TRANSPORT, SPATIAL ECONOMY, AND THE GLOBAL ENVIRONMENT

In this paper we investigate interdependencies between transport, spat ial economy, and the environment in the context of policies aimed at a global environmental target. A small-scale spatial price equilibrium model is formulated and used to perform a number of numerical simulati ons, and to investigate market-based versus environmentally sound spat ioeconomic configurations with first-best and second-best policies, an d with endogenous environmental technologies. We thus present a modell ing framework capable of dealing with complexities associated with the simultaneous regulation, first-best and second-best, of multiple inte rdependent sectors in a spatial setting.