Abstract
We explore an input–output based framework for optimizing production in the Greek economy, under constraints relating to energy use, final demand, greenhouse gas emissions and solid waste. Using empirical data, we consider the effects on the maximum attainable gross value of production when imposing various pollution abatement targets. Our results quantify those effects as well as the magnitude of economic sacrifices required to achieve environmental goals, in a series of policy scenarios of practical importance. Because air pollution and solid waste are not produced independently of one another, we identify the settings in which it is meaningful to institute a separate policy for mitigating each pollutant, versus those in which only one pollutant needs to be actively addressed. The scenarios considered here represent a range of options that could be available to policy makers, depending on the country's international commitments and the effects on economic and environmental variables.
Notes
2 http://epp.eurostat.ec.europa.eu/portal/page/portal/prodcom/introduction; http://www.cres.gr/kape/pdf/datainfo/2005_gr.pdf; http://unstats.un.org/unsd/industry/
3 Data obtained online at http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/2761.php and http://www.ceip.at/emission-data-webdab/emissions-as-reported-by-parties
4 GVP includes both the value of the intermediate goods and services that have been used in the production process, and the payments that have been defrayed to the primary factors of production. By comparison, GDP is a more restrictive indicator since it does not include the value of the intermediate goods and services.
6 For countries that lie on the upward sloping part of the environmental Kuznets curve, increased production comes with increased pollution, or, equivalently, the attainment of improved environmental conditions requires significant economic sacrifices.