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Über dieses Buch

This book is based upon contributions to a Scandinavian conference on Transport, Agriculture and the Environment in a Regional and National Development Per­ spective: Quantitative and Modelling Approaches, organised by AKF, the Institute of Local Government Studies, Denmark, which was held on the Danish island of Bornholm in December 1993. The chapters represent leading edge research in Scandinavia at the end of 1993 into modelling relationships between the economy and the environment, embracing both regional and sectoral perspectives. The publication of this volume will hopefully contribute to dissemination of knowledge about the very active Scandinavian research tradition in this field, a research tradition which is related to a long-standing engagement of Scandinavian countries with environmental issues. The contributors come from Denmark, Norway and Sweden and the collection is prefaced by two chapters from well-known Dutch researchers, traditionally re­ garded by Scandinavians as close neighbours to the Scandinavian modelling tradition. The support of S0M (Society, Economy and Environment), an open research centre financed by the Danish Environmental Research Programme, and of AKF in the organisation of the original conference and the preparation of this book is gratefully acknowledged. It was with great sadness that the editors learned of the death of one of the contri­ butors, Poul Erik Stryg, during the preparation of the book.



Introduction to Modelling the Environment and the Economy

1. Background and Introduction

Modelling the environment and the economy involves two way interactive relationships between environmental and economic systems. These relationships are the main themes of the present book.
Bjarne Madsen, Chris Jensen-Butler, Jørgen Birk Mortensen, Anne Marie Bruun Christensen

Survey of the State of the Art: Modelling the Environment and the Economy

2. Interaction between the Agricultural Economy and the Environment: An Overview of Dutch Problems, Policies and Models

In most industrialized countries environmental policy has become a major component of economic policy. Besides full employment, a reasonable level of income, a stable price level, a balanced balance of payments, a stable currency and a reasonable income distribution, environmental quality and the protection of nature have become generally accepted as goals of economic policy.1
Henk Folmer, Geert Thijssen

3. Transport Infrastructure, Productivity and Employment

Transport is one of the sources of environmental damage, both at the local level (noise, landscape deterioration), the national and continental level (air pollution) and the global level (greenhouse effect of C02 emissions). These negative externalities have received considerable interest during the last decades. Various taxation schemes (petrol taxes, car ownership taxes, parking tariffs) have been proposed and developed to correct for these externalities. At the same time efforts have been made to be sure that investment decisions in the transport sector are made in such a way that environmental issues receive the weight they deserve. This has led to the development of tools such as environmental impact assessment, and evaluation instruments such as social cost benefit analysis and multi-criteria analysis. In many countries the use of these tools is a required element in the preparation of large investment projects, including transport infrastructure investments.
Piet Rietveld

Effects on Economic Activity

4. A CGE Model for Denmark Applied to C02 Targets and GATT Liberalizations

The Secretariat of the Danish Economic Council has developed a CGE (Computable General Equilibrium) model of the Danish economy, GESMEC (General Equilibrium Simulation Model of the Economic Council), to calculate the long run costs for Denmark of various C02 reduction measures and Danish gains from international GATT liberalization scenarios. In most scenarios analysed it is an implicit assumption that changes in environmental and agricultural policies are gradually phased in so that the economy will have sufficient time to adapt fully1.
Søren E. Frandsen, Jan V. Hansen, Peter Trier

5. Costs and Benefits of Climate Policies: An Integrated Economy-Energy-Environment Model Approach for Norway

Proposals for environmental policies are often preceded by a cost-benefit assessment. Thus, after many years of environmental regulation there exists much information on economic costs and benefits associated with such measures. Unfortunately, this kind of information in Norway is scattered among many sources and is presented in a variety of formats, making it difficult to compare and aggregate data. Most of the available data originate from government institutions or government funded research. The data are used as a basis for decision-making, but are usually of a partial nature and data are used as a basis for decision-making, but are usually of a partial nature and do not lead to broader studies on the links between the environment and the economy.
Morten Aaserud

6. Regional Consequences of Environmental Taxes

Denmark was one of the first countries to introduce a carbon tax in 1993. The tax was fixed at DKK 100 (approx. $16) per ton C02 for households and DKK 50 (approx. $8) per ton C02 for industry. For industry, a variety of exemptions followed in order to relieve the burden on energy intensive enterprises, where the greater the share of energy expenses in turnover, the less carbon tax the enterprise is liable to pay. Very energy intensive enterprises can in fact get away with paying as little as DKK 10.000 (approx. $1600) in annual carbon tax.
Mette Gørtz

7. Regional Impacts of a Future Reduction of Agricultural Subsidies in Norway. An Input-Output Approach

This chapter is based on the results of a research project carried out by NIBR for the Central Research Office for Agricultural Associations (CRA) in Norway (Johansen and Onsager, 1993). The main purpose of the project was to establish regional multipliers for the impacts on non-agricultural sectors of reduced activities within agriculture at the county level in Norway. NIBR has, based on consultations with the CRA, calculated the impacts on employment in the agricultural sector of reducing transfers to the sector. The indirect impacts (on employment and production) in other production sectors are calculated using interregional input-output modelling techniques. Results for a given reduction in subsidies, translated into direct and indirect impacts on production and employment, are used for calculating regional multipliers. These multipliers are more general than the project-specific absolute impacts and can, to a certain extent, also be used when calculating the impacts of other levels of reduction.
Steinar Johansen

Effects on Emissions

8. A Model for Energy Consumption and Energyrelated Emissions from the Danish Production Sector - INDUS/EMIS

INDUS/EMIS is a forecasting model for energy consumption and energy-related emissions from the Danish production sector. It has been developed for the Danish Ministry of Energy, which uses the model in energy planning. INDUS/EMIS is a sub-model of the macroeconomic model ADAM that is used for economic planning in Denmark. As a sub-model INDUS/EMIS takes the economic forecasts given by ADAM and transforms these into forecasts for energy consumption, though these forecasts are not fed back into ADAM. The energy forecasts provided by INDUS are therefore only partly consistent with the economic forecasts, and the energy forecasts may differ from what is implicitly included in the economic forecasts. For complete consistency a link from the energy model to the economic model is needed, however, as a sub-model this link does not exist.
Frits Møller Andersen

9. Input-Output Analysis and Emissions of C02, SO2 and NOx - Linking Physical and Monetary Data

Problems of analyzing and describing the relationships between economic activity and the environment have been important topics in recent discussions about environmental matters. One approach, favoured by many economists, and, not surprisingly, by many politicians, is to evaluate the different aspects of the environment in monetary terms in order to make comparisons with other flows or stocks normally measured in such terms.
Ole Gravgård Pedersen

10. The C02 Tax and its Ability to Reduce C02 Emissions Related to Oil and Gas Production in Norway

The oil and gas production sector is one of the largest contributors to C02 emissions in Norway. The Norwegian government introduced a C02 tax in 1991, and the main motivation for the tax was to reduce emissions as a step towards the goal of achieving the 1989 level of C02 emissions in the year 2000 in Norway. Emissions of C02 from the sector are mainly related to two processes, gas flaring and production of energy for drilling, processing and pipeline transportation of gas to energy consumers in Europe.
Frode Rømo, Morten W. Lund

11. Regional Economic Consequences of Taxation on Commercial Fertilizers

This chapter describes the results of an analysis of the regional economic consequences of creation of a tax on commercial fertilizer in Denmark. The analysis has been undertaken as a joint research project between the Royal Veterinary and Agricultural University (KVL) and the Local Governments’ Research Institute (AKF), both in Copenhagen.
Thomas Jensen, Poul Erik Stryg

12. Set-aside - Economics and the Environment

The EU agricultural reform is a step towards creation of world market prices for food products and reduced surplus production within the EU. Farmers are compensated for their loss of income, for example by area support, and cereal production is reduced by set-asides.
Nils Groes, Kirsten Mohr

13. A National Forecasting Model System for the Evaluation of the Impacts of Alternative Policy Measures on Transport and the Environment

Norway’s contribution to global emissions of greenhouse gases is estimated to be around 0.2% (Report from the Norwegian Interministerial Climate Group, 1992). Emissions per capita in Norway are on average about the same as in Sweden and Western Europe but are two to three times greater than the world average. In 1988 emissions of greenhouse gases in Norway amounted to about 62.5 million metric tons of CO2-equivalents. CO2 emissions are responsible for 55% of total emissions. About 70% of the total emissions of greenhouse gases are due to the production and use of fossil fuels (State Pollution Control Authority, 1991).
Farideh Ramjerdi, Lars Rand

Integrated Approaches

14. Multicriteria Assessments of National Road Programs

In a world of regions trying to maximise their own welfare, conflicts will be a natural phenomenon. Maximising welfare involves a number of different goals to be fulfilled, but often these goals point in opposite directions. The objectives to be maximised may concern the distribution of resources among different groups of society, economic efficiency, environmental goals, or the level of production. The conflicts can arise between urban or other regions within a country, branches within an industry or between different sectors. A typical example would be the partly conflicting objectives of different sectors of the transportation system, both within and across regions. In this chapter the focus is on a set of different consequences or objective variables associated with traffic flows in a national road system.
Ulla M. Forslund, Gunnar Lindberg

15. Environmental Benefits from Export of Electricity from Non-fossil Sources in Scandinavia

Electricity generation from non-fossil sources covers 80-85% of the total electricity demand in the Nordic countries. Most of this is hydro power in Norway and Sweden, which is subject to substantial variations from year to year. Although traditional electricity planning has been based on an idea of national autarky, there has been a significant trade between the Nordic countries, mainly export of hydro and nuclear based electricity from Norway and Sweden to Finland and Denmark, and indirectly to Germany. Price differences and the development towards a more liberalized market lead to investment in more transmission capacity and a larger potential for export that will replace fossil fuels and thus emissions of S02, NOx, C02 and other pollutants.
Poul Erik Grohnheit

16. Reducing Nutrient Loadings of Marine Waters: A Cost Effectiveness Analysis

The environmental quality of marine waters of Denmark has been of major political concern since the middle of the 1980s; a general increase in the anthropogenic loadings of nutrients to the environment and the subsequent eutrophication of surface waters have in the last 3 decades degraded the quality of freshwater as well as marine water ecosystems. The 1987 action plan for the aquatic environment following several occurrences of widespread fish death in the Kattegat still does not provide the results intended by the plan regarding nitrogen: a 50% reduction of loadings in fiords and marine waters. In addition, the external conditions for Danish agricultural production are changing rapidly due to the reorientation of the European Agricultural Policy; thus Danish agriculture may undergo structural changes which will in effect alter the loadings of nutrients from agriculture. It is, therefore, of interest to evaluate the environmental impacts and the economic costs to society of different structural or technological changes within sectors and activities in society responsible for nutrient pollution of the marine environment.
Henrik Paaby, Jan Juhl Jensen, Peter Kristensen, Flemming Møller, Eli Skop

17. Modelling the Regional Economic Consequences of Environmental Policy Instruments Applied to the Transport Sector

There is a rapidly growing body of literature on the economics of environmental protection (see Turner et al. , 1994, for an overview) and considerable interest in the effects of economic instruments upon both the environment and economic activity is developing in both national and international organisations (OECD, 1991). In advanced countries the transport sector is one of the main contributors to environmental degradation, particularly atmospheric pollution. Pollution problems arising from transport are both global (C02 emissions) and regional and local, usually being concentrated in urban areas, and involving localised effects of such pollutants as ozone or S02.
Chris Jensen-Butler, Bjarne Madsen

Perspectives for Future Research

18. Conclusions and Perspectives

This book provides examples of the principal approaches to modelling interactions between the economy and the environment at present being developed in Scandinavia. In this chapter perspectives on the state of the art in this part of Europe are presented. The chapter also draws more general conclusions concerning
Bjarne Madsen, Chris Jensen-Butler, Jørgen Birk Mortensen, Anne Marie Bruun Christensen, Morten Aaserud


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