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Integrated technological-economic modeling platform for energy and climate policy analysis

  • Patrícia Fortes

    ()

    (CENSE, Departamento de Ciências e Engenharia do Ambiente, Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa)

  • Alfredo Marvão Pereira

    ()

    (Department of Economics, The College of William and Mary)

  • Rui M. Pereira

    ()

    (Department of Economics, The College of William and Mary)

  • Júlia Seixas

    (CENSE, Departamento de Ciências e Engenharia do Ambiente, Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa)

Computable general equilibrium (CGE) and bottom-up models each have unique strengths and weakness in evaluating energy and climate policies. This paper describes the development of an integrated technological, economic modelling platform (HYBTEP), built through the soft-link between the bottomup TIMES and the CGE GEM-E3 models. HYBTEP combines cost minimizing energy technology choices with macroeconomic responses, which is essential for energy-climate policy assessment. HYBTEP advances on other hybrid tools by assuming ‘full-form’ models, integrating detailed and extensive technology data with disaggregated economic structure, and ‘full-link’, i.e., covering all economic sectors. Using Portugal as a case study, we examine three scenarios: i) the current energyclimate policy, ii) a CO2 tax, and iii) renewable energy subsidy, with the objective of assessing the advantages of HYBTEP vis-à-vis bottom-up approach. Results show that the economic framework in HYBTEP partially offsets the increase or decrease in energy costs from the policy scenarios, while TIMES sets a wide range of results, dependent of energy services-price elasticities. HYBTEP allows the computation of the economic impacts of policies while considers technological detail. Moreover, the hybrid platform increases the transparency of policy analysis by making explicit the mechanisms through which energy demand evolves, resulting in high confidence for decision-making.

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File URL: http://economics.wm.edu/wp/cwm_wp148.pdf
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Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 148.

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Date of creation: 25 Jan 2014
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Handle: RePEc:cwm:wpaper:148
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  20. Turton, Hal, 2008. "ECLIPSE: An integrated energy-economy model for climate policy and scenario analysis," Energy, Elsevier, vol. 33(12), pages 1754-1769.
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