Integration of energy system and computable general equilibrium models: An approach complementing energy and economic representations for mitigation analysis

Nishiura, O., Krey, V. ORCID: https://orcid.org/0000-0003-0307-3515, Fricko, O. ORCID: https://orcid.org/0000-0002-6835-9883, van Ruijven, B. ORCID: https://orcid.org/0000-0003-1232-5892, & Fujimori, S. ORCID: https://orcid.org/0000-0001-7897-1796 (2024). Integration of energy system and computable general equilibrium models: An approach complementing energy and economic representations for mitigation analysis. Energy 296 p. 131039. 10.1016/j.energy.2024.131039.

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Abstract

Energy system and computable general equilibrium (CGE) models play vital roles in climate change mitigation studies. These models have advantages and disadvantages, and attempts have been made to integrate them. This study aimed to describe the method for integrating energy system and CGE models and demonstrate the new model that captures the strengths of both models. The method developed in this study ensured the detailed convergence of the energy system by exchanging the results iteratively. We demonstrated the model integration by adopting the method to MESSAGEix-GLOBIOM and AIM/Hub and estimating a mitigation scenario that limits the temperature rise to below 2 °C under the middle-of-the-road socioeconomic projection in Shared Socioeconomic Pathways. As a result of the integration, the index showing the difference between the two models proposed in this study decreased from 1.0 to 0.066. Therefore, we confirmed that these models estimated consistent scenarios. The diagnostic indicators showed that compared to its counterpart CGE model, the newly-developed model was characterized by a higher contribution of demand-side reductions, a lesser alteration in the primary energy supply composition, and lower abatement costs. Given the convergence and advantages of the integrated framework, the proposed method is useful for further application to mitigation studies.

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