Witch - a World Induced Technical Change Hybrid Model

31 Pages Posted: 30 Nov 2006

See all articles by Valentina Bosetti

Valentina Bosetti

Bocconi University; CMCC - Euro Mediterranean Centre for Climate Change

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (DESP); Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Emanuele Massetti

Georgia Institute of Technology; CESifo (Center for Economic Studies and Ifo Institute); CMCC - Euro Mediterranean Centre for Climate Change

Massimo Tavoni

Fondazione Eni Enrico Mattei (FEEM); Princeton University - Princeton Environmental Institute

Date Written: November 2006

Abstract

The need for a better understanding of future energy scenarios, of their compatibility with the objective of stabilizing greenhouse gas concentrations, and of their links with climate policy, calls for the development of hybrid models. Hybrid because both the technological detail typical of Bottom Up (BU) models and the long run dynamics typical of Top Down (TD) models are crucially necessary. We present WITCH - World Induced Technical Change Hybrid model - a neoclassical optimal growth model (TD) with energy input detail (BU). The model endogenously accounts for technological progress, both through learning curves affecting prices of new vintages of capital and through R&D investments. In addition, the model captures the main economic interrelationships between world regions and is designed to analyze the optimal economic and environment policies in each world region as the outcome of a dynamic game. This paper provides a detailed description of the WITCH model, of its baseline, and of the model calibration procedure.

Keywords: Climate Policy, Hybrid Modelling, Integrated Assessment, Technological Change, Energy Mix

JEL Classification: O33, O41, Q43

Suggested Citation

Bosetti, Valentina and Carraro, Carlo and Galeotti, Marzio and Massetti, Emanuele and Tavoni, Massimo, Witch - a World Induced Technical Change Hybrid Model (November 2006). University Ca' Foscari of Venice Economic Research Paper No. 46/06. Available at SSRN: https://ssrn.com/abstract=948382 or http://dx.doi.org/10.2139/ssrn.948382

Valentina Bosetti

Bocconi University

Via Gobbi 5
Milan, 20136
Italy

CMCC - Euro Mediterranean Centre for Climate Change

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Carlo Carraro (Contact Author)

Fondazione Eni Enrico Mattei (FEEM) ( email )

Isola di San Giorgio Maggiore 8
Venezia, 30124
Italy
+39 04 12700460 (Phone)
+39 04 12700412 (Fax)

Ca' Foscari University of Venice ( email )

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Venice, 30121
Italy
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+39 04 1234 9176 (Fax)

HOME PAGE: http://www.carlocarraro.org/

CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division) ( email )

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Italy
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+39 0832 277603 (Fax)

IPCC ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Centre for European Policy Studies, Brussels

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Belgium
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Green Growth Knowledge Platform ( email )

International Environment House
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Geneva, 1219
Switzerland

HOME PAGE: http://www.greengrowthknowledge.org/

International Center for Climate Governance ( email )

Island of San Giorgio Maggiore 8
Venice, I-30124
Italy

HOME PAGE: http://www.iccgov.org/

Marzio Galeotti

University of Milan - Department of Environmental Science and Policy (DESP) ( email )

2 via Celoria
I-20133 Milano
Italy
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+39-2-50316486 (Fax)

HOME PAGE: http://www.unimi.it/chiedove/cv/ENG/marzio_galeotti.pdf?1531977155891

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

via Rontgen
Milan, 20123
Italy
+39-2-58362340 (Phone)

HOME PAGE: http://www.iefe.unibocconi.it

Emanuele Massetti

Georgia Institute of Technology ( email )

685 Cherry St.
Atlanta, GA 30332-0345
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

CMCC - Euro Mediterranean Centre for Climate Change

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Massimo Tavoni

Fondazione Eni Enrico Mattei (FEEM) ( email )

Corso Magenta 63
20123 Milan
Italy

Princeton University - Princeton Environmental Institute

22 Chambers Street
Princeton, NJ 08544-0708
United States

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