Regional CGE System Development And Application Under Governance

Through the summary of the characteristics of the regional CGE, and the conclusion of development problems of the regional CGE, this article established a CGE system suitable for regional simulation by improving the general CGE model. This regional CGE system uses the two-level structure of a region - other areas - other regions of the world, contains 40 economic sectors, differentiates the central and local governments, urban residents and rural residents, and takes consideration of both the international trade and the domestic trade, so it can reflect the characteristics of China's national and regional conditions better than the general CGE model.Since the environmental governance is very important, and the application of policy simulation in the environmental policy analysis proves to be effective, this article attempts to apply the regional CGE system to analyze the environmental governance, and therefore some equations of the regional CGE model have been improved so that analysis of the policys such as the pricing policy would be more user-friendly.Using the object-oriented programming language C# and Microsoft Access database, the author developed a regional CGE system in the environment of Visual Studio 2005. This CGE system is more flexible in both the initialization process and the modeling functions, which extends its application widely.The aiticle applied the regional CGE system in the simulation of environmental governance, and analyzes both the resource and energy pricing and the tax policy, and we come to the following major conclusions:From the view of the resource and energy pricing, this article analyzed the impact of price rise of water, energy, and natural gas by 10 percent on the economy respectively. As a result, although raising price exerts negative impact on the output of corresponding sectors to a certain degree, it has little influence on the overall economy. It is an effective energy-saving and emission-reducing measure. Price increase will lead to a decline in demand, thereby enhancing the energy-saving awareness of the whole community, and supporting environmental protection and sustainable development.From the perspective of tax policies, this paper simulated the impact of 5 percent water tax and carbon tax on the overall economy. The results showed that, from the viewpoint of emission reduction, the effect of tax policy is better than that of pricing policy, and the influence of carbon tax is bigger than that of water tax. In addition, the collection of water tax and carbon tax will increase the government revenue, and the collection of carbon consumption tax can exert a more significant impact on GDP and government revenue than that of carbon production tax, and the two methods has considerable effect in emission reduction.