EU enlargement and environmental policy



sectors (Y). The primary factors in the model include labor (LAB), physical capital (CAP)
and fossil-fuel resources (RES). Factor markets are assumed to be perfectly competitive.
Labor and physical capital are treated as perfectly mobile across sectors. Fossil-fuel resources
are sector-specific. All factors are immobile between regions. However, the single market
foresees more integrated factor markets leading eventually to free movements of the
production factors within the enlarged single market.

Production

Within each region, each producing sector is represented by a single-output producing
firm which chooses input and output quantities in order to maximize profits. In the model
nested constant elasticity of substitution (CES) cost functions are employed to specify the
substitution possibilities in domestic production between capital, labor, energy and material
(non-energy) intermediate inputs. In non-fossil fuel production (ELE, EIS, OIL, Y)
intermediate non-energy goods and crude oil are employed in fixed proportions with an
aggregate of energy, capital and labor at the top level. At the second level, a CES function
describes the substitution possibilities between labor and the aggregate of capital and the
energy composite. At the third level, capital and the energy composite trade off with a
constant elasticity of substitution. The energy aggregate is, in turn, a nested CES composite of
electricity and primary energy inputs. The primary energy composite is defined as a CES
function of coal and a CES aggregate of refined oil and natural gas. Fossil fuel production
(COL, CRU and GAS) is a CES composite of a sector-specific fossil-fuel resource and a
Leontief aggregate of labor, capital and intermediate inputs. The substitution elasticity
between the specific factor and the Leontief composite is calibrated in consistency with
exogenously given price elasticities of fossil fuel supplies.

13



More intriguing information

1. Eigentumsrechtliche Dezentralisierung und institutioneller Wettbewerb
2. A Rational Analysis of Alternating Search and Reflection Strategies in Problem Solving
3. How do investors' expectations drive asset prices?
4. Spectral density bandwith choice and prewightening in the estimation of heteroskadasticity and autocorrelation consistent covariance matrices in panel data models
5. WP 48 - Population ageing in the Netherlands: Demographic and financial arguments for a balanced approach
6. Evolving robust and specialized car racing skills
7. A novel selective 11b-hydroxysteroid dehydrogenase type 1 inhibitor prevents human adipogenesis
8. EXPANDING HIGHER EDUCATION IN THE U.K: FROM ‘SYSTEM SLOWDOWN’ TO ‘SYSTEM ACCELERATION’
9. Iconic memory or icon?
10. A Duality Approach to Testing the Economic Behaviour of Dairy-Marketing Co-operatives: The Case of Ireland
11. Types of Tax Concessions for Promoting Investment in Free Economic and Trade Areas
12. The name is absent
13. Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996
14. From Aurora Borealis to Carpathians. Searching the Road to Regional and Rural Development
15. Reform of the EU Sugar Regime: Impacts on Sugar Production in Ireland
16. The name is absent
17. The name is absent
18. Income Taxation when Markets are Incomplete
19. The name is absent
20. The name is absent