General equilibrium analysis of trade and environment under alternative market structure: a computable general equilibrium study for India

Abstract

The purpose of the present paper is to understand general equilibrium implications of international trade and globalization on social welfare and environmental emission caused on account of energy consumption by production sectors and domestic households. We applied computable general equilibrium (CGE) modelling as our relevant methodology following Shoven and Whalley (J Econ Lit XXII:1007–1051, 1984). Constructing an energy/environmental social accounting matrix (SAM), paper attempts to purport the effects of liberalized trade over different macroeconomic aspects, energy consumption and green house gas emission through an environmental CGE model logically based on SAM. Attempts have been made to simulate various trade related policies like import liberalization, foreign capital inflow and use of energy saving technologies for examining the impact over macroeconomic variables and domestic physical environment under both perfect and monopolistic competition market structure assumption.