CERE Working Papers, CERE - the Center for Environmental and Resource Economics
Towards a dynamic Ecol-Econ CGE model with forest as biomass capital
Abstract: This study presents a Dynamic Computable General
Equilibrium model that combines economic and ecological aspects of forest
biomass. A framework is introduced for modeling the growth of a biomass
stock which interacts with economic sectors. Harvest of and demand for
forest products and forest amenities are determined endogenously in an
inter-temporally consistent way. The idea is based on a Markovian growth
model of the forest. The study demonstrates an approach for incorporating
non-market values of forests, such as carbon sequestration, recreation and
biodiversity, into a growth model. A simulation illustrates harvest
behaviour when the economy is subjected to shocks.
Keywords: Dynamic CGE; Markovian growth; Ecosystem modeling; Inter-temporal optimization; Infinite-horizon equilibria; (follow links to similar papers)
JEL-Codes: C68; D58; Q26; (follow links to similar papers)
24 pages, November 12, 2010
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