Energy-Economy Analysis: Linking the Macroeconomic and Systems-Enginering Approaches

Wene, C.-O. (1995). Energy-Economy Analysis: Linking the Macroeconomic and Systems-Enginering Approaches. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-95-042

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Abstract

A necessary condition for an internally controlled soft-linking of two models is a common, formalised language describing the areas of overlap between the models. This principle is discussed and demonstrated for the softlinking of the macroeconomic and system-engineering models in the scenario work of the Environmentally Compatible Energy Strategies (ECS) Project at IIASA. The Reference Energy System (RES) can describe how the models identify their relevant system in the overlapping areas. Using RES as the common language, a Clearing House is set up to develop the soft-linking procedures and to control the quality of the linking. The procedures permit an interpretation of a key parameter describing energy efficiency improvements in the macroeconomic model into results obtained by the systems-engineering model. Other insights emerge into the "top-down versus bottom-up approaches", which is a label sometimes used to describe the two alternative modelling perspectives. It is illustrative to discuss the insights in term of fallacies that may result from a reliance on one single perspective. We identify here the "reductionist" and the "black box" fallacies.

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