INPUT-OUTPUT SIMULATIONS OF ENERGY, ENVIRONMENT, ECONOMY INTERACTIONSIN THE UK

This paper shows how a number of the complex interrelationships betwee n energy, environment and economic welfare can be investigated with th e aid of a 10-sector input-output (I-O) model of the UK, with pollutio n emission coefficients and a European sulphur deposition vector. The paper reviews relevant past applications of I-O analysis in the energy -environment area and describes the ENDAM program and its operation. I t is used to simulate the effects of a variety of policies and possibi lities, not only through changes in exogenous variables (find demand a nd income taxes and transfers) but also through changes in the structu ral matrices and their coefficients. In each case the full effects, di rect, indirect and income induced, can be traced and the changes in co mparative static equilibrium values discovered. In this way, policy is sues connected with energy use and environmental impacts, employment a nd economic welfare have been investigated.