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GTAP Resource #7215

"Understanding Effectiveness and Equity of Conservation Policies using Economic Theory"
by Ray, Srabashi and Thomas Hertel

Many Integrated Assessment Model (IAM) evaluate impacts of sustainability policies with high spatial granularity. Typically, though, the underlying economic mechanisms leading to those policy outcomes have limited emphasis. Yet, it is important to understand those mechanisms to design effective and equitable policies. In this paper, we build on a two-input theoretical model (Ray and Hertel 2023) to understand the impacts of a conservation policy at a spatially explicit scale which explains the economic behavior that determines the effectiveness of a conservation policy as well as its equity implications. In this paper we focus on a sustainable groundwater conservation policy targeting over-exploitation of groundwater resources in Western US (Haqiqi et al. 2023). In a previously published paper, Ray et al. (2023) shows that conservation policies that restrict the use of resources can lead to adverse distributional impacts where farmworkers who rely on those resources for their livelihoods absorb a wage-cut and job loss. So, we map the critical parameters that explain these equity implications as identified in Ray and Hertel (2023) to a more realistic multi-input production tree underlying the Simplified International Model for agricultural Prices, Land-use and the Environment at the Grid (SIMPLE-G) level. Using this method of analysis, we decompose the impacts of a conservation policy into the supply response comprising of the extensive and intensive margin response net of the conservation policy shock.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Version: 2
Created: Ray, S. (4/12/2024)
Updated: Ray, S. (6/3/2024)
Visits: 117
- Sustainable development
- Water availability
- Labor market issues
- Baseline development
- North America

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