Technical Notes

Manual on Computed General Balance Models (CGBM) for LAC Economies with Emphasis on the Economic Analysis of Climate Change

AUTHOR(s): Chisari, Omar , Maquieyra, Javier , Miller, Sebastian
PUBLISHED: September 2012


This paper presents a recursive, dynamic CGBM to evaluate the impact of climate change on six six Latin American and Caribbean economies (Argentina, Brazil, Chile, El Salvador, Jamaica and Peru). The medium-sized model considers the relative prices mechanism and structural economic changes, as well as the impact of climate change on revenue levels and policies. Policies and conditional regulations automatically activated by the frequency or magnitude of shocks are also considered. The results demonstrate the importance of considering not only scale effects (activity level) but also composition effects (structural changes) in order to understand the final impact of policies. The self-contained manual presents an in-depth description of the construction process of the social accounting matrix, the GAMS/MPSGE interface representation of the model, and the reading of results in macroeconomic, distributional and environmental indicators. Practical examples are also presented.

Related Research by JEL Codes:
(or click here to find research by JEL Codes)
  • A Framework for Estimating the Incremental Costs of Climate Change in Infrastructure
    Technical Notes
    IDB-TN-749 - February 2016

    The general objective of this study is to review the international literature and best practices to develop a methodological framework capable of quantifying the increase in investments necessary for a traditional standard of living in a world subject to climate change. This methodology is then applied to two case studies: Bolivia and Chile. In particular, the document addresses the economics of a ... (View publication)

  • How Can Latin America Help the World to Cope with Climate Change?
    Policy Brief
    IDB-PB-182 - August 2013

    Latin America has a comparative advantage in deforestation compared to other forms of climate change mitigation. Thus, to the extent that Latin America should engage in mitigation, the optimal climate change policy should manage these advantages by generating incentives in Latin America to deal with forestry. This paper describes the problem of deforestation and studies the market failures that ar ... (View publication)

  • Climate Change and Extreme Weather Events in Latin America: An Exposure Index
    Technical Notes
    IDB-TN-490 - January 2013

    Climate change is changing the frequency and intensity of Extreme Weather Events (EWEs), particularly in poor developing countries, and the international community is increasingly suggesting the design of adaptation funds to resolve this situation. Measures of vulnerability and exposure to EWEs are a critical instrument in guaranteeing a transparent, efficient and equitable allocation process in t ... (View publication)

Hello, Welcome to the IDB!

Please join our mailing list by simply entering your email below.