Soft-linking a national computable general equilibrium model (ThreeME) with a detailed energy system model (IESA-Opt)

Amirhossein Fattahi; Frédéric Reynès; Bob van der Zwaan; Jos Sijm; André Faaij

doi:10.1016/j.eneco.2023.106750

Soft-linking a national computable general equilibrium model (ThreeME) with a detailed energy system model (IESA-Opt)

Amirhossein Fattahi^*
, Frédéric Reynès
, Bob van der Zwaan
, Jos Sijm
, André Faaij

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

Top-down CGE models are used to assess the economic impacts of climate change policies. However, these models do not represent the technologies and sources of greenhouse gas emissions as detailed as bottom-up energy system models. Linking a top-down CGE model with a bottom-up energy system model assures macroeconomic consistency while accounting for a detailed representation of energy and emission flows. While there is ample literature regarding the linking process, the corresponding details and underlying assumptions are barely described in detail. The present paper describes a step-by-step soft-linking process and its underlying assumptions, using the Netherlands as a case study. This soft-linking process increases the Dutch energy demand levels in 2050 by 19.5% on average compared to assumed exogenous levels. Moreover, the GDP in 2050 reduces by 5.5% compared to the baseline economic scenario. Furthermore, we identified high energy prices as the primary cause of this GDP reduction in the soft-linking process.

Original language	English
Article number	106750
Number of pages	17
Journal	Energy Economics
Volume	123
DOIs	https://doi.org/10.1016/j.eneco.2023.106750
Publication status	Published - Jul 2023

Bibliographical note

Funding Information:
The authors wish to acknowledge the feedback and support provided by Paul Koutstaal, Jinxue Hu, Hettie Boonman, and the ESTRAC Integrated Energy System Analysis project financed by the New Energy Coalition (finance code: 656039). Moreover, the authors are grateful for the feedback provided by participants of IEW-2022 conference. The views expressed here are those of the authors alone and do not necessarily reflect the views of the project partners or the policies of the funding partners.

Publisher Copyright:
© 2023

Funding

The authors wish to acknowledge the feedback and support provided by Paul Koutstaal, Jinxue Hu, Hettie Boonman, and the ESTRAC Integrated Energy System Analysis project financed by the New Energy Coalition (finance code: 656039). Moreover, the authors are grateful for the feedback provided by participants of IEW-2022 conference. The views expressed here are those of the authors alone and do not necessarily reflect the views of the project partners or the policies of the funding partners.

Keywords

Bottom-up models
Soft-linking
Top-down models

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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1-s2.0-S0140988323002487-mainFinal published version, 6.97 MBLicence: CC BY

Cite this

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title = "Soft-linking a national computable general equilibrium model (ThreeME) with a detailed energy system model (IESA-Opt)",

abstract = "Top-down CGE models are used to assess the economic impacts of climate change policies. However, these models do not represent the technologies and sources of greenhouse gas emissions as detailed as bottom-up energy system models. Linking a top-down CGE model with a bottom-up energy system model assures macroeconomic consistency while accounting for a detailed representation of energy and emission flows. While there is ample literature regarding the linking process, the corresponding details and underlying assumptions are barely described in detail. The present paper describes a step-by-step soft-linking process and its underlying assumptions, using the Netherlands as a case study. This soft-linking process increases the Dutch energy demand levels in 2050 by 19.5\% on average compared to assumed exogenous levels. Moreover, the GDP in 2050 reduces by 5.5\% compared to the baseline economic scenario. Furthermore, we identified high energy prices as the primary cause of this GDP reduction in the soft-linking process.",

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AU - Fattahi, Amirhossein

AU - Reynès, Frédéric

AU - van der Zwaan, Bob

AU - Sijm, Jos

AU - Faaij, André

N1 - Funding Information: The authors wish to acknowledge the feedback and support provided by Paul Koutstaal, Jinxue Hu, Hettie Boonman, and the ESTRAC Integrated Energy System Analysis project financed by the New Energy Coalition (finance code: 656039). Moreover, the authors are grateful for the feedback provided by participants of IEW-2022 conference. The views expressed here are those of the authors alone and do not necessarily reflect the views of the project partners or the policies of the funding partners. Publisher Copyright: © 2023

PY - 2023/7

Y1 - 2023/7

N2 - Top-down CGE models are used to assess the economic impacts of climate change policies. However, these models do not represent the technologies and sources of greenhouse gas emissions as detailed as bottom-up energy system models. Linking a top-down CGE model with a bottom-up energy system model assures macroeconomic consistency while accounting for a detailed representation of energy and emission flows. While there is ample literature regarding the linking process, the corresponding details and underlying assumptions are barely described in detail. The present paper describes a step-by-step soft-linking process and its underlying assumptions, using the Netherlands as a case study. This soft-linking process increases the Dutch energy demand levels in 2050 by 19.5% on average compared to assumed exogenous levels. Moreover, the GDP in 2050 reduces by 5.5% compared to the baseline economic scenario. Furthermore, we identified high energy prices as the primary cause of this GDP reduction in the soft-linking process.

AB - Top-down CGE models are used to assess the economic impacts of climate change policies. However, these models do not represent the technologies and sources of greenhouse gas emissions as detailed as bottom-up energy system models. Linking a top-down CGE model with a bottom-up energy system model assures macroeconomic consistency while accounting for a detailed representation of energy and emission flows. While there is ample literature regarding the linking process, the corresponding details and underlying assumptions are barely described in detail. The present paper describes a step-by-step soft-linking process and its underlying assumptions, using the Netherlands as a case study. This soft-linking process increases the Dutch energy demand levels in 2050 by 19.5% on average compared to assumed exogenous levels. Moreover, the GDP in 2050 reduces by 5.5% compared to the baseline economic scenario. Furthermore, we identified high energy prices as the primary cause of this GDP reduction in the soft-linking process.

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JO - Energy Economics

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M1 - 106750

ER -

Soft-linking a national computable general equilibrium model (ThreeME) with a detailed energy system model (IESA-Opt)

Abstract

Bibliographical note

Funding

Keywords

UN SDGs

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