Environmentally adjusted domestic product and emission control policies; a dynamic simulation modelling approach: an example from the French carbon dioxide emission prospects

This paper aims at defining some ecologically adjusted aggregates with a view to building a "green" accounting framework. The model used for the research is based on both systems dynamics modelling and energy inputâoutput analysis. We consider that this combined method has the interesting property of accurately tracing the physical foundations of economic sectors' interactions, as well as their impacts on the natural environment. In this paper, another property will be stressed, the one which tests the relevant type of policy approach. In effect, according to our interests, it is necessary to measure problems of resources allocation or sequential choices between different alternatives: why and how a particular solution comes to be selected from a multiplicity of alternatives. First, we present our appraisal of ecologically adjusted measurements through the structure of the model. Secondly, a comparison between different environmental policies is applied so as to grasp the critical information transmitted by these measurements to illustrate the feasible growth path of the French economy subject to the Kyoto targets.