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A Regional Economy-Energy-Transport Model of the EU for Assessing Decarbonization in Transport

Author

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  • Ioannis Charalampidis

    (E3MLab, School of Electrical and Computer Engineering, National Technical University of Athens, 15773 Athens, Greece)

  • Panagiotis Karkatsoulis

    (E3MLab, School of Electrical and Computer Engineering, National Technical University of Athens, 15773 Athens, Greece)

  • Pantelis Capros

    (E3MLab, School of Electrical and Computer Engineering, National Technical University of Athens, 15773 Athens, Greece)

Abstract

The EU decarbonization strategy foresees deep cuts in CO 2 in the transport sector. Investment in infrastructure, manufacturing of new technology vehicles and production of alternative fuels induce macroeconomic changes in activity and employment for both national and regional economies. The objective of the paper is to present a newly built macroeconomic-regional model (GEM-E3-R general equilibrium model for economy, energy and environment for regions) for assessing impacts of transport sector restructuring on regional economies of the entire EU, segmented following NUTS-3 (nomenclature of territorial units of statistics). The model combines general economic equilibrium theory with location choice and New Economic Geography and implements a dynamic, fully endogenous agglomeration-dispersion mechanism for people and industries coupled with a gravity model for bilateral interregional flows. A novelty of the model is a two-layers structure: (i) the country-wide layer formulated as a global multi-sector, multi-country and multi-period computable general equilibrium (CGE) model; and (ii) the regional economy layer, which simulates impacts on regional economies, while considering country-wide economic trends as boundary conditions. The paper presents a use of the model in the assessment of regional economic effects of electrification of car mobility in Europe and wide use of domestically produced advanced biofuels.

Suggested Citation

  • Ioannis Charalampidis & Panagiotis Karkatsoulis & Pantelis Capros, 2019. "A Regional Economy-Energy-Transport Model of the EU for Assessing Decarbonization in Transport," Energies, MDPI, vol. 12(16), pages 1-27, August.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:16:p:3128-:d:257727
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