Economic effects of environmental and energy policies: A computable general equilibrium model for Poland

In this paper economywide effects of SO2 emission reduction in Poland are studied. In order to fulfill the commitments required by the Second Sulfur Protocol (SSP), Poland needs to achieve roughly a 50% reduction of SO2 emission in relation to 1992 no later than in 2010. A 16% reduction was already achieved after two years of the Protocol signature, in 1996, and it keeps progressing. Nevertheless the Polish Government did not ratify the SSP yet, because it is afraid of potential negative consequences for the economy. A Computable General Equilibrium model was applied to simulate the likely impact of the SSP policy on the Polish economy. Simulation results show fulfilling by Poland the commitments resulting from the SSP will have a modest impact on economic indicators.