Environmental Quality and Residuals Management: Report of a Research Program on Economic, Technological, and Institutional Aspects

By Allen V. Kneese; Blair T. Bower | Go to book overview

will be substantial. The results of the main studies do suggest, however, that if the nation approaches its REQM problems with reasonably efficient programs and permits some time for adjustments to be made, it will be possible to reduce residuals discharges very substantially below current levels while at the same time enjoying economic growth at only a slightly diminished rate over the remainder of this century. This would be true whether high or low population growth occurs. Low population growth does yield a considerable saving in REOM costs in the longer run (beyond 1980 to 1985) and appears to be highly desirable on a number of other grounds. REQM costs will be large; their size emphasizes the importance of paying close attention to cost effectiveness in the design of RFQM policies and programs.


Appendix 8-A
A More Precise Discussion of the Macro Model

This appendix describes the model developed by Resources for the Future to project economic activity, resource requirements, and residuals loadings. In the body of this chapter we introduced the general framework and assumptions of this model; here we outline the structural relationships involved and indicate the way in which they were employed for the purposes of projection and policy analysis.

The core of this model is the 185-sector University of Maryland Interindustry Forecasting Model developed and maintained by Clopper Almon and the staff of the Interindustry Forecasting Project at the university. This core was modified and added to in a number of ways to be discussed in more detail below. These modifications involved extension of the time horizon from 1980 to the year 2000, modifications to make the model more sensitive to demographic changes, the introduction of a mechanism to permit changes in technology on a sector-by-sector basis, and the internalization of the public component of final demand, treated as an exogenous input in the original model.

In addition, a number of subsidiary models were developed. The complete package, which, for convenience, we shall refer to as the RFF macro model, is presented schematically in figure 8-A-1. In contrast to the more

AUTHORS' NOTE.: This appendix is based on material prepared by Ronald G. Ridker.

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