Assessment of the Effectiveness of Global Climate Policies Using Coupled Bottom-Up and Top-Down Models

25 Pages Posted: 20 Mar 2015

See all articles by Maryse Labriet

Maryse Labriet

KanLo Consultants

Laurent Drouet

Fondazione Eni Enrico Mattei (FEEM)

Marc Vielle

Ecole Polytechnique Fédérale de Lausanne

Richard Loulou

KanLo Consultants S.A.R.L.

Amit Kanudia

KanORS

Alain Haurie

Ordecsys Switzerland

Date Written: March 18, 2015

Abstract

In order to assess climate mitigation agreements, we propose an iterative procedure linking TIAM-WORLD, a global technology-rich optimization model, and GEMINI-E3, a global general equilibrium model. The coupling methodology combines the precise representation of energy and technology choices with a coherent representation of the macro-economic impacts, especially in terms of trade effects of climate policies on energy-intensive products. In climate mitigation scenarios, drastic technology breakthroughs are required as soon as possible, especially in large emitting countries, and in all sectors of the economy. Energy-intensive industries tend to be delocalized in regions where low-carbon production is feasible and cheap, or in regions without emission cap. However, emission leakage remains small, mainly due to global lower oil demand, and energy exporting countries are extremely penalized given lower energy exports. Emission reduction at least in the power sector and in energy-intensive industries of developing countries must be considered to reach the 2°C target.

Keywords: Climate Policies, Energy, Techno-economic modelling, Macro-economic Modelling, World

JEL Classification: Q5, Q54, Q58

Suggested Citation

Labriet, Maryse and Drouet, Laurent and Vielle, Marc and Loulou, Richard and Kanudia, Amit and Haurie, Alain, Assessment of the Effectiveness of Global Climate Policies Using Coupled Bottom-Up and Top-Down Models (March 18, 2015). FEEM Working Paper No. 023.2015. Available at SSRN: https://ssrn.com/abstract=2580216 or http://dx.doi.org/10.2139/ssrn.2580216

Maryse Labriet (Contact Author)

KanLo Consultants ( email )

Lyon
France

Laurent Drouet

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

Marc Vielle

Ecole Polytechnique Fédérale de Lausanne ( email )

Station 5
Odyssea 1.04
1015 Lausanne, CH-1015
Switzerland

Richard Loulou

KanLo Consultants S.A.R.L. ( email )

Lyon
France

Amit Kanudia

KanORS ( email )

Alain Haurie

Ordecsys Switzerland ( email )

Place de l'Etrier 4
Chêne-Bougeries, 1224
Switzerland

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