Author(s)

S. Lee & J. Lim

Abstract

In evaluating policy measures’ applicability, information on policy measures’ effectiveness and its possible macroeconomic consequences would be essential for policy makers especially in cases where severe macroeconomic consequences are anticipated. In the transport sector various policy measures are being considered for satisfying specific environmental quality objectives and these policy instruments usually have macroeconomic implications in their implementation. In this paper we first analyze the policy measures’ effectiveness and we develop a computable general equilibrium model where the macroeconomic impacts of environmental and economic policy variables can be analyzed in the Korean context. We analyze the impacts of widely considered policy instruments for sustainable development in the transport sector, These include fuel pricing, public transport promotion and modal shift in freight transport. Changes in macroeconomic indicators such as GDP, trade account balances and government expenditures are estimated according to the change in the policy variables. The findings from this study can be consulted in prioritizing or analyzing feasibility of environmental policies in the transport sector.

Keywords