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Promoting Renewable Energy in Europe: A Hybrid Computable General Equilibrium Approach

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  • Christoph Böhringer
  • Andreas Löschel

Abstract

We illustrate the use of a large-scale computable general equilibrium model to investigate the economic and environmental effects of renewable energy promotion within the European Union. Our hybrid model incorporates the technological explicitness of bottom-up energy system models for the electricity sector while production possibilities in other sectors are described at an aggregate level through top-down constant-elasticities-of-substitution (transformation) functions. The discrete activity analysis of technology options within conventional top-down computable general equilibrium models is possible when adopting the so-called mixed complementarity problem approach - a flexible mathematical representation of market equilibrium conditions which accommodates weak inequalities and complementary slackness.

Suggested Citation

  • Christoph Böhringer & Andreas Löschel, 2006. "Promoting Renewable Energy in Europe: A Hybrid Computable General Equilibrium Approach," The Energy Journal, , vol. 27(2_suppl), pages 135-150, June.
    • Handle: RePEc:sae:enejou:v:27:y:2006:i:2_suppl:p:135-150
    DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI2-7
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    References listed on IDEAS

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    1. McFarland, J. R. & Reilly, J. M. & Herzog, H. J., 2004. "Representing energy technologies in top-down economic models using bottom-up information," Energy Economics, Elsevier, vol. 26(4), pages 685-707, July.
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    Cited by:

    1. Alina Yakymchuk & Małgorzata Agnieszka Rataj, 2025. "Economic Analysis of Fossil CO 2 Emissions: A European Perspective on Sustainable Development," Energies, MDPI, vol. 18(8), pages 1-20, April.

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