Computational models based on economic principles and methods are powerful tools for understanding and analyzing problems in energy and the environment and for designing policies to address them. Among their other features, some current models of this type incorporate information on sustainable energy technologies and can be used to examine their potential role in addressing the problem of global climate change. The underlying principles and the characteristics of the models are summarized, and examples of this class of model and their applications are presented. Modeling epistemology and related issues are discussed, as well as critiques of the models. The paper concludes with remarks on the evolution of the models and possibilities for their continued development.
REFERENCES
1.
Meadows
, Donella
H.
, and Dennis L.
Meadows
, Jorgen
Randers
, William W.
Behrens
III. 1972
. The Limits to Growth - A Report for the Club of Rome’s Project on the Predicament of Mankind
. New York
: Universe Books
.2.
Farrell
, Alexander
E.
, and Adam R.
Brandt
. 2006
. “Risks of the oil transition
.” Environmental Research Letters
1
: 014004
(6pp).3.
Gillingham
, Kenneth
, and David S.
Rapson
, Gernot
Wagner
. 2016
. “The Rebound Effect and Energy Efficiency Policy
.” Review of Environmental Economics and Policy
10
(1
), Winter: 68
–88
.4.
Edmonds
, James
A.
, and Katherine V.
Calvin
, Leon E.
Clarke
, Anthony C.
Janetos
, Son H.
Kim
, Marshall A.
Wise
, Haewon C.
McJeon
. 2012
. “Integrated Assessment Modeling.” Chapter 8 in Rasch
, P. J.
, Ed., Climate Change Modeling Methodology: Selected Entries from the Encyclopedia of Sustainability Science and Technology
. Springer Science+Business Media
, New York
: 169
–209
.5.
Nordhaus
, William
. 2013
. “Integrated Economic and Climate Modeling.” In Dixon
, P. B.
and Jorgenson
, D. W.
, Eds., Handbook of Computable General Equilibrium Modeling
. North Holland
, Elsevier B. V.
: 1069
–1131
.6.
Weyant
, John
. 2014
. “Integrated assessment of climate change: state of the literature
.” Journal of Benefit-Cost Analysis
5
(3
): 377
–409
.7.
Hogan
, W. W.
1975
. Energy policy models for project independence
. Computers & Operations Research
2
(3–4
):251
–271
.8.
EIA
. 2009
. The National Energy Modeling System: An overview 2009
. Washington, DC
: Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy
.9.
National Research Council (NRC)
. 1992
. The National Energy Modeling System
. Washington, DC
: National Academy Press
.10.
EIA
. 2014
. Annual energy outlook 2014 with projections to 2040
. Washington, DC
: Energy Information Administration
.11.
EIA
. 2012
. Analysis of the clean energy standard act of 2012
. Energy Information Administration, U.S. Department of Energy
.12.
Ross
, Martin
T.
2005
. Documentation of the Applied Dynamic Analysis of the Global Economy (ADAGE) Model
. Working Paper 05_01
, Research Triangle International
, November.13.
Goettle
, R. J.
, M. S.
Ho
, D. W.
Jorgenson
, D. T.
Slesnick
, P. J.
Wilcoxen
, and E. C.
EP-W
. 2007
. Igem, an inter-temporal general equilibrium model of the us economy with emphasis on growth, energy and the environment
.14.
EPA
. 2009
. Epa analysis of the american clean energy and security act of 2009: H.R. 2454 in the 111th congress
. Environmental Protection Agency, Office of Atmospheric Programs
.15.
EPA
. 2010
. Documentation for epa base case v.4.10 using the integrated planning model
. Washington, DC
: Environment Protection Agency, Clean Air Markets Division
.16.
Goldstein
, G. A.
, L. A.
Goudarzi
, P.
Delaquil
, and E.
Wright
. 2008
. Ne-12 markal final report structure, data and calibration: Final deliverable to northeast states center for a clean air future under irg contract. International Resources Group
.17.
Lashof
, D. A.
, S.
Yeh
, D.
Doniger
, S.
Carter
, and L.
Johnson
. 2013
. Closing the power plant carbon pollution loophole: Smart ways the clean air act can clean up america’s biggest climate polluters
. National Research Defense Council
.18.
Weyant
, John
, et al, eds. 2014
. “Special Issue: The EMF27 Study on Global Technology and Climate Policy Strategies
.” Climatic Change
123
(3-4
), April: 345
–783
.19.
Krey
, Volker
, and Gunnar
Luderer
, Leon
Clarke
, Elmar
Kreigler
. 2014
. “Getting from here to there - energy technology transformation pathways in the EMF27 scenarios
.” Climatic Change
123
(3-4
), April: 369
–382
.20.
Nordhaus
, William
. 1993
. “Rolling the ’DICE’: An optimal transition path for controlling greenhouse gases
.” Resource and Energy
15
: 27
–50
.21.
Nordhaus
, William
. 2008
. A Question of Balance: Weighing the Options on Global Warming Policies
. Yale University Press
.22.
Sokolov
, A. P.
et al 2005
. “The MIT Integrated Global System Model IGSM) Version 2: Model Description and Baseline Evaluation
.” Report No. 124, MIT Joint Program on the Science and Policy of Global Change
, July.23.
24.
Gruhl
, J.
, and N.
Gruhl
. 1978
. Methods and examples of model validation: An annotated bibliography
. MIT Energy Laboratory Working Paper MIT-EL 78-022 WP
.25.
National Bureau of Standards
. 1980
. Validation and assessment issues of energy models: Proceedings of a workshop held at the national bureau of standards, gaithersburg, md.
Washington, DC
: National Bureau of Standards, National Engineering Laboratory, U.S. Department of Commerce
.26.
Oberkampf
, William
L.
, and Christopher J.
Roy
. 2010
. Verification and validation in scientific computing
. New York
: Cambridge University Press
.27.
Peace
, Janet
, and John
Weyant
. 2008
. “Insights Not Numbers: The Appropriate Use of Economic Models
.” White Paper, Pew Center on Global Climate Change
, April.28.
Dawkins
, Cristina
, and T. N.
Srinivasan
, John
Whalley
. 2001
. “Calibration.” Chapter 58 in J. J.
Heckman
and E.
Leamer
, eds., Handbook of econometrics
, Volume 5
, Elsevier Science B. V.
: 3653
–3703
.29.
McJeon
, Haewon
C.
, et al 2011
. “Technology interactions among low-carbon energy technologies: What can we learn from a large number of scenarios?
” Energy Economics
33
: 619
–631
.30.
Butler
, Martha
P.
, et al 2014
. “Identifying parametric controls and dependencies in integrated assessment models using global sensitivity analysis
.” Environmental Modeling & Software
59
: 10
–29
.31.
Kriegler
, Elmar
et al 2015
. “Diagnostic indicators for integrated assessment models of climate policy
.” Technological Forecasting & Social Change
90
: 45
–61
.32.
Howarth
, Richard
B.
, and Richard B.
Norgaard
. 1992
. “Environmental Valuation under Sustainable Development
.” The American Economic Review
82
(2
), Papers and Proceedings of the Hundred and Fourth Annual Meeting of the American Economic Association
, May: 473
–477
.33.
Howarth
, Richard
B.
, and Richard B.
Norgaard
. 1993
. “Intergenerational transfers and the social discount rate
.” Environmental and Resource Economics
3
(4
), August: 337
–358
.34.
Howarth
, Richard
B.
1998
. “An Overlapping Generations Model of Climate-Economy Interactions
.” Scandinavian Journal of Economics
100
(3
): 575
–591
.35.
Sanstad
, Alan
H.
, and Lorna A.
Greening
. 1998
. “Economic models for climate policy analysis: A critical discussion
.” Environmental Modeling and Assessment
3
: 3
–18
.36.
DeCanio
, Stephen
J.
2003
. Economic models of climate change: a critique
. Springer
.37.
Ackerman
, Frank
, and Stephen J.
DeCanio
, Richard B.
Howarth
, Kristen
Sheeran
. 2009
. “Limitations of integrated assessment models of climate change
.” Climatic Change
95
: 297
–315
.38.
Pindyck
, Robert
S.
2013
. “Climate Change Policy: What Do the Models Tell Us?
” Journal of Economic Literature
51
(3
), September: 860
–872
.39.
Fischer
, Carolyn
, and Richard D.
Morgenstern
. 2006
. “Carbon Abatement Costs: Why the Wide Range of Estimates?
” The Energy Journal
27
(2
): 73
–86
.40.
Parker
, L.
, and B.
Yacobucci
. 2008
. Climate change: Costs and benefits of s. 2191. Crs report for congress rl34489
. Congressional Research Service
.41.
Sanstad
, Alan
H.
2015a
. “Assessing Agent-Based Models for Regulatory Applications: Lessons from Energy Analyis.” Appendix C in R.
Wallace
, et al, Eds., Assessing the Use of Agent-Based Models for Tobacco Regulation
. Institute of Medicine of the National Academies
, March.42.
Sanstad
, Alan
H.
2015b
. “Abating Carbon Dioxide Emissions from Electric Power Generation: Model Uncertainty and Regulatory Epistemology
.” Journal of Legal Studies
44
(S2
), June: S423
–S445
.
This content is only available via PDF.
© 2018 Author(s).
2018
Author(s)
You do not currently have access to this content.
