EVALUATION AND MODELLING
Project: Macroeconomic modelling of government interventions in the field of environmental protection and their impacts on the macroeconomic aggregates of the Czech Republic
State: Finished
Submitter: Ministry of Environment of the Czech Republic
Time of Relevance: 2004–2005
The aim of the project is modelling the influences of environmental policy on macroeconomic variables in the Czech Republic. A component of the analysis is an investigation into the relationship between environmental policy and the social situation of a particular entity. The monitoring of the relationship between environmental policy and macro-aggregates will be the main goal of the project. For this purpose a proposal of the methodical process will be developed. During the analysis of the macro-aggregates the project will focus on the 4 main goals of economic policy (“the magical triangle”) – economic growth (HDP per capita in PPP), price level (inflation rate), employment (unemployment rate) and international trade (balance of payments). As a part of the project there will be an analysis of, how environmental policy in the Czech Republic has social impacts in society. The main goal of the project will be developing a model of how environmental policy affects the macro-aggregates and which relations will be the best.
Dynamic changes in environmental protection during the transformation period had a significant impact on macroeconomic variables in the Czech Republic. The introduction of strict limits for dangerous substances emissions or increased demands on the quality of water treatment plants caused considerable additional investments and costs for enterprises and households. It implicitly influenced the values chosen for macro-aggregates, e. g. growth of GDP or the inflation rate.
The aim of the project was to model the expected changes in state environmental policy. The project was divided into several parts:
- Analysis of legal acts which were accepted during the transformation period and on the basis of this analysis the hypothesis about the possible relation these changes had on macroeconomic aggregates was formed.
- Analysis of the impact instruments for environmental protection had on the household sector.
- Analogical analysis for the private sector.
- Analysis of foreign trade and its influence on environmental quality.
- The macroeconomic model was formed; it enables an ex-ante evaluation of state interventions in the environment to be realized.
The main output of the project was a macroeconomic model which enables the realization of an ex-ante evaluation of state interventions in the environmental field from the point of view of their macroeconomic impact.
