Economic activity - EPPA: Difference between revisions
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The social-economic drivers of EPPA also include a set of variables solved endogenously by the model, which consist of savings, investment, resource depletion, and the evolution of technology specific factor (a.k.a. fixed factor) for each backstop technology. | The social-economic drivers of EPPA also include a set of variables solved endogenously by the model, which consist of savings, investment, resource depletion of fossil fuels, and the evolution of technology specific factor (a.k.a. fixed factor) for each backstop technology. Savings provide funds for investment, which increases the output of the next period. On the other hand, the use of fossil fuels in the current period decreases the resources available for the consumption in the future. In addition, EPPA considers the technology specific factor to model the introduction of a new/backstop technology. The limited supply of the technology specific factor at the early stage of introducing the backstop technology captures the phenomenon that the costs of operating the new technology tend to be higher at the beginning, but the costs may go down gradually with learning-by-doing, knowledge accumulation, etc. The parameterization of technology specific factors is based on the empirical study presented in Morris et al. (2019) <ref>Morris, J.F., J.M. Reilly and Y-H. H. Chen (2019). “Advanced Technologies in Energy-Economy Models for Climate Change Assessment.” Energy Economics, 80 (476-490) (doi: 10.1016/j.eneco.2019.01.034).</ref>. | ||
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Revision as of 22:52, 11 July 2022
The social-economic drivers of EPPA also include a set of variables solved endogenously by the model, which consist of savings, investment, resource depletion of fossil fuels, and the evolution of technology specific factor (a.k.a. fixed factor) for each backstop technology. Savings provide funds for investment, which increases the output of the next period. On the other hand, the use of fossil fuels in the current period decreases the resources available for the consumption in the future. In addition, EPPA considers the technology specific factor to model the introduction of a new/backstop technology. The limited supply of the technology specific factor at the early stage of introducing the backstop technology captures the phenomenon that the costs of operating the new technology tend to be higher at the beginning, but the costs may go down gradually with learning-by-doing, knowledge accumulation, etc. The parameterization of technology specific factors is based on the empirical study presented in Morris et al. (2019) [1].
Note: The documentation of EPPA is 'in preparation' and is not yet 'published'!| Corresponding documentation | |
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| Model information | |
| Model link | |
| Institution | Massachusetts Institute of Technology (MIT), USA, https://globalchange.mit.edu/. |
| Solution concept | General equilibrium (closed economy) |
| Solution method | Optimization |
| Anticipation | |
- ↑ Morris, J.F., J.M. Reilly and Y-H. H. Chen (2019). “Advanced Technologies in Energy-Economy Models for Climate Change Assessment.” Energy Economics, 80 (476-490) (doi: 10.1016/j.eneco.2019.01.034).