Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy

Roberto Roson, Francesco Bosello and Enrica De Cian ()

No 2007.71, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Future energy demand will be affected by changes in prices and income, but also by other factors, like temperature levels. This paper draws upon an econometric study, disentangling the contribution of temperature in the determination of the annual regional demand for energy goods. Combining estimates of temperature elasticities with scenarios of future climate change, it is possible to assess variations in energy demand induced (directly) by the global warming. We use this information to simulate a change in the demand structure of households in a CGE model of the world economy, in a set of assessment exercises. The changing demand structure triggers a structural adjustment process, influencing trade flows, regional competitiveness of industries and regions, and welfare. We also consider the possible existence of imperfect competition in the energy markets, analyzing the impact of changes in energy demand with an alternative model version, in which energy industries are modeled as Cournot oligopolies.

Keywords: Climate Change; Energy; Computable General Equilibrium Models; Imperfect Competition (search for similar items in EconPapers)
JEL-codes: D58 F12 Q43 Q54 (search for similar items in EconPapers)
Date: 2007-07
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy (2007)
Working Paper: Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy (2007)
Working Paper: Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2007.71

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