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GTAP Resources: Resource Display

GTAP Resource #6896

"Building Green: Economic Implications of Greening the Construction Value Chains in Emerging Markets"
by Castro, Lucio, Maksym Chepeliev and Gabriel Michelena

Construction value chains account for over 35-40 percent of energy and industrial-related CO2 emissions globally. More than two-thirds of total construction-related emissions are generated in emerging markets (EMs) with China accounting for over half of the emissions. The disproportionate contribution of the developing regions is due to emerging markets relying on more carbon-intensive methods and materials. Decarbonizing construction is challenging in EMs due to the limited adoption of novel construction technologies. What policy incentives are needed to pursue the greening of construction in developing countries? Would climate mitigation measures be enough to support green construction, or would additional specific measures be required?
We attempt to answer these questions by enhancing, first, the GTAP circular economy (GTAP-CE) database by splitting the non-metallic minerals into ‘green’ and conventional cement; and by disaggregating green and brown construction. We couple the database with the global CGE model ENVISAGE and explore a set of scenarios. We find that combining construction-specific mitigation policies with compliance with the NDC can reduce global CVC-related CO2 emissions by about 20 percent in the next decade with a 2 percent cumulative decline in GDP by 2035, which translates into the reduction in the growth rate of around 0.1-0.2 percentage points per year. By 2050 and beyond, this cost in terms of foregone output is likely to be more than offset by reduced damages to productivity and growth from global temperature increases.
We believe that this paper would be of interest to both the modeling community, as it develops a version of the GTAP Data Base with additionally disaggregated sectors, as well as policymakers by providing additional insights on the potential economic implications and policy trade-offs of greening the construction value chains with a particular focus on developing countries.

Resource Details (Export Citation) GTAP Keywords
Category: 2023 Conference Paper
Status: Published
By/In: Presented during the 26th Annual Conference on Global Economic Analysis (Bordeaux, France)
Date: 2023
Version: Draft
Created: Castro, L. (4/13/2023)
Updated: Castro, L. (4/13/2023)
Visits: 302
- Baseline development
- Dynamic modeling
- Model extension/development
- Climate change policy
- Resources and circular economy
- Economic growth

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