Dynamic Economic Evaluation of Environmentally Friendly Cities

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This study consists of four parts. The first part is a comparative static analysis of Obihiro city in Hokkaido, Japan. A computable general equilibrium (CGE) model is developed internalizing waste generation, recycling, and abatement. By applying this model, impacts of promotion of waste recycling on the industrial structure, regional welfare etc. are analyzed. This part is also situated as a preliminary analysis in this research.The second part extends the model developed in the first part into an intertemporal one. Making the model dynamic is conducted by maximizing the sum of the discounted household utility function. Impacts of promotion of waste recycling on the industrial structure and regional welfare etc. are simulated as well. The simulation results show that promotion of waste recycling increases the regional welfare and self-sufficiency rate in economic products. These results illustrate the feature of an environmentally friendly city.The third part assumes the future decreasing trend in the population of the study area. By employing the almost same model in the second part, some simulations are conducted. Although the future population decreases, the utility level per capita shows an increasing trend depicting the sustainable development of the study area.The final part deals with a hypothetical numerical simulation model differing from the previous parts. A hypothetical city is assumed being divided into 25 zones. In each zone, own economic activities are located and people reside. In this city, existence of natural environment is assumed as public goods. The model is formulated as an intertemporal one as well. The simulation results demonstrate that the concentration of residents around the city center yields the higher welfare. Moreover the natural environment contributes an increase in household utility as well.