Economic Implications of CO2 Emission Reduction in Japan Applying a Dynamic CGE Model with Endogenous Technological Change： Use of Emission Permit Revenue

This study analyzes the economic and environmental impacts of a climate change measure in Japan using a single-country dynamic computable general equilibrium model with technological change as an endogenous variable. In this way, a comprehensive analysis of the relationships between climate change and its measures, technology, and economy has been done. The model uses technological change as the accumulation of knowledge capital that is derived from research and development investment. The study investigates the impacts of a climate change measure considering the use of emission permit revenue and technological change induced by the policy implementation in the Japanese economy. Simulation results show that there is compatibility between CO2 emission reduction and positive effects on GDP that depends on the ways of the revenue use and technological change induced by emission reduction. However, it is not possible to find the ways to realize positive effects on both GDP and welfare simultaneously in the study. The sensitivity analysis for the elasticity of substitution between knowledge capital and other inputs also confirms the obtained results.

Economic Analysis of CO2 Emission Abatement Applying a Dynamic CGE Model with Endogenous Technological Change： Impacts of the Time Horizon

We evaluate economic and environmental impacts of climate change mitigation in a country scale considering various time horizons in the analysis applying a single-country dynamic computable general equilibrium model with endogenous technological change. Although there is a possibility that Gross Domestic Product （GDP） becomes larger for the abatement cases than the baseline case in the earlier years, it tends to be lower than that in the later years. The longer the time horizon and/or the more severe the abatement, the larger the negative impacts will be. When subsidizing R＆D investment, increase in GDP compared to the baseline case is realized in the middle of the time horizon, and the larger increase tends to be observed for the longer-term cases. These results would be due to technological change induced by the subsidies and emission abatement. Environmental indicators are also improved. We showed that the results were influenced by the target time horizon when using an intertemporal dynamic model.

Socio-economic and energy-environmental impacts of technological change on China's agricultural development under the carbon neutrality strategy

Promoting agricultural modernisation through technological change is an important strategy for China.China's carbon neutrality strategy is leading to systemic socio-economic changes that could exacerbate the uncertainty of agricultural development.Therefore,applying a computable general equilibrium(CGE)model,this study characterises the agricultural sector in detail,introducing endogenous technological change proxied by research and development(R&D)to assess the impact of different technological change scenarios on agricultural development under the carbon neutrality target.The results show that allocating carbon revenue for R&D inputs can mitigate the significant negative impact of achieving carbon neutrality on knowledge capital and production in agricultural sectors.Overall,using carbon revenue only for R&D input in crop sectors has the optimal effect on increasing the agricultural sectors'knowledge capital,improving crop production and profit,reducing crop external dependence and promoting the synergistic reduction of carbon and pollutant emissions.However,this scenario has the largest negative impact on macro-economics and household welfare.In contrast,allocating carbon revenue to promote technological change in broader non-energy sectors or both crops and non-energy sectors can effectively mitigate negative socio-economic impacts,but the positive impact on agricultural development is minimal.These findings provide practical insights for the rational use of carbon revenue to expand agricultural R&D investment and ensure balanced agricultural and economic development under the carbon neutrality target.