Capturing Key Energy and Emission Trends in CGE Models: Assessment of Status and Remaining Challenges

79 Pages Posted: 10 Feb 2020

See all articles by Taran Faehn

Taran Faehn

Statistics Norway - Research Department

Gabriel Bachner

University of Graz

Robert H. Beach

RTI International; North Carolina State University - Department of Agricultural & Resource Economics

Jean Chateau

Organization for Economic Co-Operation and Development (OECD)

Shinichiro Fujimori

National Institute for Environmental Studies

Madanmohan Ghosh

Environment and Climate Change Canada

Meriem Hamdi-Cherif

CIRED, International Research Center on Environment & Development, France

Elisa Lanzi

Organization for Economic Co-Operation and Development (OECD)

Sergey Paltsev

Massachusetts Institute of Technology (MIT)

Toon Vandyck

European Union - European Commission

Bruno Cunha

Universidade Federal do Rio de Janeiro (UFRJ)

Rafael Garaffa

Universidade Federal do Rio de Janeiro (UFRJ)

Karl W Steininger

University of Graz

Date Written: 2020

Abstract

Limiting global warming in line with the goals in the Paris Agreement will require substantial technological and behavioural transformations. This challenge drives many of the current modelling trends. This paper undertakes a review of 17 state-of-the-art recursive-dynamic computable general equilibrium (CGE) models and assesses the key methodologies and applied modules they use for representing sectoral energy and emission characteristics and dynamics. The purpose is to provide technical insight into recent advances in the modelling of current and future energy and abatement technologies and how they can be used to make baseline projections and scenarios 20-80 years ahead. In order to represent likely energy system transitions in the decades to come, modern CGE tools have learned from bottom-up studies. We distinguish between three different approaches to baseline quantification: (a) exploiting bottom-up model characteristics to endogenize responses of technology investment and utilization, (b) relying on external information sources to feed the exogenous parameters and variables of the model, and (c) linking the model with more technology-rich, partial models to obtain bottom-up- and pathway-consistent parameters.

Keywords: computable general equilibrium models, long-term economic projections, energy, technology change, emissions, greenhouse gases

JEL Classification: C680, O130, O140, O180, Q430, Q540

Suggested Citation

Faehn, Taran and Bachner, Gabriel and Beach, Robert H. and Chateau, Jean and Fujimori, Shinichiro and Ghosh, Madanmohan and Hamdi-Cherif, Meriem and Lanzi, Elisa and Paltsev, Sergey and Vandyck, Toon and Cunha, Bruno and Garaffa, Rafael and Steininger, Karl W, Capturing Key Energy and Emission Trends in CGE Models: Assessment of Status and Remaining Challenges (2020). CESifo Working Paper No. 8072, Available at SSRN: https://ssrn.com/abstract=3535282

Taran Faehn (Contact Author)

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

Gabriel Bachner

University of Graz ( email )

Universitaetsstrasse 15 / FE
A-8010 Graz, 8010
Austria

Robert H. Beach

RTI International ( email )

3040 Cornwallis Road
PO Box 12194
Research Triangle Park, NC 27709-2194
United States
1-919-485-4479 (Phone)
1-919-541-6683 (Fax)

HOME PAGE: http://www.rti.org/rbeach

North Carolina State University - Department of Agricultural & Resource Economics ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
United States

Jean Chateau

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Shinichiro Fujimori

National Institute for Environmental Studies ( email )

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

Madanmohan Ghosh

Environment and Climate Change Canada ( email )

Gatineau
Canada

Meriem Hamdi-Cherif

CIRED, International Research Center on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

Elisa Lanzi

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Sergey Paltsev

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Toon Vandyck

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

Bruno Cunha

Universidade Federal do Rio de Janeiro (UFRJ) ( email )

Av; Pasteur, 250
terreo - Bairro Maracana
Rio de Janeiro, Rio de Janeiro 23890000
Brazil

Rafael Garaffa

Universidade Federal do Rio de Janeiro (UFRJ) ( email )

Av; Pasteur, 250
terreo - Bairro Maracana
Rio de Janeiro, Rio de Janeiro 23890000
Brazil

Karl W Steininger

University of Graz ( email )

Universitaetsstrasse 15 / FE
A-8010 Graz, 8010
Austria

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