Computable General Equilibrium Model on Air Pollution Abatement Policies with Indonesia as a Case Study

Abstract

This paper is to develop an economic model that is appropriate to analyse the expected impact of air pollution policies on national economic performance and on household incomes for various socio‐economic groups. The model includes the impact of economic activities on air quality in urban areas as well as the impact of urban air quality on the economy. Application of this model in Indonesia suggests that an implementation of policies to improve urban air quality might also induce a higher GDP and increase the income of poor households in the country.