Modelling the impact of policy and other disturbances on sustainability policy indicators in Jersey : an economic-environmental regional computable general equilibrium analysis

The aim of my thesis is to construct a multi-sectoral general equilibrium modelling framework with endogenous environmental variables. The function of this model is to track and help explain the movement of chosen environmental, or ‘sustainability’, indicators in response to policy changes and other disturbances to the economy. Economic-environmental modelling has attracted considerable academic and policy interest around the world in recent years. The specific focus on modelling sustainability indicators constitutes a practical response to policymakers’ identification and use of individual and composite indicators to understand the environmental and social impacts of changes in economic conditions on the pursuit of sustainability objectives. In this thesis I construct a multi-sectoral economic-environmental model of the Jersey economy. As well as providing the basis for calibrating the CGE model, the construction of the region-specific economic-environmental IO database provides a unique snapshot of the structure of pollution generation in Jersey. Specifically, I undertake comprehensive attribution analyses of the demand forces that drive pollution generation in Jersey, from both a Keynesian production-based and a neo-classical consumption based perspective. The main finding of the environmental IO analysis is that local household consumption is the main source of pollution generation in Jersey, indicating that the impact on real household income is a key factor in determining the environmental effects of changes in economic conditions and policy. The main sustainability concern in Jersey is the effect of an ageing population on labour supply and the economic and environmental impacts of in-migration to overcome this problem. Therefore, I develop a CGE simulation framework that is capable of identifying the effects of scarcity on the supply side of the labour market in the presence of increased labour demand. I use this framework to analyse the impact of changes in population policy and demand conditions in the economy on environmental sustainability indicator variables.

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