Construction of hybrid Input-Output tables for E3 CGE model calibration and consequences on energy policy analysis

“Hybrid” modelling approaches are increasingly used to bridge the historical gap between the bottom-up and top-down approaches to energy/economy/environment modelling. By nature, they require a substantial effort of harmonisation between national accounts and energy balance data. However, the methods applied for reconciling those data and their impacts on the empirical information used to calibrate CGE models are generally poorly documented, if at all, even for prominent models. Different hybridisation techniques have different impacts on key empirical features that are important for policy evaluation. After reviewing the literature on hybridisation methods, this paper proposes and details an innovative procedure for building hybrid Input-Output matrices at the country scale, and illustrates it with data for France. Compared to existing methods, this procedure includes information about energy flows, prices and quantities coming from energy statistics, without alteration, within a consistent social accounting framework. The impact of this method is illustrated in a small CGE model that does not incorporate the other modelling specificities of hybrid models. The welfare costs of a same price-induced energy policy are evaluated keeping the same behavioural structural assumptions and parameters, but with a calibration of the model on our hybrid matrices, or alternatively, on unmodified input-output data. This comparison shows the importance of describing with transparency the impacts of data hybridisation methods.