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Sensitivity of modeling results to technological and regional details: The case of Italy's carbon mitigation policy

Standardi, Gabriele; Cai, Yiyong; Yeh, Sonia

Description

Model differences in technological and geographical scales are common, but their contributions to uncertainties have not been systematically quantified in the climate policy literature. This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. In particular, we examine the impacts of sub-national details and technological details of power...[Show more]

dc.contributor.authorStandardi, Gabriele
dc.contributor.authorCai, Yiyong
dc.contributor.authorYeh, Sonia
dc.date.accessioned2017-04-10T05:42:56Z
dc.identifier.issn0140-9883
dc.identifier.urihttp://hdl.handle.net/1885/114520
dc.description.abstractModel differences in technological and geographical scales are common, but their contributions to uncertainties have not been systematically quantified in the climate policy literature. This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. In particular, we examine the impacts of sub-national details and technological details of power generation on the estimate of carbon price and economic cost. Taking Italy as an example, we find that the estimation for carbon price and the economic cost of a de-carbonization pathway by means of a model with technological and regional details can be lower than a model without such details by up to 40%. Additionally, the effect of representing regional details appears to be far more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated economic impacts. Our results for Italy highlight the importance of modeling uncertainties of these two key assumptions, which should be appropriately acknowledged when applying CGE models for policy impact assessment. Our conclusions can be generalized to different countries and policy scenarios not in terms of absolute numbers but in terms of economic explanations. In particular, intra-national trade and the sub-national sectoral/technological specialization are important variables for understanding the economic dynamics behind these outcomes.
dc.description.sponsorshipThe research leading to these results has received funding from the Italian Ministry of Education, University and Research and the Italian Ministry of Environment, Land and Sea under the GEMINA project.
dc.format.mimetypeapplication/pdf
dc.publisherElsevier
dc.rights© 2017 Elsevier. http://www.sherpa.ac.uk/romeo/issn/0140-9883/..."Authors pre-print on any website, including arXiv and RePEC" from SHERPA/RoMEO site (as at 13/04/17).
dc.sourceEnergy Economics
dc.subjectComputable General Equilibrium
dc.subjectCarbon mitigation policy
dc.subjectSensitivity
dc.subjectTechnology
dc.subjectSub-national regions
dc.subjectModel uncertainty
dc.titleSensitivity of modeling results to technological and regional details: The case of Italy's carbon mitigation policy
dc.typeJournal article
local.identifier.citationvolume63
dc.date.issued2017-03
local.publisher.urlhttp://www.elsevier.com/
local.type.statusSubmitted Version
local.contributor.affiliationCai, Y., Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University
local.bibliographicCitation.startpage116
local.bibliographicCitation.lastpage128
local.identifier.doi10.1016/j.eneco.2017.01.021
dcterms.accessRightsOpen Access
dcterms.accessRightsOpen Access
CollectionsANU Research Publications

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