Author: Ziqian Gong (Ph. D. in applied economics)

Publisher:

Published: 2022

Total Pages: 0

ISBN-13:

This dissertation is composed of three chapters economic modeling and environmental policy evaluation. The first chapter explores the conflicts between preserving natural resources and economic activities. This paper establishes a model to estimate the threshold for the landowners to preserve the natural resource or do economic activities by taking the potential option value (from uncertainty and the irreversibility) into account when they need to decide between these two choices. By employing the real options theory with the numerical method, we could evaluate how the choices will be made towards this dilemma from the perspective of landowners. As an application, the result could provide a reliable and precise policy indication for the government to perform a more rational compensation policy toward natural resource protection than before. The second chapter investigates the impact of monetary policy on climate change. Climate change has been recognized as the most significant externality of today’s global economy. Current research has been predominantly focused on fiscal policy, which will be subject to the political environment. This paper establishes a dynamic general equilibrium model of a closed economy to find the optimal monetary policy under climate change to reduce carbon emissions and encourage the application of renewable energy. We evaluate how renewable energy firms, fossil fuel energy firms, and general goods production firms will respond to different monetary policies from the central bank. As an application, our results could provide a reliable policy tool for decision-makers to meet specific climate goals and encourage a transition to renewable energy. The third chapter provides a way to do the sustainability analysis of the Great Lakes region. The economic impact of climate change on key economic sectors has been studied for a long time. This study established an integrated energy- environmental-economic dynamic recursive computable general equilibrium model. Using this spatial computable general equilibrium (CGE) model, we show how to analyze environmental sustainability and individual well-being resulting from changes in the Great Lakes area’s complex economic and environmental systems. Our general equilibrium framework models interactions between human (economic, behavioral, social) and the environment and represent the interactions between local, regional, national, and global systems across space. This paper provides a tool to understand these linkages between economic agents and different sectors for the policymakers. So, they could use our work to assess the risk that may impact agriculture, energy, and manufacturing sectors under climate change and devise a related policy to maximize the welfare of its population and economy sustainably.