Elimination of Subsidy on Fossil Fuels and Reduction of Air Pollution in Mashhad (Using the Computable General Equilibrium Model)

Subject Areas : environmental management

Maryam Moghimi ^{1 *} , Naser Shahnoushi ² , Shahnaz Danesh ³ , Bitollah Akbari Moghadam ⁴ , Mahmoud Daneshvar ⁵

1 - Graduate Master's Agricultural Economics, Faculty of Engineering, Ferdowsi University of Mashhad, Iran.*(Corresponding Author)
2 - Professor, Department of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad (FUM), Iran.
3 - - Associate Professor, Department of Civil Engineering, Faculty of Engineering, Ferdowsi University Of Mashhad (FUM) ,Iran
4 - Assistant professor, Department of Economics, Faculty of Management and Accounting, Islamic Azad University of Qazvin, Iran.
5 - - Professor, Department of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad (FUM), Iran

Received: 2010-12-31 Accepted : 2011-08-02 Published : 2016-11-21

Keywords: Subsidy on fossil fuels, Emission, CGE, Mashhad,

Abstract :

Abstract Nowadays, one of the most important subjects concerning environmental quality is urban renewal and air pollution. Therefore, governments should strive to take various policies and programs to overcome the environmental problems including air pollution or negative effects of human functions on environment. This study uses an input-output table of the Khorasan-Razavi province in 2001 and amount of pollutants and greenhouse gas emissions to survey the welfare and environmental effects on decline of subsidy on fossil fuels. For this purpose, using MCP and GAMS software, welfare changes with and without environmental impact, changes in demand for fossil fuels and changes in pollutants for 4 scenarios have been studied. Results showed that the elimination of subsidy on fossil fuels would reduce the demand for fossil fuels as an intermediate input and final good. If the environmental effects are considered, in the all scenarios, the welfare changes will be positive and the welfare will increase with the omitting rate increase. The highest growth rate of welfare is obtained to be15%.

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