are ineffective tools in reducing deforestation, trade liberalisation policies are beneficial to the economy as a whole.
The Environmental and Employment Effect of Australian Carbon Tax
The paper employs a computable general equilibrium (CGE) model with an environmentally-extended Social Accounting Matrix (SAM) to simulate the effects of a carbon tax of $23 per tonne of carbon dioxide on different economic agents, with and without a compensation policy. According to the simulation results, the carbon tax can cut emissions effectively, but will cause a mild economic contraction. The proposed compensation plan has little impact on emission cuts while significantly mitigating the negative effect of a carbon tax on the economy. The effect on various employment occupations is mildly negative, ranging from -0.6% to -1.7%, with production and transport workers worst affected.
An Empirical Analysis of the Proposed Australia-Japan Free Trade Agreement
The success of the proposed Australia-Japan Free Trade Agreement will depend, to a considerable degree, on the manner in which it deals with the problem of agricultural trade between the two countries. This paper seeks to provide a quantitative assessment of the potential impact of an Agreement between Australia and Japan by simulating two scenarios (full trade liberalisation and trade liberalisation excluding agricultural trade) and using the Global Trade Analysis Project model to estimate the effects. The results indicate the possible welfare gains under the two envisaged trade regimes.
The Contribution of Carbon Pricing to Sustainable Mining
Reductions in greenhouse gas emissions are essential to reducing the rate and scale of anthropogenic climate change to levels that can sustain the planet's biosphere. A carbon tax is a policy measure that is designed to reduce greenhouse gas emissions by increasing the prices of the highest carbon polluting goods and services in an economy, thus encouraging substitution towards resultant relatively cheaper and less-polluting goods where possible. When Australia introduced such a tax in 2012, there was a fear that it could threaten the resources boom, considered the engine of Australian economic growth in recent years. By employing a computable general equilibrium model and an environmentally-extended Social Accounting Matrix, this paper demonstrates the effects of a carbon tax on the resources sector. The modelled results show that, in a flexible exchange rate regime, all resources within the sector will be affected negatively but to different degrees. The brown coal sector will be the hardest hit, with a 25.74 per cent decrease in output, 52.94 per cent decrease in employment and 89.37 per cent decrease in profitability. However, other resources in the sector would be only mildly affected. From the point of view of sustainability, the most significant results are that, under the carbon tax, the resources sector contributes considerably to the carbon emission reduction target of Australia. Given that brown coal accounts for only a small portion of the resources sector, it is reasonable to suggest that a carbon tax would not significantly affect the overall performance of the sector.
Household Distributional and Revenue Recycling Effects of the Carbon Price in Australia
The Australian Government introduced a carbon tax from 1 July 2012. The then opposition party leader, now Prime Minister, introduced legislation to repeal the tax. Amongst the many issues being debated is that of the incidence of the tax. In this study, we explore household consumption and income changes arising from a A$23 carbon price employing a computable general equilibrium model (entitled A3E-G). The model has been calibrated using a social accounting matrix database of Australia with 10 household income groups. This carbon price generates A$6.39 billion revenue while reducing Australia's carbon emissions by 11%. The empirical evidence suggests household level impacts range from proportional to mildly progressive tax incidence. In this study, we propose four revenue recycling options to overcome any undesirable distributional effects from the carbon price. Results indicate that revenue recycling through income tax reductions and uniform lump sum transfers improves post tax income levels and welfare towards middle and high income groups. A nonuniform lump sum transferring option favors low income households. Uniform reductions in commodity tax rates are not found to be welfare improving but we find positive impacts on export competitiveness from this option.
Environmental and economic impacts of a joint emissions trading scheme
This paper examines the environmental and economic effects of six (European Union, Switzerland, Norway, New Zealand, South Korea and Kazakhstan) domestic national Emissions Trading Schemes (ETSs). We have extended the analysis to an international ETS among these schemes since their governments have shown an ambition to obtain a linked market and have been carrying out negotiations for many years towards that goal. We incorporated non-CO2 emissions into the GTAP-E model database and extended the model to estimate the impact of domestic ETSs and an international ETS. Our analysis provides detailed projections regarding emissions permits allocation and emissions fluctuations. The results indicate that emissions trading volumes are very small in both domestic and international ETS scenarios since Norway, Switzerland, New Zealand and Kazakhstan economies are very small compared with the European Union and South Korea. In addition, the results in the international ETS scenario do not differ greatly from domestic trading scenario. However, results indicate that emissions abatement takes place with the lowest cost through an international ETS setting.
Potential impacts of the Emissions Reduction Fund on the Australian economy
This paper examines the impacts of theEmissions Reduction Fund on the Australian economy. The GTAP-E model has been extended to allocate the subsidy directly to each eligible sector. The simulation of the subsidy policy has been supplemented by introducing an improvement of energy efficiency to non-agricultural sectors and of resource efficiency by using endowment factors in the agricultural sector. Results indicate that,with the current budget of A$2.55 billion, or US$1.86 billion (Scenario 1), Australia can only achieve theminimumcumulative emissions reduction target of 225 MtCO₂-e during 2015-20. Australia needs a budget of US$2.08 billion (Scenario 2) to achieve the maximumcumulative emissions reduction target of 279 MtCO₂-e. In both scenarios, the agricultural sector receives the highest payment from the Australian Federal Government under the subsidy programme, followed by the electricity generation sector. Under the scheme, Australia experiences only a mild contraction in the economy, with a reduction of real GDP by 0.37% and 0.55% in the two scenarios, respectively.
Analyzing the Causes of Deforestation in a CGE Framework: The Case of the Philippines
A computable general equilibrium (CGE) model is developed to evaluate some of the causes of deforestation in the Philippines. To quantify deforestation effects, the elasticities of various parameters of deforestation as identified in the literature are evaluated. The main conclusion derived is that the factors that have a relatively more direct influence on the level of harvest such as annual allowable cut would have a greater effect on deforestation rate than population growth and off-farm employment opportunities.
Construction of a Social Accounting Matrix (SAM) for Carbon Tax Modelling in Australia
The objective of this study is to describe the construction of a Social Accounting Matrix (SAM) for Australia. This environmentally focused SAM appears to be one of the first for Australia. A SAM differs from an input-output table database in that it includes the important inter-industry matrix of the input-output table, but also adds details on the institutions in the economy. The institutions presented in this SAM are households, government, corporations and rest of the world (ROW). The particular policy change for which this SAM is designed is the imposition of a carbon tax. The production sectors of the economy are disaggregated into 35 sectors to be compatible with the estimates of carbon emissions in Australia. The SAM being described in this study further disaggregates the household sector into ten deciles in order to provide scope to analyse the distributive and redistributive aspects of a policy change. Furthermore, labour is disaggregated into nine employment groups which facilitate an in depth analysis of the impact of the tax on the different employment. The SAM developed here is being used in an environmentally extended CGE model to analyse macroeconomic and sectoral impacts of a carbon tax in Australia.
Effects of the Proposed Australian Carbon tax: A CGE Assessment
The Australian government has announced to price carbon at an initial price of $23 per tonne. Despite detailed modelling undertaken by the Commonwealth Treasury, there is widespread speculation about the possible economic impact of a carbon tax in Australia. In this paper we build a computable general equilibrium (CGE) model incorporating many new features to deal with the issue of emissions and model the impact of carbon taxes. The analysis undertaken by simulating the impact of a carbon tax of $23 a tonne reveals some interesting outcomes. For example, in the short run, Australia's real GDP may decline by 0.68 percent, consumer prices may rise by 0.75 percent, and the price of electricity may increase by about 26 percent as a result of the tax. Nevertheless it allows Australia to make a substantial cut in its CO₂ emissions. The simulation results imply an emission reduction of about 12 percent in its first year of operation. The tax burden is unequally distributed among different household groups with low-income households carrying a relatively higher burden.