Modelling Sustainable Development

Modelling Sustainable Development

Transitions to a Sustainable Future

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Valentina Bosetti, Reyer Gerlagh and Stefan P. Schleicher

This insightful book explores the issue of sustainable development in its more operative and applied sense. Although a great deal of research has addressed potential interpretations and definitions of sustainable development, much of this work is too abstract to offer policy-makers and researchers the feasible and effective guidelines they require. This book redresses the balance.

Chapter 11: Impact Assessment of Climate Policies (IMACLIM-S)

Frédéric Ghersi

Subjects: economics and finance, environmental economics, environment, environmental economics


Frédéric Ghersi 11.1 INTRODUCTION This text provides a technical description of the aggregated one-region (global) two-good version of IMACLIM-S used in the TranSust project. The two goods are energy E and an aggregate of all other productions, or composite good, Q. Notwithstanding such a high level of aggregation, IMACLIM-S is presented in a generalised i-sector format, to limit the number of equations to be commented upon and give a sense of how the composite sector is disaggregated in other versions of the model. The formulary is preceded by a short overview describing the purpose of the model and its general architecture. 11.2 IMACLIM-S: AN OVERVIEW IMACLIM-S is a static general equilibrium framework designed to assess the macroeconomic impacts of a price- or quantity-based carbon policy at some medium- to long-term horizon. It focuses on the sensitivity of such impacts to the technical abatement costs and the particulars of the policy tools (tax reforms, trading systems, technical or emission standards) triggering abatement. It is built to allow for the description of economies with: (i) a suboptimal equilibrium on the labour market; and (ii) behaviours of the underlying technical systems that cannot be approximated by ‘well-behaved’ production or utility functions for large departures from the reference scenario. The shifts of technical systems impact upon an aggregated induced technical change encompassing learning by doing and research and development activities; IMACLIM-S thus operates in an endogenous technical change framework. Relying on the method of comparative-static analysis, it provides insights that are valid...

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