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Applied General Equilibrium in Environmental Decision-Making

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Sustainability and Environmental Decision Making

Part of the book series: Sustainable Development ((SD))

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Abstract

This chapter documents and reviews studies in environmental decision-making in the framework of the applied general equilibrium analysis. The applied general equilibrium has been widely used in the research of environmental decision-making, such as the evaluation of the welfare change and the corresponding cost incurred by the environmental regulations, or the assessment of the emissions trading schemes adopted within a region that contains multiple countries and multiple sectors. The applied general equilibrium analysis has been extended to international trade to explore how to set a border tax on imported goods or to provide subsidies on exported goods in an environmental regulation setting. Linking the applied general equilibrium methodologies to the popular research topics in environmental decision-making and the corresponding regulation tools together, this chapter presents a critical review of the literature in the areas of applied general equilibrium and environmental decision-making for the past ten years. Out of 243 studies screened from keywords search, 104 studies were selected for review. Neither empirical studies nor studies with a theoretical game framework were selected for review. This chapter presents a review of studies in terms of the employed methodologies by three dimensions – the functional type, the time horizon, and the model randomness. It also presents discussions of studies by research topics and environmental policy instruments that were chosen and analyzed. It concludes with suggesting potential research areas in the future.

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Authors and Affiliations

  1. School of Economics and Management, Beijing University of Technology, Beijing, China

    Di Yin

  2. School of Business, Singapore University of Social Sciences, Singapore, Singapore

    Youngho Chang

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  1. Di Yin
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Correspondence to Youngho Chang .

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Editors and Affiliations

  1. Nanyang Technological University, Singapore, Singapore

    Euston Quah

  2. ETH Zurich (Eidgenössische Technische Hochschule Zürich), Zürich, Switzerland

    Renate Schubert

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Yin, D., Chang, Y. (2021). Applied General Equilibrium in Environmental Decision-Making. In: Quah, E., Schubert, R. (eds) Sustainability and Environmental Decision Making. Sustainable Development . Springer, Singapore. https://doi.org/10.1007/978-981-15-9287-4_2

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