• Environmental and Resource Economics Review
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• v.19 no.1
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• pp.45-80
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• 2010

A computable general equilibrium model has been used to analyze the likelihood of double-dividend effect in Korean economy. Revenue neutral introduction of carbon tax through the reduction in payroll tax and corporate income tax had been experimented in this regard. Double-dividend measured by income shows the existence of weak double-dividend in both cases, while double-dividend measured by consumption level could not be found in case of carbon tax with corporate income tax reduction. A notable result is in the employment measured double-dividend effect as the sizable strong double-dividend effect were found in the case of carbon tax with payroll tax reduction.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.155-163
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• 2021

The study aims to investigate the effect on Philippine occupational choice of House Bill No.7787, also known as the National Wage Law, which was filled by the Philippine Congress that mandates the implementation of an across the board minimum daily wage of Php750.00 to all workers in the Philippines. This study had used the Computable General Equilibrium-Top-Down Behavioral Microsimulation approach to determine the effect of National Wage Law on occupational choice. The results of the study revealed that the implementation of said National Wage Law would affect the distribution of labor force across occupational classification such as wage workers, entrepreneurial farming activities workers, and entrepreneurial non-farming activities workers. This has resulted from a higher utility that will be derived from the wage working sector once the National Wage Law will be implemented. Further, among regions in the Philippines, the Calabarzon, National Capital Region, and Central Luzon had recorded the highest number of workers who prefer the wage income sector. The findings of the study also suggest that the Philippine agricultural sector will be greatly affected by the National Wage Law due to the preference of workers to shift from the entrepreneurial farming sector to belong to the wage sector.

• Korea Trade Review
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• v.47 no.1
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• pp.115-130
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• 2022

In this study, I focus on analyzing how the effects of implementing ETS are different depending on whether Korean ETS linking with carbon markets in other countries. The global computable general equilibrium (CGE) model built in this study analyzes the chages in the production and trade of industrial sectors according to the international linkage of ETS compared to the reference scenario of emissions reduction targets and implementation of ETS. From the analysis of internatioanl linkage of carbon markets scenarios, Annex B countries-South Korea carbon market linkage with individual ETS in China worse the economic outcomes in South Korea the most. This means South Korea lose the international competitiveness compared to China in this scenario. On the other hand, Annex B-China carbon market linkage with Korean individual ETS implementation reduce the decreases in production and trading. The most effective way is to join a global emissions trading market with China. The results are consistent in most industries of South Korea. These results are caused by that the supply of emission allowance is increased and the price of emissions allowances is dropped by China's participation to the carbon market, which can be understood to reduce the carbon reduction cost for industrial sectors. In addition, it can be also concluded that the determinant of the negative impact of ETS on changes in production and trade is more sensitive to the price of emissions allowances than to the characteristics of production and trade structure.

• Environmental and Resource Economics Review
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• v.22 no.4
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• pp.691-726
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• 2013

We develop a hybrid model which allows the change in electricity generation mix by adding the electricity-sector components of bottom-up model to the conventional CGE model. The electricity sector is represented as a sum of separate generation technologies, each of which has the form of DRTS (Decreasing Returns to Scale) production function, unlike the conventional CGE model. We compare the effects of the 30% emission reduction target using the hybrid model with those using the conventional CGE model. The cost of meeting the target is lower with the hybrid model than the conventional CGE. It is consistent with previous studies in that adding the bottom-up components to the top-down model reduces the cost of emission reduction. In an extra analysis we find that an additional regulation like RPS (Renewable Portfolio Standard) increases the cost.

• Environmental and Resource Economics Review
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• v.15 no.1
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• pp.95-133
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• 2006

This research first reviewed and analysed the current domestic situation of the voluntary agreement implementation and then it developed the policy implementation scenarios which will be applied to the model, KORTEM_ V.2. The model, consisted with 83 industries and commodities, examined the economic and environmental impacts of this policy instrument. Depending on the efforts of participating sectors and agents for fuel substitution and energy efficiency improvement, it has been evaluated that the voluntary agreement could be the "no-regret" policy. In other words, if the participating sectors and agents can achieve the voluntary energy conservation and emission reduction target without the negative impact on output level, the reduction of national emission will be achieved by creating the economic benefit, simultaneously. Therefore, for the successful implementation of voluntary agreement, this study emphasized the importance of expansion and strengthening of the current financial and institutional support for participating sectors and agents.

• Journal of Korea Trade
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• v.25 no.3
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• pp.48-64
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• 2021

Purpose - This study examined the effect of tariff cuts on productivity in Korea's manufacturing industries and the effect of initial productivity level before tariff cuts on productivity improvement after tariff cuts. We also attempted to identify whether import-driven or export-driven factors are more important for productivity improvement, especially in low productivity industries. Design/methodology - Since tariff reduction is a policy decision that can affect cross-industry, its impact is spread across all industries beyond the scope of a single firm through the input and output network of industry structure. Accordingly, we proposed a new method to measure the change in productivity to reflect the impact of tariff cuts across industries. Through an Armington CGE analysis, changes in endogenous variables can be directly measured after the exogenous shock of tariff reduction, and the amount of movements in productivity triggered by tariff cuts can also be calculated. We can thus assess the effectiveness of exogenous policy, such as tariff cuts, through the difference between the benchmark and counterfactual values of endogenous variables. Findings - This study confirmed that tariff reduction positively affected productivity improvement in Korea's manufacturing industries. It also confirmed that productivity gains occur in Korea's leading export industries. Finally, greater productivity gains were recorded in the group with additional high-export-share or high-import-share conditions for low productivity industries. These results are, in a limited sense, consistent with the existing studies that emphasize the importance of exports and imports on productivity improvement, especially for low productivity industries. Originality/value - The results of our experiments are different from those of non-CGE studies, which measure the industry-level change in productivity with dummy coefficients, in terms of directly calculating the amount of change in productivity. In addition, we propose that the Armington CGE model is more appropriate than the Melitz CGE model to directly measure the productivity after tariff cuts. This is because the Melitz CGE model assumes the given specific productivity density, which does not change after an overall drop of tariffs. To the best of our knowledge, this approach to directly calculating productivity by reflecting the impact of tariff reduction across industries through CGE analysis, is unprecedented in this literature.

• Environmental and Resource Economics Review
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• v.21 no.1
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• pp.129-156
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• 2012

This study analyzes the contribution to the national economy of the stable water supply through managing multi-purpose dam. For the analysis, we consider 17 major multi-purpose dams and build a CGE model with summer water and winter water being the production factors as the base year of 2007. We analyze the economic impact of meeting water demand due to the dam management and estimate the risk premium of reducing the uncertainty of water supply. The analysis results show a significant production decrease in the industries of agriculture, forestry and fisheries and tap water as well as the food and beverage industry using the former industries' output as intermediates in the production and show an production increase largely in steel industry and electronic and electrical industries. Being compared to the benchmark solution, GNP is analyzed as being reduced by 0.22~0.68%. Meanwhile, the risk premium is estimated to be about 4 billion to 24 billion won for the value 01 the measure of relative risk aversion in the range 01 0.5 to 3.0.

• Environmental and Resource Economics Review
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• v.19 no.3
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• pp.509-546
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• 2010

Although coal has been utilized as major fuel, it is known as 'most climate unfriendly' fuel. Carbon tax or tradable permit policy has been discussed as major measure for reducing production and consumption of coal, but it might be more efficient to remove subsidy on coal production and consumption. This study examines economic and environmental effects of recycling revenue from reducing subsidy on the use of coal to foster climate friendly fuel (ligneous biomass) by price subsidy or increased public expenditure. A static CGE model was applied to analyze the welfare consequences and economic impacts of two policy measures. The result shows that price subsidy policy is more desirable than creation of public demand in terms of welfare as well as overall economic impacts.

• Journal of Environmental Policy
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• v.9 no.3
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• pp.115-142
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• 2010

The voluntary mid-term greenhouse gas(GHG) emission reduction targets for 2020 among major developed and developing countries were evaluated by using the global computable general equilibrium(CGE) model. The GHG emissions of developed countries were estimated to be reduced by 14.0% from 1990 level, which implies that the GHG reduction targets of developed countries should be strengthened to reach agreement in future post-Kyoto negotiations. The voluntary participation of developing countries for GHG emissions reduction contributed to global GHG emissions reduction by 15.9% from 1990 levels, which were led by the participation of China and India. These outcomes imply that the reinforcement of GHG emission reduction targets in developed countries and the wider participation of developing countries will be necessary for the environmental effectiveness of the post-Kyoto regime. Emissions reduction based on voluntary targets will decrease the global real GDP by 1.18%.

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