An Optimized Microeconomic Modeling System for Analyzing Industrial Externalities in Non-OECD Countries

TL;DR

This paper introduces an integrated microeconomic modeling system to analyze and address externalities in pollution, agriculture, and energy industries within non-OECD countries, proposing incentive-based solutions over traditional taxes.

Contribution

It presents a novel systems modeling approach that combines qualitative and quantitative analysis to internalize externalities through incentives and cooperation.

Findings

Identified key externalities in three major industries.

Proposed alternative solutions to Pigouvian taxes.

Demonstrated effectiveness of incentive-based policies.

Abstract

In this paper, we provide an integrated systems modeling approach to analyzing global externalities from a microeconomic perspective. Various forms of policy (fiscal, monetary, etc.) have addressed flaws and market failures in models, but few have been able to successfully eliminate modern externalities that remain an environmental and human threat. We assess three primary global industries (pollution, agriculture, and energy) with respect to non-OECD entities through both qualitative and quantitative studies. By combining key mutual points of specific externalities present within each respective industry, we are able to propose an alternative and optimized solution to internalizing them via incentives and cooperative behavior rather than by traditional Pigouvian taxes and subsidies.