QUEEN: Quantitative Economics for the Environment

Economic models are widely used to support complex decision-making, because they can help to simulate future economic developments and predict the economic consequences of a given policy.

The state of the environment influences economic development because our economic systems make abundant use of natural resources. Whereas some of these resources are fully renewable such as wind and solar power, others are limited such as land and water, or non-renewable such as oil and gas. At the same time, human economic activities affect the quality of the natural environment through the discharge of the negative by-products of production and consumption processes in the form of pollution. Examples include the emission of greenhouse gases like CO₂ from industrial activities, the leaking of nutrients from agriculture into soils, surface and groundwaters etc. Economic models are powerful tools to understand and quantify the complex link between economic activities and the natural environment. Developing and using an integrated model framework, one can analyze these links and feedbacks simultaneously in a dynamic way.

The economic models developed at IVM have for instance been used to (i) measure the economic impact of climate change, (ii) inform the government about a sustainable national income level for the Netherlands, or (iii) identify the least cost way to improve water quality in transboundary river basins. Current research in the cluster includes the modeling of the oil market, climate change and flood risks, freshwater water allocation, the impact of expected crops yield changes on developing countries’ economies, and the development and simulation of a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (THREEME) for the French economy.

The QUEEN cluster is led by Prof. dr. M.W. Hofkes.

Projects

• ACTS
• ADEME
• EXIOPOL
• WEMPA

Key publications

• Safarzynska, K. & Bergh, J.C.J.M. van den (2010). Evolutionary models in economics: a survey of methods and building blocks. Journal of Evolutionary Economics. DOI:10.1007/s00191-009-0153-9. 
• Anthoff, D. & Tol, R.S.J. (2009). The Impact of Climate Change on the Balanced Growth Equivalent: An Application of FUND. Environmental and Resource Economics 43(3), 351-367. 
• van Beukering, P.J.H., Bartelings, H., Linderhof, V.G.M. & Oosterhuis, F.H. (2009). Effectiveness of unit-based pricing of waste in the Netherlands: Applying a general equilibrium model. Waste Management 29(11), 2892-2901. 
• Brouwer, R. & Hofkes, M. (2008). Integrated hydro-economic modelling: Approaches, key issues and future research directions. Ecological Economics, 66(1), 16-22.
• Brouwer, R., Hofkes, M. & Linderhof, V. (2008). General equilibrium modelling of the direct and indirect economic impacts of water quality improvements in the Netherlands at national and river basin scale. Ecological Economics, 66(1), 127-140.