Model scope and methods - ENV-Linkages
The OECD ENV-Linkages Computable General Equilibrium (CGE) model is an economic model that describes how economic activities are inter-linked across several macroeconomic sectors and regions. It links economic activity to environmental pressure, specifically to emissions of greenhouse gases (GHGs). The links between economic activities and emissions are projected for several decades into the future, and thus shed light on the impacts of environmental policies for the medium- and long-term future.
The advantages of multi-sectoral, multi-regional (recursive-) dynamic GE models, like ENV-Linkages, involve their global dimension, their overall consistency, and the fact that they are based on rigorous microeconomic foundations. Each of the regions is underpinned by an economic input-output table (usually sourced from national statistical agencies). These tables quantify economic flows across the different economic agents, including purchases of intermediate products and primary factors in all industries and the associated production outputs, as well as sources of income for households and governments and the associated consumption expenditures.
Note: The documentation of ENV-Linkages is 'in preparation' and is not yet 'published'!| Corresponding documentation | |
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| No previous version available | |
| Model information | |
| Model link | |
| Institution | Organisation for Economic Co-operation and Development (OECD), France, https://www.oecd.org/. |
| Solution concept | General equilibrium (closed economy) |
| Solution method | Optimization |
| Anticipation | The ENV-Linkages model is a recursive dynamic neo-classical general equilibrium model, meaning that decision-makers do not know the future when making a decision today. After it solves each period, the model then uses the resulting state of the world, including the consequences of decisions made in that period - such as resource depletion, capital stock retirements and installations, and changes to the landscape - and then moves to the next time step and performs the same exercise. |