Alternative policy impacts on US GHG emissions and energy security: A hybrid modeling approach
This study addresses the possible impacts of energy and climate policies, namely corporate average fleet efficiency (CAFE) standard, renewable fuel standard (RFS) and clean energy standard (CES), and an economy wide equivalent carbon tax on GHG emissions in the US to the year 2045. Bottom–up and top–down modeling approaches find widespread use in energy economic modeling and policy analysis, in which they differ mainly with respect to the emphasis placed on technology of the energy system and/or the comprehensiveness of endogenous market adjustments. For this study, we use a hybrid energy modeling approach, MARKAL–Macro, that combines the characteristics of two divergent approaches, in order to investigate and quantify the cost of climate policies for the US and an equivalent carbon tax. The approach incorporates Macro-economic feedbacks through a single sector neoclassical growth model while maintaining sectoral and technological detail of the bottom–up optimization framework with endogenous aggregated energy demand. Our analysis is done for two important objectives of the US energy policy: GHG reduction and increased energy security. Our results suggest that the emission tax achieves results quite similar to the CES policy but very different results in the transportation sector. The CAFE standard and RFS are more expensive than a carbon tax for emission reductions. However, the CAFE standard and RFS are much more efficient at achieving crude oil import reductions. The GDP losses are 2.0% and 1.2% relative to the base case for the policy case and carbon tax. That difference may be perceived as being small given the increased energy security gained from the CAFE and RFS policy measures and the uncertainty inherent in this type of analysis.
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.:
- Schafer, Andreas & Jacoby, Henry D., 2005. "Technology detail in a multisector CGE model: transport under climate policy," Energy Economics, Elsevier, vol. 27(1), pages 1-24, January.
- Unger, Thomas & Ahlgren, Erik O., 2005. "Impacts of a common green certificate market on electricity and CO2-emission markets in the Nordic countries," Energy Policy, Elsevier, vol. 33(16), pages 2152-2163, November.
- Ko, Fu-Kuang & Huang, Chang-Bin & Tseng, Pei-Ying & Lin, Chung-Han & Zheng, Bo-Yan & Chiu, Hsiu-Mei, 2010. "Long-term CO2 emissions reduction target and scenarios of power sector in Taiwan," Energy Policy, Elsevier, vol. 38(1), pages 288-300, January.
- Chen, Wenying & Wu, Zongxin & He, Jiankun & Gao, Pengfei & Xu, Shaofeng, 2007. "Carbon emission control strategies for China: A comparative study with partial and general equilibrium versions of the China MARKAL model," Energy, Elsevier, vol. 32(1), pages 59-72.
- Kanudia, Amit & Loulou, Richard, 1998. "Robust responses to climate change via stochastic MARKAL: The case of Quebec," European Journal of Operational Research, Elsevier, vol. 106(1), pages 15-30, April.
- Rivers, Nic & Jaccard, Mark, 2006. "Useful models for simulating policies to induce technological change," Energy Policy, Elsevier, vol. 34(15), pages 2038-2047, October.
- Shrestha, Ram M. & Shakya, Shree Raj, 2012. "Benefits of low carbon development in a developing country: Case of Nepal," Energy Economics, Elsevier, vol. 34(S3), pages S503-S512.
- Sarica, Kemal & Tyner, Wallace E., 2013. "Analysis of US renewable fuels policies using a modified MARKAL model," Renewable Energy, Elsevier, vol. 50(C), pages 701-709.
- Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
- Chris Bataille, Mark Jaccard, John Nyboer and Nic Rivers, 2006. "Towards General Equilibrium in a Technology-Rich Model with Empirically Estimated Behavioral Parameters," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 93-112.
- Andreas Schafer and Henry D. Jacoby, 2006. "Experiments with a Hybrid CGE-MARKAL Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 171-177.
- Hu, Ming-Che & Hobbs, Benjamin F., 2010. "Analysis of multi-pollutant policies for the U.S. power sector under technology and policy uncertainty using MARKAL," Energy, Elsevier, vol. 35(12), pages 5430-5442.
- Laitner, J. A. & DeCanio, S. J. & Koomey, J. G. & Sanstad, A. H., 2003. "Room for improvement: increasing the value of energy modeling for policy analysis," Utilities Policy, Elsevier, vol. 11(2), pages 87-94, June.
- Koopmans, Carl C. & te Velde, Dirk Willem, 2001. "Bridging the energy efficiency gap: using bottom-up information in a top-down energy demand model," Energy Economics, Elsevier, vol. 23(1), pages 57-75, January.
- Frei, Christoph W. & Haldi, Pierre-Andre & Sarlos, Gerard, 2003. "Dynamic formulation of a top-down and bottom-up merging energy policy model," Energy Policy, Elsevier, vol. 31(10), pages 1017-1031, August.
- Chen, Wenying, 2005. "The costs of mitigating carbon emissions in China: findings from China MARKAL-MACRO modeling," Energy Policy, Elsevier, vol. 33(7), pages 885-896, May.
- Valentina Bosetti & Carlo Carraro & Marzio Galeotti & Emanuele Massetti & Massimo Tavoni, 2006. "WITCH. A World Induced Technical Change Hybrid Model," Working Papers 2006_46, Department of Economics, University of Venice "Ca' Foscari".
- Rutherford, Thomas F. & Böhringer, Christoph, 2006. "Combining Top-Down and Bottom-up in Energy Policy Analysis: A Decomposition Approach," ZEW Discussion Papers 06-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Taheripour, Farzad & Tyner, Wallace E., 2011. "Global Land Use Changes and Consequent CO2 Emissions due to US Cellulosic Biofuel Program: A Preliminary Analysis," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103559, Agricultural and Applied Economics Association.
- Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
- Schafer, Andreas & Jacoby, Henry D., 2006. "Vehicle technology under CO2 constraint: a general equilibrium analysis," Energy Policy, Elsevier, vol. 34(9), pages 975-985, June.
- Contaldi, Mario & Gracceva, Francesco & Tosato, Giancarlo, 2007. "Evaluation of green-certificates policies using the MARKAL-MACRO-Italy model," Energy Policy, Elsevier, vol. 35(2), pages 797-808, February.
- Strachan, Neil & Kannan, Ramachandran, 2008. "Hybrid modelling of long-term carbon reduction scenarios for the UK," Energy Economics, Elsevier, vol. 30(6), pages 2947-2963, November.
- Strachan, Neil & Pye, Steve & Kannan, Ramachandran, 2009. "The iterative contribution and relevance of modelling to UK energy policy," Energy Policy, Elsevier, vol. 37(3), pages 850-860, March.
- Mei Yuan, Sugandha Tuladhar, Paul Bernstein, and Lee Lane, 2011. "Policy Effectiveness in Energy Conservation and Emission Reduction," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:40-50. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.