Modelling developments linked to the implementation of Nationally Determined Contributions (NDCs)
date: 18/12/2019
- Another research development from COPPE/UFRJ is the transformation of the hybrid CGE IMACLIM-BR model into a dynamic model and improving its connections to bottom-up models. The objective of the project is to test different scenarios to reach Brazil’s NDC - with and without carbon pricing. The researchers are currently running the scenarios and results are expected to be published in the first semester of 2020.
- Cambridge Econometrics has developed a new empirical tool, called the FRAMES modelling framework to carry out energy-economy policy analysis in developing countries. The framework is based on the underlying structure of the E3ME model but has been simplified and reprogrammed to operate with a flexible number of sectors - i.e. to match national data sets. Key characteristics for FRAMES are similar to E3ME - it is based on post-Keynesian macroeconomic theory and does not include assumptions about optimisation. In the model, the economy is dynamic and operates out of equilibrium. There is spare capacity in labour and capital markets (e.g. unemployed workers), meaning that double dividend results are possible. Developing countries (including Least Developed Countries) typically have limited data available to inform their policies and currently have few options for assessing their climate and energy policies, including the ones informing NDC commitments. FRAMES has been developed to meet the current gap in capability - it can be used for any geographical region which has basic data. A first example of FRAMES’s application was its use in 2019 to assess the impact of potential environmental tax reform in Bangladesh that may be implemented in the future.
- At COPPE/UFRJ, researchers have augmented the capabilities of the IAM Total-Economy integrated Assessment Model (TEA model) by incorporating national greenhouse gas emission reduction targets and conducting simulations on how these targets can be achieved via extended carbon pricing. They have created simulations of different counterfactual scenarios based on two different baseline projections (i.e., Independent Evaluation Office and World Economic Outlook). The scenarios include estimates of alternative NDCs (i.e., regional reduction requirements from the baselines (NDC targets)) and different degrees of cooperation for carbon markets (i.e. sectoral, regional or global trading) derived through simulation. The results include real GDP, welfare, CO2 emissions per sector, CO2 prices and CO2 tax revenues. The outcome also includes regional Marginal Abatement Curves (MAC), derived from simulation runs with carbon prices from 1 USD to 200 USD in incremental steps of 5 USD. Simulation was performed for each individual region. The modelling development was conducted as part of the Energy Modelling Forum 36 exercises that include the simulation of MAC and the simulation of different degrees of cooperation among regional carbon markets to achieve NDC scenarios.
- Researchers at Peking University applied the IMED-CGE (Integrated Model of Energy, Environment and Economy for Sustainable Development-Computable General Equilibrium) model to evaluate the current climate mitigation policies and the possibility to reach the declared NDC targets in Taiwan, China. The focus of the study is on the current status and possible impacts of the NDC targets’ implementation in Taiwan. The results indicate that Taiwan’s NDC target is achievable under certain policy scenarios but with different economic costs. The researchers find that a well-designed ETS mechanism could significantly reduce the abatement costs to achieve the NDC targets in Taiwan and cut CO2 emissions in a more cost-effective way, and thus could improve the overall economic performance and welfare of the economy. The paper is available online in Natural Hazards.
- The TIMES-Starter Model Management Platform has recently supported the development of the TIMES-COSTARICA model to identify least-cost NDC roadmaps for Costa Rica towards becoming a net GHG sink. By streamlining the process of initial model assembly, the TIMES-Starter Platform dramatically cuts the time needed to develop a model, greatly improves the quality of first-time TIMES models for NDC, and provides all the facilities needed to effectively and efficiently carry out an energy systems analysis to support better informed decision-making. The platform provides an integrated full-sector energy system model (with the option to include water use) in the form of a set of Excel workbook templates that are easily transformed by a base-year energy balance, resource supply and power generation mix, and then calibrated. It includes a rich set of future technology options for all sectors of the energy and sample sensitivity scenarios.