Modelling the health related benefits of environmental policies - a CGE analysis for the eu countries with gem-e3



pollutants, taking into account the transportation (between countries) and
transformation mechanism of the pollutants; in a final step the damage generated by
the concentration/deposition of pollutants is computed in physical units and monetised
through a valuation function.

- The model allows to calculate the welfare effects of various environmental policies,
such as taxes and various forms of pollution permits. It is also possible to consider
various systems for revenue recycling.

Figure 1 gives the basic scheme of the standard version of the GEM-E3 model.

Goods Market Equilibrium

PRODUCERS GOVERNMENT       CONSUMERS        FOREIGN

Income flows and Transfers

SURPLUS OR DEFICIT OF AGENTS

ENVIRONMENT

Figure 1: The standard GEM-E3 model



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