GTAP-E: An Energy-Environmental Version of the GTAP Model with Emission Trading
AbstractEnergy is an important commodity in many economic activities. Its usage affects the environment via CO2 emissions and the Greenhouse Effect. Modeling the energy-economy-environment-trade linkages is an important objective in applied economic policy analysis. Previously, however, the modeling of these linkages in GTAP has been incomplete. This is because energy substitution, a key factor in this chain of linkages, is absent from the standard model specification. This technical paper remedies this deficiency by incorporating energy substitution into the standard GTAP model. It begins by first reviewing some of the existing approaches to this problem in contemporary CGE models. It then suggests an approach for GTAP which incorporates some of these desirable features of energy substitution. The approach is implemented as an extended version of the GTAP model called GTAP-E. In addition, GTAP-E incorporates carbon emissions from the combustion of fossil fuels and this revised version of GTAP-E provides for a mechanism to trade these emissions internationally as well as domestically. The policy relevance of GTAP-E in the context of the existing debate about climate change is illustrated by some illustrative simulations of the implementation the European emissions trading scheme in 2005. It is hoped that the proposed model will be used by individuals in the GTAP network who may not be themselves energy modelers, but who require a better representation of the energy-economy-environmental linkages than is currently offered in the standard GTAP model.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 668.
Length: 71 p.
Date of creation: 2007
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-03-10 (Agricultural Economics)
- NEP-ALL-2007-03-10 (All new papers)
- NEP-ENE-2007-03-10 (Energy Economics)
- NEP-ENV-2007-03-10 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Truong, Truong P, 1985. "Inter-fuel and Inter-factor Substitution in NSW Manufacturing Industry," The Economic Record, The Economic Society of Australia, vol. 61(174), pages 644-53, September.
- Perroni, C. & Rutherford, T., 1991.
"Regular Flexibility of Nested CES Functions,"
91145, Wilfrid Laurier University, Department of Economics.
- Wilson, Deborah & Swisher, Joel, 1993. "Exploring the gap : Top-down versus bottom-up analyses of the cost of mitigating global warming," Energy Policy, Elsevier, vol. 21(3), pages 249-263, March.
- Thure Traber & Claudia Kemfert, 2007. "Impacts of the German Support for Renewable Energy on Electricity Prices, Emissions and Profits: An Analysis Based on a European Electricity Market Model," Discussion Papers of DIW Berlin 712, DIW Berlin, German Institute for Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If references are entirely missing, you can add them using this form.