Spatial price equilibrium and the transport sector : a trade-consistent SCGE model

This paper presents a framework for an SCGE model that is compatible with the Armington assumption and explicitly considers transport activities. In the model, the trade coefficient takes the form of a potential function,and the equilibrium market price becomes similar to the price index of varietal goods in the context of new economic geography (NEG). The features of the model are investigated by using the minimal setting, which comprises two non-transport sectors and three regions. Because transport costs are given exogenously to facilitate study of their impacts, commodity prices are also determined relative to them. The model can be described as a system of homogeneous equations, where an output in one region can arbitrarily be determined similarly as a price in the Walrasian equilibrium. The model closure is sensitive to formulation consistency so that homogeneity of the system would be lost by use of an alternative form of trade coefficients.

Agglomeration and directional imbalance of freight rates : the role of density economies in the transport sector

This paper examines the conventional assumption that bilateral transport costs are symmetric. We develop an economic geography model with transport sector in which asymmetric freight rates can occur as a result of density economies. Comparing this to models without density economies, we show that agglomeration of economic activities is more likely to emerge and that multiple equilibria can emerge for some parameters. Then we show the change in its bifurcation and stability of equilibrium and conclude that economies of density in transport flows can act as an agglomeration force.

A methodology for territorial distribution of CO2 emission reductions in transport sector

Greenhouse gas emission reduction is the pillar of the Kyoto Protocol and one of the main goals of the European Union (UE) energy policy. National reduction targets for EU member states and an overall target for the EU-15 (8%) were set by the Kyoto Protocol. This reduction target is based on emissions in the reference year (1990) and must be reached by 2012. EU energy policy does not set any national targets, only an overall reduction target of 20% by 2020. This paper transfers global greenhouse gas emission reduction targets in both these documents to the transport sector and specifically to CO2 emissions. It proposes a nonlinear distribution method with objective, dynamic targets for reducing CO2 emissions in the transport sector, according to the context and characteristics of each geographical area. First, we analyse CO2 emissions from transport in the reference year (1990) and their evolution from 1990 to 2007. We then propose a nonlinear methodology for distributing dynamic CO2 emission reduction targets. We have applied the proposed distribution function for 2012 and 2020 at two territorial levels (EU member states and Spanish autonomous regions). The weighted distribution is based on per capita CO2 emissions and CO2 emissions per gross domestic product. Finally, we show the weighted targets found for each EU member state and each Spanish autonomous region, compare them with the real achievements to date, and forecast the situation for the years the Kyoto and EU goals are to be met. The results underline the need for ?weighted? decentralised decisions to be made at different territorial levels with a view to achieving a common goal, so relative convergence of all the geographical areas is reached over time. Copyright © 2011 John Wiley & Sons, Ltd.