@article{Li:331085,
      recid = {331085},
      author = {Li, Jennifer Chung-I},
      title = {A Dynamic Recursive Analysis of A Carbon Tax Including  Local Health Feedback},
      address = {2003},
      pages = {38},
      year = {2003},
      note = {Presented at the 6th Annual Conference on Global Economic  Analysis, The Hague, The Netherlands},
      abstract = {An ancillary benefit of Greenhouse Gas (GHG) mitigation  refers to a benefit derived from GHG mitigation that is in  addition to the reduction in adverse impacts of global  climate change.  One type of ancillary benefit of GHG  mitigation is reduced local air toxics, which is associated  with improved health.  Middle-income countries, as defined  by the World Bank, like Thailand are in a unique position  to obtain large ancillary health gains from reduced local  air toxics when GHG is mitigated by curbing fossil fuel  consumption.   The author assesses whether by capturing the  local health effects of reduced air toxics as an ancillary  effect of GHG mitigation, and by allowing this benefit to  feed back into the economy, the desirability of policies  aimed at GHG mitigation will change, from the standpoint of  macroeconomic and welfare indicators.  The author uses a  multi-period comprehensive cost/benefit framework - a  Dynamic Recursive Computable General Equilibrium (CGE)  model - for the assessment.  A health effects sub-model  takes the PM10 emissions (volume) information from the CGE  model to assess the implications for ambient PM10  concentration, local health, labor supply and medical  expenditures.  The saved labor is exogenously fed back to  the CGE model to find the economy-wide repercussions  whereas the adjustment of medical expenditures due to  improved environmental quality is endogenized in the model.   To illustrate this methodology, the methodology is applied  to the country of Thailand, a middle-income country, for  the period of 1998-2010.  The base year was calibrated to a  1998 Social Accounting Matrix originally obtained from the  Thai Development Research Institute. Findings include: (1)  average GDP growth with the carbon tax relative to the no  policy scenario turns positive when the health feedback is  included, and (2) the welfare of households with the carbon  tax relative to the no policy scenario improve by a factor  of two when health feedback in incorporated.  An extensive  sensitivity analysis over these results was then carried  out, using upper and lower bound values instead of the  central or default values for 11 key parameters.  A tornado  diagram was used to identify the parameters whose  uncertainties influence key results the most.  Three  parameters were identified as the most influential  parameters - the distribution of source term contributions  to ambient PM10 (KCOEFF), the capital-to-output ratio  (KSCALE), and the elasticity of substitution for top level  CES production technology (AGGINP).  The key results  corresponding with alternative assumptions about these  three parameters were then evaluated more closely.  Under  three alternative scenarios - low bound KCOEFF, low bound  KSCALE, and high bound AGGINP - the key results or findings  alluded to earlier no longer hold.  Although the author  does not have the information about the probability  distributions of the occurrence of alternative values for  these parameters, she assesses the likelihoods of these  alternative values’ being closer to reality than their  default values.},
      url = {http://ageconsearch.umn.edu/record/331085},
}