• Environmental and Resource Economics Review
• /
• v.23 no.4
• /
• pp.689-718
• /
• 2014

This study analyzes the ripple effects on the national economy of the flood damage using a perfect foresight dynamic CGE model for 2010 as the base year in case that the flood damage reduces the capital of the relevant industrial sectors. The analysis is limited to the items of physical damage such as agricultural land, ships and public facilities, for which statistical data can be obtained. As flood damage scenarios we adopt the minimum, maximum and average value of flood damage's historical data over the period 1991~2010 for each item. The results show that the largest production decline happens to the industry of fishing and transport and the next largest to the agricultural and forestry industry. The GDP reduction in the base year turns out to be from 0.001 to 0.057 percent compared to the benchmark and 11 percent compared to the exogenous shock to capital stock. Dynamically, the GDP gradually decreases until the year of 2030, which shows the long-lasting impact on the national economy of flood damage via the chanel of the capital damage.

• International Area Studies Review
• /
• v.14 no.3
• /
• pp.423-453
• /
• 2010

This study aims at quantifying potential economic effects on the Korean economy of a China-Korea FTA and a Japan-Korea FTA using a dynamic computable general equilibrium (CGE) model. Most of the previous studies on them used static CGE models. Key findings of this study are that a China-Korea FTA would lead to a higher increase in Korea's exports and economic growth than a Japan-Korea FTA and that both a China-Korea FTA and a Japan-Korea FTA would cause additional trade deficits to Korea, which would be minuscule compared to Korea' economic trade volume. Since potential economic impacts on Korea's industry output and exports by sector of a China-Korea FTA and a Japan-Korea FTA are forecast to be complementary, i.e., major sectors which would run trade deficits from a Japan-Korea FTA would run trade surpluses from a China-Korea FTA, a simultaneous pursuit of both a China-Korea FTA and a Japan-Korea FTA would be more desirable and beneficial to Korea. This study shows that a dynamic CGE model which can take explicit account of international capital mobility and ownership is required for more precise estimation of effects of the FTAs.

• International Area Studies Review
• /
• v.13 no.3
• /
• pp.695-728
• /
• 2009

This study aims to conduct a quantitative assessment of potential economic impacts on the Korean economy of the concessions of the Korea-U.S. FTA (KORUS FTA) which was signed on April 1, 2007 using a dynamic computable general equilibrium (CGE) model, with all sectors, including agriculture, manufacturing sectors and services industry, considered for simulations. In addition, the timing of trade liberalization based on the concessions agreed on in the KORUS FTA talks for all sectors is explicitly considered. Major findings of this study are that Korea' real GDP would rise by 4.67%~4.99% by 2023 and the contribution of liberalization of services trade to Korea's economic growth would be 0.3%~0.62% points. Trade liberalization in service sectors would lead to lowered import prices and an increase in FDI, which are to contribute to an higher output and exports of sectors which make an intensive use of imported inputs and finally a higher economic growth of the Korean economy as a whole. For that to happen, a ratification of the KORUS FTA by the National Assembly of Korea and the U.S. Congress is required.

• Environmental and Resource Economics Review
• /
• v.21 no.4
• /
• pp.947-980
• /
• 2012

This study analyzes the long-run impacts of climate change on Korean agriculture and economy. We estimate the impacts of climate change on the productivities of major agricultural products including rice, dairy and livestock using both a simulation approach and a semiparametric econometric model. The former predicts a decline in productivity while the latter predicts an increase in productivity due to climate change, especially for rice. A recursive dynamic CGE model is used to analyze the general equilibrium impacts of productivity change under the two different scenarios, derived from the two productivity analysis approaches. The loss of GDP in 2050 is 0.2% or 0.02% of total GDP depending on the scenario. It is shown that the losses in dairy and livestock sectors are larger than that in rice sector, although the losses in those two non-rice sectors have been ignored by most existing works.

• Environmental and Resource Economics Review
• /
• v.16 no.2
• /
• pp.275-311
• /
• 2007

Hydrogen energy is emphasized as a substitutable energy of carbon-based energy system in the future, since it is non-depletable and clean energy. Long term vision of Korean government on the national energy system is to promote hydrogen energy by 15% of final energy demand until 2040. This study analyzes economic impacts of hydrogen energy development employing a dynamic CGE model for Korea. Frontier technology such as hydrogen energy is featured as slow diffusion at the initial stage due to the learning effect and energy complementarity. Without government intervention, hydrogen energy would be produced upto 6.5% of final energy demand until 2040. However, if government subsidizes sales price of hydrogen energy by 10%, 20%, and 30%, share of hydrogen energy would increase 9.2%, 15.2%, and 37.7% of final energy demand. This result shows that the slow diffusion problem of hydrogen energy as frontier technology could be figured out by market incentive policy. On the other hand, production levels of transportation sector would increase while growth rate of oil and electricity sectors would decline. Household consumption would be affected negatively since increase of consumption due to the price decrease would be overwhelmed by income reduction owing to the increase of tax. Overall, GDP would not decrease or increase significantly since total production, investment, and export would increase even if household consumption declines.

• Environmental and Resource Economics Review
• /
• v.30 no.2
• /
• pp.269-297
• /
• 2021

Bioplastics are attracting attention as a substitute for conventional petroleum-based plastics because they are carbon neutral and can be biodegradable. This study estimated economic and environmental impact of regulating the petroleum-based plastics industry and fostering the bioplastics industry using a Recursive Dynamic CGE Model of the Korean Economy. Results show that the regulation of the conventional plastics industry exhibits a positive environmental impact by reducing greenhouse gases and plastic waste and a negative economic impact with a decrease in GDP. Meanwhile, fostering the bioplastics industry with regulation on conventional plastics industry has similar levels of greenhouse gas and waste reduction effects when there is only regulation on the conventional plastics industry. It is also shown that expanding the production of bioplastics industry offsets existing economic losses as a form of increased GDP. If petroleum-based plastics are replaced through the expansion of bioplastics production, it can contribute to the decoupling of greenhouse gas emissions and plastic waste from economic growth.

• Environmental and Resource Economics Review
• /
• v.20 no.2
• /
• pp.199-228
• /
• 2011

In this study, the effect on the economy-energy-environment gap among regions of reducing GHGs is analyzed under various scenarios, using a multiregional dynamic CGE model. Regions in Korea are classified as six metropolitan areas. Scenarios are set in three cases such as self-regulatory measures, carbon tax and emissions trading scheme. The reduction target under each scenario is again classified according to volume basis and intensity basis. In results, self-regulation is shown to deepen the economic divide mostly, followed by a carbon tax, emissions trading scheme in order. This result could be interpreted such that a system based on market incentives gives less effect on the gap among regions. However, market incentives based system is expected to take time to build. Thus in implementing policies to increase short-term effects of the reduction targets, complementary policies are needed to reduce the regional devide.

• Environmental and Resource Economics Review
• /
• v.18 no.4
• /
• pp.587-635
• /
• 2009

The purpose of this study is to develop the Global Dynamic Computable General Equilibrium Model (Global CGE Model) in order to produce an economic impact analysis, including prospective obligations for the Post-2012 regime. This model explores the impact of an international emissions trading market and macroeconomic variables such as GNP, consumption, investment, imports and exports, in accordance with potential increased obligations on the Republic of Korea. Distinguishing it from existing studies, this Global CGE Model divides the global community into major economic groups, and in the capacity of the analyzed global model, reflecting the principle nations' macroeconomic indicators through the theoretical approach of endogenous growth theory. Policies such as an emissions trading scheme and carbon tax are reflected in the model. Also, in particular, the model reflects exogenous technological advances. According to this analysis, the stronger the greenhouse gas reductions, the greater the adverse effects on the economy; among macroeconomic indicators that appear, a significant decline is realized in the balance of trade, along with a significant decrease in investment and consumption. Energy dependence, in particular, plays a large role-varying in degree by industry type-, as greenhouse gas reductions would have a greater impact on energy-intensive industries. Furthermore, if Korea, currently recognized as a developing country, is given the obligation to reduce greenhouse gas emissions, competing countries such as China and other developing countries will be given an advantage.

• The Southeast Asian review
• /
• v.24 no.2
• /
• pp.1-33
• /
• 2014

아세안은 한중일과의 무역을 통한 경제적 연계의 심화현상과 최근 글로벌 위기로 인한 경기침체를 고려하여 새로운 경제성장추진을 위해 동북아의 한중일 삼국과의 무역자유화를 적극 추진하고 있다. 이미 ASEAN-중국, ASEAN-일본, ASEAN-한국 양자간 자유무역협정(FTA)이 발효되어 실행되고 있으며, 이들 3개 양자협정을 아우르는 A+3FTA(ASEAN+중국+일본+한국) 논의도 진행중이다. 이에 본 연구는 이들 4개 자유무역협정의 경제적 효과를 분석하여 과연 A+3FTA가 아세안은 물론 동아시아 역내에서 보다 바람직한 통상정책인지를 평가한다. 본 논문의 정성적 평가는 기존의 경제통합의 경제적 효과를 결정하는 이론에 근거하여 참여국의 제반 경제적 현황(경제규모, 소득수준, 경제개발수준, 거래비용, 무역 및 산업구조, 관세율 등)을 통계적으로 비교 분석한다. 한편 정량적 평가는 무역의 경제적 파급효과 분석에 널리 이용되고 있는 연산가능한 일반균형모형(CGE)분석방법을 적용한다. 정태적 효과의 분석을 위해서 GTAP 모형을 이용하며, 이와 더불어 동태적으로 투자를 통한 자본축적을 반영하는 자본축적 CGE 모형분석을 병행한다. 분석결과 후생 및 생산확대 측면에서 아세안의 경우 일본과의 양자간 FTA가 한국이나 중국과의 FTA에 비해 보다 긍정적인 후생증진을 가져올 것으로 기대되며, 아세안과 한중일 모두에게 A+3FTA가 동아시아 역내에서 보다 바람직한 자유무역협정이 될 것으로 평가된다.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.17 no.8
• /
• pp.502-507
• /
• 2016

The transition from a carbon economy based on fossil fuels to a hydrogen economy is necessary to ensure energy security and to combat climate change. In order to pursue the transition to a hydrogen economy while achieving sustainable economic growth, a preliminary study into the establishment of the necessary infrastructure for the future hydrogen economy needs to be carried out. This study addresses the economic and environmental interactions in a dynamic computable general equilibrium (CGE) model focusing on the economic effects of the introduction of renewable energy into the Korean energy system. Firstly, the introduction of hydrogen results in an increase in the investment in hydrogen production and the reduction of the production cost, ultimately leading to GDP growth. Secondly, the mandatory introduction of renewable energy and associated government subsidies bring about a reduction in total demand. Additionally, the mandatory introduction of hydrogen energy into the power sector helps to reduce CO2 emissions through the transition from a carbon economy-based on fossil energy to a hydrogen economy. This means that hydrogen energy needs to come from non-fossil fuel sources in order for greenhouse gases to be effectively reduced. Therefore, it seems necessary for policy support to be strengthened substantially and for additional studies to be conducted into the production of hydrogen energy from renewable sources.