GEM-E3 Model Documentation

The computable general equilibrium model GEM-E3 has been used in a large set of climate policy applications supporting Commission policy proposals during the last decade, as well as in other environmental and economic policy areas. It can be considered a multi-purpose macroeconomic model, designed to estimate the effects of sector-specific policies on the economy as a whole. The main purpose of this publication is to provide extensive documentation of the model's equations and its underlying databases, in order to offer to the broader audience an accurate description of the model characteristics.JRC.J.1-Economics of Climate Change, Energy and Transpor

Narrative-driven alternative roads to achieve mid-century CO2 net neutrality in Europe

The tightened climate mitigation targets of the EU green deal raise an important question: Which strategy should be used to achieve carbon emissions net neutrality? This study explores stakeholder-designed narratives of the future energy system development within the deep decarbonization context. European carbon net-neutrality goals are put under test in a model comparison exercise using state of the art Energy-Environment-Economy (E3) models: ETM-UCL, PRIMES and REMIND. Results show that while achieving the transition to carbon neutrality by mid-century is feasible under quite different future energy systems, some robust commonalities emerge. Electrification of end use sectors combined with large-scale expansion of renewable energy is a no-regret decision for all strategies; Carbon Dioxide Removal (CDR) plays an important role for achieving net-neutral targets under all scenarios, but is most relevant when demand-side changes are limited; hydrogen and synthetic fuels can be a relevant mitigation option for mid-century mitigation in hard-to-abate sectors; energy efficiency can reduce the supply system strain. Finally, high carbon prices (300-900€/tCO2) are needed under all strategies in order to achieve carbon net neutrality in 2050

Introduction to the AMPERE model intercomparison studies on the economics of climate stabilization

[No abstract available

Climate policy and ancillary benefits : a survey and integration into the modelling of international negotiations on climate change

Currently informal and formal international negotiations on climate change take place in an intensive way since the Kyoto Protocol expires already in 2012. A post-Kyoto regulation to combat global warming is not yet stipulated. Due to rapidly increasing greenhouse gas emission levels, industrialized countries urge major polluters from the developing world like China and India to participate in a future agreement. Whether these developing countries will do so, depends on the prevailing incentives to participate in international climate protection efforts. This paper identifies ancillary benefits of climate policy to provide important incentives to attend a new international protocol and to positively affect the likelihood of accomplishing a post-Kyoto agreement which includes commitments of developing countries

Applying Bayesian model averaging for uncertainty estimation of input data in energy modelling

Background Energy scenarios that are used for policy advice have ecological and social impact on society. Policy measures that are based on modelling exercises may lead to far reaching financial and ecological consequences. The purpose of this study is to raise awareness that energy modelling results are accompanied with uncertainties that should be addressed explicitly. Methods With view to existing approaches of uncertainty assessment in energy economics and climate science, relevant requirements for an uncertainty assessment are defined. An uncertainty assessment should be explicit, independent of the assessor’s expertise, applicable to different models, including subjective quantitative and statistical quantitative aspects, intuitively understandable and be reproducible. Bayesian model averaging for input variables of energy models is discussed as method that satisfies these requirements. A definition of uncertainty based on posterior model probabilities of input variables to energy models is presented. Results The main findings are that (1) expert elicitation as predominant assessment method does not satisfy all requirements, (2) Bayesian model averaging for input variable modelling meets the requirements and allows evaluating a vast amount of potentially relevant influences on input variables and (3) posterior model probabilities of input variable models can be translated in uncertainty associated with the input variable. Conclusions An uncertainty assessment of energy scenarios is relevant if policy measures are (partially) based on modelling exercises. Potential implications of these findings include that energy scenarios could be associated with uncertainty that is presently neither assessed explicitly nor communicated adequately

Technological Change in Economic Models of Environmental Policy: A Survey

This paper provides an overview of the treatment of technological change in economic models of environmental policy. Numerous economic modeling studies have confirmed the sensitivity of mid- and long-run climate change mitigation cost and benefit projections to assumptions about technology costs. In general, technical progress is considered to be a noneconomic, exogenous variable in global climate change modeling. However, there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous, induced by needs and pressures. Hence, some environmenteconomy models treat technological change as endogenous, responding to socio-economic variables. Three main elements in models of technological innovation are: (i) corporate investment in research and development, (ii) spillovers from R&D, and (iii) technology learning, especially learning-by-doing. The incorporation of induced technological change in different types of environmental-economic models tends to reduce the costs of environmental policy, accelerates abatement and may lead to positive spillover and negative leakage

Impure Public Goods and Technological Interdependencies

Impure public goods represent an important group of goods. Almost every public good exerts not only effects which are public to all but also effects which are private to the producer of this good. What is often omitted in the analysis of impure public goods is the fact that – regularly – these private effects can also be generated independently of the public good. In our analysis we focus on the effects alternative technologies – independently generating the private effects of the public good – may have on the provision of impure public goods. After the investigation in an analytical impure public good model, we numerically simulate the effects of alternative technologies in a parameterized model for climate policy in Germany

Locked into Copenhagen pledges - Implications of short-term emission targets for the cost and feasibility of long-term climate goals

This paper provides an overview of the AMPERE modeling comparison project with focus on the implications of near-term policies for the costs and attainability of long-term climate objectives. Nine modeling teams participated in the project to explore the consequences of global emissions following the proposed policy stringency of the national pledges from the Copenhagen Accord and Cancún Agreements to 2030. Specific features compared to earlier assessments are the explicit consideration of near-term 2030 emission targets as well as the systematic sensitivity analysis for the availability and potential of mitigation technologies. Our estimates show that a 2030 mitigation effort comparable to the pledges would result in a further “lock-in” of the energy system into fossil fuels and thus impede the required energy transformation to reach low greenhouse-gas stabilization levels (450 ppm CO2e). Major implications include significant increases in mitigation costs, increased risk that low stabilization targets become unattainable, and reduced chances of staying below the proposed temperature change target of 2 °C in case of overshoot. With respect to technologies, we find that following the pledge pathways to 2030 would narrow policy choices, and increases the risks that some currently optional technologies, such as carbon capture and storage (CCS) or the large-scale deployment of bioenergy, will become “a must” by 2030