GTAP Resources: Resource Display
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"A Coupled Bottom-Up / Top-Down Model for GHG Abatement Scenarios in the Swiss Housing Sector" by Drouet, Laurent, Alain Haurie, Maryse Labriet, Philippe Thalmann, Marc Vielle and Laurent Viguier Abstract This paper reports on the coordinated development of a top-down macro-economic model and a bottom-up technology-energy-environment model to assess long term climate policies in Switzerland. concerned by the various dimensions of climate studies. We briefly present (i) a computable general equilibrium model (CGEM) which places Switzerland in a world model called GEMINI-E3 and (ii) a bottom-up energy-technology-environment model (ETEM) inspired from the MARKAL modelling framework. We then show how one can couple the two models to obtain a hybrid top-down/bottom-up model producing a macro-economic scenario with detailed technology description for the residential sector in Switzerland. In the literature the relations between the economy, the energy sector and the environment are described in two broad classes of models called top-down and bottom-up respectively. The first category approaches the problem from a description of the macro-economic relations in the region under consideration, whereas the bottom-up models propose a technology rich description of the energy system and place the emphasis on the correct description of energy options and their cost structure. These two categories of models are complementary, the former capturing a larger set of economic interactions (i.e. inter-industrial relations and macro-economic feedbacks) without representing explicitly energy technology options and the latter representing well the details of the energy sector and the technology ranking procedures in a world characterized by technological innovation. Bottom-up models are used to compute partial economic equilibria in the energy sector under different constraints on pollutant or GHG emissions. They usually assume perfect foresight and produce optimized technology investment policies over a planning horizon of several decades typically 45 years for MARKAL models. These models are driven by energy service demands that are either exogenously defined or dependent on their own prices supposed to be indicated by the long term marginal cost of demand constraints, with exogenously defined price-elasticities. The optimization over a long time horizon coupled with a rather limited economic feedback induced by changes in relative prices makes these models more prescriptive than predictive of what could really happen. On their side, top-down models tend to neglect the description of energy and technology options, in particular the possible introduction of new options. Because they are technology-poor they tend to overemphasize the economic adjustments and overlook the possible technology changes that will be induced by the changes in relative prices. Because of this complementarity it appears promising to go beyond this taxonomy of economy-energy-environment models. Already, a number of existing models are hybrid, providing simultaneously some details on the structure of the economic and technological sectors . Different approaches have been used: (i) Coupling optimal growth models with energy system models: ETA-MACRO and MARKAL-MACRO are examples of a coupling of a bottom-up MARKAL model with an optimal economic growth model à la Ramsey which determines through inter-temporal optimization the optimal path of capital accumulation and demand for energy services, under specified emissions reduction. (ii) Coupling input-output economic models with energy system models: In this approach the economy is described by a Leontieff model of interindustry exchange; the energy sector is detailed as a linear production system. (iii) Coupling a CGEM with an ETEM: This is the most attractive type of coupling, since a CGEM provides a more complete representation of the different economic feedbacks and permits a correct treatment of the different taxes and market imperfections in the economy under consideration. The present paper is an attempt to implement the third type of coupling with a focus on the residential sector in the Swiss economy. The paper is organized as follows: in 1 we briefly recall Swiss climate policy and we show why the focus on the residential sector is justified. In section 2 we describe the GEMINI-E3 implementation for Switzerland. In section 3 we describe the ETEM-SWI development. In section 4 we describe the coupling of GEMINI-E3 and the residential sector in ETEM-SWI. In section 5 the scenarios obtained with the CGEM and the ETEM run in a stand-alone fashion are compared and the gain in insight obtained through the coupling is assessed. Section 6 concludes and proposes further developments. |
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Last Modified: 9/15/2023 2:05:45 PM
