Determination of the environmental tax on the basis of modified input-output Leontief-Ford model

Authors

DOI:

https://doi.org/10.15587/2312-8372.2018.133309

Keywords:

ecological-economic modelling, sustainable development, inter-industry balance, Leontief-Ford model, greenhouse gas emissions

Abstract

The object of research is the planning of production activities, which aims to harmonize the environmental and economic criteria for the development of «nature-production». One of the most problematic places in production is environmental factor consideration, since production activity has a negative impact on the environment. The reduction of the greenhouse gases share in emissions from industrial enterprises is important particularly.

Approaches to production activity modeling on the basis of inter-industry balance with environmental component are used in the course of the study.

The modified ecology-economic Leontief-Ford model for the case of expanding of input-output balance taking into account the new branch that carries out the processing of greenhouse gases is analyzed in the paper. The proposed model has a feature that allows to consider the process of greenhouse gases eliminating as a separate branch of production, inextricably linked by inter-branch links with other industries.

Calculations based on real data of input-output balance for 2016 are carried out. An aggregated matrix of direct costs is formed with the allocation of 8 major branches.

This ensures the possibility of obtaining explicit formulas for finding or assessing the magnitude of the environmental tax, depending on the pollution of the technology. In the investigation Leontief-Ford model is redesigned to a static model of input-output balance by taking into account the emergence and functioning of a new industry – the destruction of greenhouse gases. As a result of new branch introduction the matrix of direct technological costs and the matrix of direct costs increments are obtained. The price of basic products and the cost of destroying pollutants are calculated. Compared to similar well-known models, it is possible to conclude that the proposed model provides benefits when calculating the charge for pollution. As a result, the formula for finding or estimating the value of environmental tax, depending on the contamination of the technology, is implemented. The introduction of a tax rate that takes into account the contamination of production will contribute to a more rational use of the environment and, accordingly, to reduce greenhouse gas emissions to the atmosphere.

Author Biographies

Olena Liashenko, Taras Shevchenko National University of Kyiv, Vladimirska str., 60, Kyiv, Ukraine, 01033

Doctor of Economic Sciences, Professor

Department of Economic Cybernetics

Lesya Khrushch, Vasyl Stefanyk Precarpathian National University, 57, Shevchenko str., Ivano-Frankivsk, Ukraine, 76018

PhD

Department of Information Technology

References

  1. Paris Agreement: Essential Elements. (2018). United Nations Framework Convention on Climate Change. Available at: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
  2. Tadeiev, Yu. P. (2012). Rozshyrennia modeli Leontieva v umovakh ekolohichnoi zbalansovanosti. BiznesInform, 4, 132–136.
  3. Liashenko, I. M. (1999). Ekonomiko-matematychni metody ta modeli staloho rozvytku. Kyiv: Vyshcha shkola, 234.
  4. Potravny, I., Gusev, A., Stoykov, V., Gassiy, V. (2017). Modification of the Leontief-Ford Input-Output Model for the Green Economy Goals and Environment Protection. Journal of Geoscience and Environment Protection, 5 (11), 15–23. doi: http://doi.org/10.4236/gep.2017.511002
  5. Shmelev, S. E. (2011). Economic Models and the Environment: Input-Output Analysis. Ecological Economics. Springer: Dordrecht, 87–114. doi: http://doi.org/10.1007/978-94-007-1972-9_6
  6. Luptacik, M., Bohm, B. (1999). A Consistent Formulation of the Leontief Pollution Model. Economic Systems Research, 11 (3), 263–276. doi: http://doi.org/10.1080/09535319900000018
  7. Arrous, J. (1994). The Leontief Pollution Model: A Systematic Formulation. Economic Systems Research, 6 (1). doi: http://doi.org/10.1080/09535319400000008
  8. De Mesnard, L. (1992). The Asynchronous Leontief Model. Economic Systems Research, 4 (1), 25–34. doi: http://doi.org/10.1080/09535319200000002
  9. Qayum, A. (1991). A Reformulation of the Leontief Pollution Model. Economic Systems Research, 3 (4), 428–430. doi: http://doi.org/10.1080/09535319100000033
  10. Leontief, W. (1970). Environmental Repercussions and the Economic Structure: An Input-Output Approach. The Review of Economics and Statistics, 52 (3), 262–271. doi: http://doi.org/10.2307/1926294
  11. Tarancon Moran, M. A., del Rio Gonzalez, P. (2007). A combined input–output and sensitivity analysis approach to analyse sector linkages and CO2 emissions. Energy Economics, 29 (3), 578–597. doi: http://doi.org/10.1016/j.eneco.2006.02.004
  12. Nakamura, S. (1999). An interindustry approach to analyzing economic and environmental effects of the recycling of waste. Ecological Economics, 28 (1), 133–145. doi: http://doi.org/10.1016/s0921-8009(98)00031-7
  13. Nakamura, S., Kondo, Y. (2006). A waste input-output life-cycle cost analysis of the recycling of end-of-life electrical home appliances. Ecological Economics, 57 (3), 494–506. doi: http://doi.org/10.1016/j.ecolecon.2005.05.002
  14. Waugh, F. V., Dwyer, P. S. (1945). Compact Computation of the Inverse of a Matrix. The Annals of Mathematical Statistics, 16 (3), 259–271. doi: http://doi.org/10.1214/aoms/1177731089
  15. Tablytsia «vytraty-vypusk» za 2016 rik (v tsinakh spozhyvachiv). Derzhavna sluzhba statystyky Ukrainy. Available at: https://ukrstat.org/uk/operativ/operativ2006/vvp/vitr_vip/vitr_u/arh_vitr_u.html. Last accessed: 24.04.2018.
  16. Ukraina v tsyfrakh 2016: statystychnyi zbirnyk. (2017). Kyiv: Derzhavna sluzhba statystyky Ukrainy, 240.

Downloads

Published

2018-01-23

How to Cite

Liashenko, O., & Khrushch, L. (2018). Determination of the environmental tax on the basis of modified input-output Leontief-Ford model. Technology Audit and Production Reserves, 3(4(41), 41–46. https://doi.org/10.15587/2312-8372.2018.133309

Issue

Vol. 3 No. 4(41) (2018): Economics of enterprises

Section

Economic Cybernetics: Original Research

License

Copyright (c) 2018 Olena Liashenko, Lesya Khrushch

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

The consolidation and conditions for the transfer of copyright (identification of authorship) is carried out in the License Agreement. In particular, the authors reserve the right to the authorship of their manuscript and transfer the first publication of this work to the journal under the terms of the Creative Commons CC BY license. At the same time, they have the right to conclude on their own additional agreements concerning the non-exclusive distribution of the work in the form in which it was published by this journal, but provided that the link to the first publication of the article in this journal is preserved.