Environmental impact assessment for climate change policy with the simulation-based integrated assessment model E3ME-FTT-GENIE

📝 Abstract

A high degree of consensus exists in the climate sciences over the role that human interference with the atmosphere is playing in changing the climate. Following the Paris Agreement, a similar consensus exists in the policy community over the urgency of policy solutions to the climate problem. The context for climate policy is thus moving from agenda setting, which has now been mostly established, to impact assessment, in which we identify policy pathways to implement the Paris Agreement. Most integrated assessment models currently used to address the economic and technical feasibility of avoiding climate change are based on engineering perspectives with a normative systems optimisation philosophy, suitable for agenda setting, but unsuitable to assess the socio-economic impacts of a realistic baskets of climate policies. Here, we introduce a fully descriptive, simulation-based integrated assessment model designed specifically to assess policies, formed by the combination of (1) a highly disaggregated macro-econometric simulation of the global economy based on time series regressions (E3ME), (2) a family of bottom-up evolutionary simulations of technology diffusion based on cross-sectional discrete choice models (FTT), and (3) a carbon cycle and atmosphere circulation model of intermediate complexity (GENIE-1). We use this combined model to create a detailed global and sectoral policy map and scenario that sets the economy on a pathway that achieves the goals of the Paris Agreement with >66% probability of not exceeding 2 $^\circ $C of global warming. We propose a blueprint for a new role for integrated assessment models in this upcoming policy assessment context.

💡 Analysis

A high degree of consensus exists in the climate sciences over the role that human interference with the atmosphere is playing in changing the climate. Following the Paris Agreement, a similar consensus exists in the policy community over the urgency of policy solutions to the climate problem. The context for climate policy is thus moving from agenda setting, which has now been mostly established, to impact assessment, in which we identify policy pathways to implement the Paris Agreement. Most integrated assessment models currently used to address the economic and technical feasibility of avoiding climate change are based on engineering perspectives with a normative systems optimisation philosophy, suitable for agenda setting, but unsuitable to assess the socio-economic impacts of a realistic baskets of climate policies. Here, we introduce a fully descriptive, simulation-based integrated assessment model designed specifically to assess policies, formed by the combination of (1) a highly disaggregated macro-econometric simulation of the global economy based on time series regressions (E3ME), (2) a family of bottom-up evolutionary simulations of technology diffusion based on cross-sectional discrete choice models (FTT), and (3) a carbon cycle and atmosphere circulation model of intermediate complexity (GENIE-1). We use this combined model to create a detailed global and sectoral policy map and scenario that sets the economy on a pathway that achieves the goals of the Paris Agreement with >66% probability of not exceeding 2 $^\circ $C of global warming. We propose a blueprint for a new role for integrated assessment models in this upcoming policy assessment context.

📄 Content

1 Title Environmental impact assessment for climate change policy with the simulation-based integrated assessment model E3ME-FTT-GENIE Authors names and affiliations Jean-Francois Mercure1,2,3, Hector Pollitt2,3, Neil R. Edwards4, Philip B. Holden4, Unnada Chewpreecha2, Pablo Salas3, Aileen Lam3,5, Florian Knobloch1 and Jorge E. Vinuales3
1Radboud University, Netherlands, Department of Environmental Science, Radboud University, PO Box 9010, 6500 GL, Nijmegen, The Netherlands
2Cambridge Econometrics Ltd., Covent Garden, Cambridge CB1 2HT, UK
3Cambridge Centre for Environment, Energy and Natural Resource Governance (C-EENRG), University of Cambridge, 19 Silver Street, Cambridge CB3 1EP, UK
4Environment, Earth and Ecosystems, The Open University, Milton Keynes, UK
5Department of Economics, Faculty of Social Sciences, Humanities and Social Science Building, University of Macao, E21, Avenida da Universidade, Taipa, Macao, China
Corresponding author Jean-Francois Mercure,
Email: J.Mercure@science.ru.nl Tel: +31 24 36 53256

1 Environmental impact assessment for climate change policy with the simulation-based integrated assessment model E3ME-FTT-GENIE J-F Mercure, H. Pollitt, N.R. Edwards, P.B. Holden, U. Chewpreecha, P. Salas, A. Lam, F. Knobloch, J. E. Vinuales Abstract

A high degree of consensus exists in the climate sciences over the role that human interference with the atmosphere is playing in changing the climate. Following the Paris Agreement, a similar consensus exists in the policy community over the urgency of policy solutions to the climate problem. The context for climate policy is thus moving from agenda setting, which has now been mostly established, to impact assessment, in which we identify policy pathways to implement the Paris Agreement. Most integrated assessment models currently used to address the economic and technical feasibility of avoiding climate change are based on engineering perspectives with a normative systems optimisation philosophy, suitable for agenda setting, but unsuitable to assess the socio-economic impacts of a realistic baskets of climate policies. Here, we introduce a fully descriptive, simulation-based integrated assessment model designed specifically to assess policies, formed by the combination of (1) a highly disaggregated macro-econometric simulation of the global economy based on time series regressions (E3ME), (2) a family of bottom-up evolutionary simulations of technology diffusion based on cross-sectional discrete choice models (FTT), and (3) a carbon cycle and atmosphere circulation model of intermediate complexity (GENIE-1). We use this combined model to create a detailed global and sectoral policy map and scenario that sets the economy on a pathway that achieves the goals of the Paris Agreement with

66% probability of not exceeding 2°C of global warming. We propose a blueprint for a new role for integrated assessment models in this upcoming policy assessment context.

1. Introduction 1.1. New questions raised by the Paris Agreement and the role of models December 2015 saw a historical moment for climate policy in which, for the first time, almost all countries of the world adopted a formal agreement to reduce emissions in order to limit global warming to temperatures below 2°C [1].1 This event marked a change in efforts to develop climate policy: the agenda, whether or not to adopt measures to avoid climate change, was mostly set. What remained to be done was to find out how to achieve this objective with public policies, in every country that is party to the agreement.
   Developing climate policy is a complex process that could involve planning for dramatic societal changes and socio-economic impacts [2]. Policies can have unintended effects. The far-reaching consequences of adopting particular emissions reduction policies can be challenging to fully foresee, as they involve changes in many sectors and for many actors. For example, could adopting a high price of carbon to incentivise electrification increase electricity prices for consumers, thereby reducing access to modern energy for those who cannot afford it? Can biofuels policy lead to unintended land-use change, or lead to water or food scarcity? Could reducing the consumption of fossil fuels globally lead to high rates of unemployment in producer countries? Could a highly capital-intensive, low-carbon transition lead to excessive debt leveraging of government and/or firms, and result in a carbon bubble? In order to determine the impacts of specific policies, research must move from the agenda-setting stage to the actual impact assessment of policies. This corresponds to a different stage of the policy cycle, and requires analysing the impacts of detailed baskets of policies, as they are envisaged by policy-makers, with all the attendant political and legal complexities, rather than merely recommending – often unrealistic –

This content is AI-processed based on ArXiv data.