EconPapers    
Economics at your fingertips  
 

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

Gabriele Standardi (), Yiyong Cai and Sonia Yeh

Energy Economics, 2017, vol. 63, issue C, 116-128

Abstract: 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 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.

Keywords: Computable General Equilibrium; Carbon mitigation policy; Sensitivity; Technology; Sub-national regions; Model uncertainty (search for similar items in EconPapers)
JEL-codes: Q4 Q5 C68 R1 D58 E16 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988317300312
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Sensitivity of Modeling Results to Technological and Regional Details: The Case of Italy’s Carbon Mitigation Policy (2017) Downloads
Working Paper: Sensitivity of Modeling Results to Technological and Regional Details: The Case of Italy’s Carbon Mitigation Policy (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:63:y:2017:i:c:p:116-128

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol and J. P. Weyant

More articles in Energy Economics from Elsevier
Series data maintained by Dana Niculescu ().

 
Page updated 2018-02-13
Handle: RePEc:eee:eneeco:v:63:y:2017:i:c:p:116-128