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Downscaling heterogeneous household outcomes in dynamic CGE models for energy-economic analysis

Author

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  • Melnikov, Nikolai B.
  • O’Neill, Brian C.
  • Dalton, Michael G.
  • van Ruijven, Bas J.

Abstract

Downscaling methods for dynamic computable general equilibrium models are developed and analyzed. The methods produce outcomes for a variety of different household types by downscaling the aggregate quantities from an economic growth model with a representative household. This approach uses household survey data and long-term population projections for different household types to compare the performance of the downscaling methods vs. a general equilibrium model with multiple household groups under a variety of conditions, including demographic change, technological change, and a carbon tax. Both recursive-dynamic and forward-looking downscaling methods produce results that approximate well a multiple household model run. The recursive-dynamic downscaling method is applied to an illustrative example estimating impacts of a carbon tax on aggregate CO2 emissions and the energy demand of different household groups for a middle of the road development scenario.

Suggested Citation

  • Melnikov, Nikolai B. & O’Neill, Brian C. & Dalton, Michael G. & van Ruijven, Bas J., 2017. "Downscaling heterogeneous household outcomes in dynamic CGE models for energy-economic analysis," Energy Economics, Elsevier, vol. 65(C), pages 87-97.
    • Handle: RePEc:eee:eneeco:v:65:y:2017:i:c:p:87-97
    DOI: 10.1016/j.eneco.2017.04.023
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    4. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
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    More about this item

    Keywords

    Computable general equilibrium; Economic growth; Demographic heterogeneity; Energy demand; Carbon tax;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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