IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2015.23.html
   My bibliography  Save this paper

Assessment of the Effectiveness of Global Climate Policies Using Coupled Bottom-up and Top-down Models

Author

Listed:
  • Maryse Labriet

    (Eneris Environment Energy Consultants, Spain)

  • Laurent Drouet

    (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change, Italy)

  • Marc Vielle

    (Ecole Polytechnique de Lausanne, Switzerland)

  • Richard Loulou

    (Kanlo Consultants Sàrl, France)

  • Amit Kanudia

    (Kanors Consultants, India)

  • Alain Haurie

    (Ordecsys, Switzerland)

Abstract

In order to assess climate mitigation agreements, we propose an iterative procedure linking TIAM-WORLD, a global technology-rich optimization model, and GEMINI-E3, a global general equilibrium model. The coupling methodology combines the precise representation of energy and technology choices with a coherent representation of the macro-economic impacts, especially in terms of trade effects of climate policies on energy-intensive products. In climate mitigation scenarios, drastic technology breakthroughs are required as soon as possible, especially in large emitting countries, and in all sectors of the economy. Energy-intensive industries tend to be delocalized in regions where low-carbon production is feasible and cheap, or in regions without emission cap. However, emission leakage remains small, mainly due to global lower oil demand, and energy exporting countries are extremely penalized given lower energy exports. Emission reduction at least in the power sector and in energy-intensive industries of developing countries must be considered to reach the 2°C target.

Suggested Citation

  • Maryse Labriet & Laurent Drouet & Marc Vielle & Richard Loulou & Amit Kanudia & Alain Haurie, 2015. "Assessment of the Effectiveness of Global Climate Policies Using Coupled Bottom-up and Top-down Models," Working Papers 2015.23, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2015.23
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2015-023.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Valentina Bosetti & David G. Victor, 2011. "Politics and Economics of Second-Best Regulation of Greenhouse Gases: The Importance of Regulatory Credibility," The Energy Journal, , vol. 32(1), pages 1-24, January.
    2. Kenneth C. Hoffman & Dale W. Jorgenson, 1977. "Economic and Technological Models for Evaluation of Energy Policy," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 444-466, Autumn.
    3. Alain Bernard & Marc Vielle, 2008. "GEMINI-E3, a general equilibrium model of international–national interactions between economy, energy and the environment," Computational Management Science, Springer, vol. 5(3), pages 173-206, May.
    4. Wing, Ian Sue, 2006. "The synthesis of bottom-up and top-down approaches to climate policy modeling: Electric power technologies and the cost of limiting US CO2 emissions," Energy Policy, Elsevier, vol. 34(18), pages 3847-3869, December.
    5. van Vuuren, Detlef P. & Weyant, John & de la Chesnaye, Francisco, 2006. "Multi-gas scenarios to stabilize radiative forcing," Energy Economics, Elsevier, vol. 28(1), pages 102-120, January.
    6. Patricia Fortes & Sofia Simões & Júlia Seixas & Denise Van Regemorter & Francisco Ferreira, 2013. "Top-down and bottom-up modelling to support low-carbon scenarios: climate policy implications," Climate Policy, Taylor & Francis Journals, vol. 13(3), pages 285-304, May.
    7. Richard Loulou & Maryse Labriet, 2008. "ETSAP-TIAM: the TIMES integrated assessment model Part I: Model structure," Computational Management Science, Springer, vol. 5(1), pages 7-40, February.
    8. Bohringer, Christoph & Rutherford, Thomas F., 2008. "Combining bottom-up and top-down," Energy Economics, Elsevier, vol. 30(2), pages 574-596, March.
    9. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-765, September.
    10. Böhringer, Christoph & Rutherford, Thomos F., 2009. "Integrated assessment of energy policies: Decomposing top-down and bottom-up," Journal of Economic Dynamics and Control, Elsevier, vol. 33(9), pages 1648-1661, September.
    11. 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.
    12. Lanz, Bruno & Rausch, Sebastian, 2011. "General equilibrium, electricity generation technologies and the cost of carbon abatement: A structural sensitivity analysis," Energy Economics, Elsevier, vol. 33(5), pages 1035-1047, September.
    13. Labriet, Maryse & Kanudia, Amit & Loulou, Richard, 2012. "Climate mitigation under an uncertain technology future: A TIAM-World analysis," Energy Economics, Elsevier, vol. 34(S3), pages 366-377.
    14. 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.
    15. Richard Loulou, 2008. "ETSAP-TIAM: the TIMES integrated assessment model. part II: mathematical formulation," Computational Management Science, Springer, vol. 5(1), pages 41-66, February.
    16. Alan Manne & Richard Richels, 1992. "Buying Greenhouse Insurance: The Economic Costs of CO2 Emission Limits," MIT Press Books, The MIT Press, edition 1, volume 1, number 026213280x, December.
    17. Messner, Sabine & Schrattenholzer, Leo, 2000. "MESSAGE–MACRO: linking an energy supply model with a macroeconomic module and solving it iteratively," Energy, Elsevier, vol. 25(3), pages 267-282.
    18. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Clora, Francesco & Yu, Wusheng, 2022. "GHG emissions, trade balance, and carbon leakage: Insights from modeling thirty-one European decarbonization pathways towards 2050," Energy Economics, Elsevier, vol. 113(C).
    2. Postic, Sebastien & Selosse, Sandrine & Maïzi, Nadia, 2017. "Energy contribution to Latin American INDCs: Analyzing sub-regional trends with a TIMES model," Energy Policy, Elsevier, vol. 101(C), pages 170-184.
    3. Christian Calvillo, 2023. "The Impacts of Energy Efficiency Modelling in Policy Making," Energies, MDPI, vol. 16(4), pages 1-23, February.
    4. Soummane, Salaheddine & Ghersi, Frédéric & Lefèvre, Julien, 2019. "Macroeconomic pathways of the Saudi economy: The challenge of global mitigation action versus the opportunity of national energy reforms," Energy Policy, Elsevier, vol. 130(C), pages 263-282.
    5. Pisciella, Paolo & van Beesten, E. Ruben & Tomasgard, Asgeir, 2023. "Efficient coordination of top-down and bottom-up models for energy system design: An algorithmic approach," Energy, Elsevier, vol. 284(C).
    6. Ajay Gambhir & Isabela Butnar & Pei-Hao Li & Pete Smith & Neil Strachan, 2019. "A Review of Criticisms of Integrated Assessment Models and Proposed Approaches to Address These, through the Lens of BECCS," Energies, MDPI, vol. 12(9), pages 1-21, May.
    7. Diamantis Koutsandreas & Evangelos Spiliotis & Haris Doukas & John Psarras, 2021. "What Is the Macroeconomic Impact of Higher Decarbonization Speeds? The Case of Greece," Energies, MDPI, vol. 14(8), pages 1-19, April.
    8. Xin Su & Frédéric Ghersi & Fei Teng & Gaëlle Treut & Meicong Liang, 2022. "The economic impact of a deep decarbonisation pathway for China: a hybrid model analysis through bottom-up and top-down linking," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(1), pages 1-37, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dai, Hancheng & Mischke, Peggy & Xie, Xuxuan & Xie, Yang & Masui, Toshihiko, 2016. "Closing the gap? Top-down versus bottom-up projections of China’s regional energy use and CO2 emissions," Applied Energy, Elsevier, vol. 162(C), pages 1355-1373.
    2. Fortes, Patrícia & Pereira, Rui & Pereira, Alfredo & Seixas, Júlia, 2014. "Integrated technological-economic modeling platform for energy and climate policy analysis," Energy, Elsevier, vol. 73(C), pages 716-730.
    3. Lanz, Bruno & Rausch, Sebastian, 2011. "General equilibrium, electricity generation technologies and the cost of carbon abatement: A structural sensitivity analysis," Energy Economics, Elsevier, vol. 33(5), pages 1035-1047, September.
    4. André Sceia & Juan-Carlos Altamirano-Cabrera & Marc Vielle & Nicolas Weidmann, 2012. "Assessment of Acceptable Swiss post-2012 Climate Policies," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 148(II), pages 347-380, June.
    5. Helgesen, Per Ivar & Tomasgard, Asgeir, 2018. "From linking to integration of energy system models and computational general equilibrium models – Effects on equilibria and convergence," Energy, Elsevier, vol. 159(C), pages 1218-1233.
    6. Halkos, George, 2014. "The Economics of Climate Change Policy: Critical review and future policy directions," MPRA Paper 56841, University Library of Munich, Germany.
    7. Milad Maralani & Milad Maralani & Basil Sharp & Golbon Zakeri, 2016. "The Potential Impact of Industrial Energy Savings on The New Zealand Economy," EcoMod2016 9308, EcoMod.
    8. Laha, Priyanka & Chakraborty, Basab, 2017. "Energy model – A tool for preventing energy dysfunction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 95-114.
    9. Pisciella, Paolo & van Beesten, E. Ruben & Tomasgard, Asgeir, 2023. "Efficient coordination of top-down and bottom-up models for energy system design: An algorithmic approach," Energy, Elsevier, vol. 284(C).
    10. Sebastian Rausch & Valerie J. Karplus, 2014. "Markets versus Regulation: The Efficiency and Distributional Impacts of U.S. Climate Policy Proposals," The Energy Journal, , vol. 35(1_suppl), pages 199-228, June.
    11. Andersen, Kristoffer S. & Termansen, Lars B. & Gargiulo, Maurizio & Ó Gallachóirc, Brian P., 2019. "Bridging the gap using energy services: Demonstrating a novel framework for soft linking top-down and bottom-up models," Energy, Elsevier, vol. 169(C), pages 277-293.
    12. Ruth Delzeit & Robert Beach & Ruben Bibas & Wolfgang Britz & Jean Chateau & Florian Freund & Julien Lefevre & Franziska Schuenemann & Timothy Sulser & Hugo Valin & Bas van Ruijven & Matthias Weitzel &, 2020. "Linking Global CGE Models with Sectoral Models to Generate Baseline Scenarios: Approaches, Challenges, and Opportunities," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 162-195, June.
    13. Huppmann, Daniel & Egging, Ruud, 2014. "Market power, fuel substitution and infrastructure – A large-scale equilibrium model of global energy markets," Energy, Elsevier, vol. 75(C), pages 483-500.
    14. Maryse Labriet & Santosh Joshi & Marc Vielle & Philip Holden & Neil Edwards & Amit Kanudia & Richard Loulou & Frédéric Babonneau, 2015. "Worldwide impacts of climate change on energy for heating and cooling," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1111-1136, October.
    15. Tang, Bao-Jun & Wang, Xiang-Yu & Wei, Yi-Ming, 2019. "Quantities versus prices for best social welfare in carbon reduction: A literature review," Applied Energy, Elsevier, vol. 233, pages 554-564.
    16. Lee, Hwarang & Kang, Sung Won & Koo, Yoonmo, 2020. "A hybrid energy system model to evaluate the impact of climate policy on the manufacturing sector: Adoption of energy-efficient technologies and rebound effects," Energy, Elsevier, vol. 212(C).
    17. Rausch, Sebastian & Mowers, Matthew, 2014. "Distributional and efficiency impacts of clean and renewable energy standards for electricity," Resource and Energy Economics, Elsevier, vol. 36(2), pages 556-585.
    18. Ruth Delzeit & Roberto Beach & Ruben Bibas & Wolfgang Britz & Jean Chateau & Florian Freund & Julien Lefevre & Franziska Schuenemann & Timothy Sulser & Hugo Valin & Bas van Ruijven & Matthias Weitzel , 2020. "Linking global CGE models with sectoral models to generate baseline scenarios: Approaches, opportunities and pitfalls," Post-Print hal-03128285, HAL.
    19. Stefan Nabernegg & Birgit Bednar-Friedl & Fabian Wagner & Thomas Schinko & Janusz Cofala & Yadira Mori Clement, 2017. "The Deployment of Low Carbon Technologies in Energy Intensive Industries: A Macroeconomic Analysis for Europe, China and India," Energies, MDPI, vol. 10(3), pages 1-26, March.
    20. Eskeland, Gunnar S. & Rive, Nathan A. & Mideksa, Torben K., 2012. "Europe’s climate goals and the electricity sector," Energy Policy, Elsevier, vol. 41(C), pages 200-211.

    More about this item

    Keywords

    Climate Policies; Energy; Techno-economic modelling; Macro-economic Modelling; World;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2015.23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.