Incorporating Sustainability Indicators into a Computable General Equilibrium Model of the Scottish Economy

Ferguson, Linda and McGregor, Peter G and Swales, J Kim and Turner, Karen R and Yin, Ya Ping (2004) Incorporating Sustainability Indicators into a Computable General Equilibrium Model of the Scottish Economy. Discussion paper. University of Strathclyde, Glasgow.

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    Abstract

    In recent years, the notion of sustainable development has begun to figure prominently in the regional, as well as the national, policy concerns of many industrialised countries. Indicators have typically been used to monitor changes in economic, environmental and social variables to show whether economic development is on a sustainable path. In this paper we endogenise individual and composite environmental indicators within an appropriately specified computable general equilibrium modelling framework for Scotland. In principle, at least, this represents a very powerful modelling tool that can inform the policy making process by identifying the impact of any exogenous policy change on the key endogenous environmental and economic indicators. It can also identify the effects of any binding environmental targets on economic activity.