Modeling approaches to long-run integrated technological impact analysis

Analysis of the energy-economic-environmental impacts of energy policies, such as a major synthetic fuels program, requires methodologies that reflect the potential benefits and costs of proposed policy alternatives. Energy policies typically have secondary economic and environmental effects as well as direct effects on energy itself, and these must collectively be assessed to provide a complete basis for policy selection. The focus of this report is on approaches to the analysis of long-term impacts that may result from current decisions regarding energy policy. The interrelationships among the energy, economic, and environmental systems, and alternative ways of analyzing long-term impacts within an integrated framework are discussed. An application of such a framework to the assessment of a major synthetic fuels program is presented as an example. The use of idealized problem formulations is a necessary part of technology assessment, particularly in considering highly integrated policy issues, such as a synfuels policy. Nonquantifiable factors, such as equity, are not always considered in mathematical models. Model results should be viewed only as aids for decision making among policy alternatives, as they may not take into account all of the policy's implications. A decision maker must recognize the limitations to using model outputs and must use both experience and judgement in selecting policy alternatives for implementation. Use of an appropriate model structure with sufficient feedback capabilities will often provide a better overall policy assessment than a highly detailed but uncoordinated approach to the same problems

Brookhaven integrated energy/economy modeling system and its use in conservation policy analysis

The approach used at BNL to model the impact of the introduction of advanced energy technologies in response to increased energy prices has been to link econometric, process, and input-output models. The econometric model generates growth, employment, productivity, inflation, final demand, and price-determined input-output coefficients for a ten-sector interindustry model. The outputs from the six energy sectors are used to drive a national energy process model which supplies energy prices, fuel mix, and energy capital requirements to the econometric model. The four nonenergy final demands from the econometric model are disaggregated and used with the energy demands from the process model to drive a 110-sector input-output model. The nonenergy coefficients in the input-output model are fixed, but the energy coefficients are variable - reflecting the technologies chosen by the solution of the process model. Coefficients representing advanced-energy-technology production functions have been incorporated in the input-output structure. This approach is briefly described, and three applications of this set of linked models are presented: (1) reports the findings of a study of the effects of various levels of conservation on the rate of growth in GNP and other economic indicators; (2) describes an application of the linked models to an accelerated solar-technology scenario, focusing on the long-run macroeconomic impacts of increased solar utilization; and (3) currently in progress, examines the robustness of two policies (a supply and a demand policy) and their effect on the penetration of renewable technologies across a range of reference cases designed to capture several of the uncertainties faced by decision makers. 63 references

Strategic cost-benefit analysis of energy policies: detailed projections

Current US energy policy includes many programs directed toward restructuring the energy system in order to decrease US dependence on foreign supplies and to increase our reliance on plentiful and environmentally benign energy forms. However, recent events have led to renewed concern over the direction of current energy policy. This study describes three possible energy strategies and analyzes each in terms of its economic, environmental, and national security benefits and costs. Each strategy is represented by a specific policy. In the first, no additional programs or policies are initiated beyond those currently in effect or announced. The second is directed toward reducing the growth in energy demand, i.e., energy conservation. The third promotes increased domestic supply through accelerated development of synthetic and unconventional fuels. The analysis focuses on the evaluation and comparison of these strategy alternatives with respect to their energy, economic, and environmental consequences. Results indicate that conservation can substantially reduce import dependence and slow the growth of energy demand, with only a small macroeconomic cost and with substantial environmental benefits; the synfuels policy reduces imports by a smaller amount, does not reduce the growth in energy demand, involves substantial environmental costs and slows the rate of economic growth. These relationships could be different if the energy savings per unit cost for conservation are less than anticipated, or if the costs of synthetic fuels can be significantly lowered. Given these uncertainties, both conservation and RD and D support for synfuels should be included in future energy policy. However, between these policy alternatives, conservation appears to be the preferred strategy. The results of this study are presented in three reports (see also BNL--51105 and BNL--51128). 11 references, 3 figures, 61 tables

Strategic cost-benefit analysis of energy policies: comparative analysis

Current US energy policy includes many programs directed toward restructuring the energy system in order to decrease US dependence on foreign supplies and to increase our reliance on plentiful and environmentally benign energy flow. This study describes three possible energy strategies and analyzes each in terms of its economic, environmental, and national security benefits and costs. Each strategy is represented by a specific policy. In the first strategy no additional programs or policies are initiated beyond those currently in effect or announced. The second is directed toward reducing the growth in energy demand, i.e., energy conservation. The third promotes increased domestic supply through accelerated development of synthetic and unconventional fuels. The analysis focuses on the evaluation and comparison of these strategy alternatives with respect to their energy, economic, and environmental consequences. The results indicate that conservation can substantially reduce import dependence and slow the growth of energy demand, with only a small macroeconomic cost and with substantial environmental benefits; the synfuels policy reduces imports by a smaller amount, does not reduce the growth in energy demand, involves substantial environmental costs, and slows the rate of economic growth. These relationships could be different if the energy savings per unit cost for conservation are less than anticipated, or if the costs of synthetic fuels can be significantly lowered. Given these uncertainties, both conservation and RD and D support for synfuels should be included in future energy policy. However, between these policy alternatives, conservation appears to be the preferred strategy. The results of this study are presented in three reports: The Overview; The Detailed Projections; and The Comparative Analysis