Analysis of the economic and environmental impacts of climate change using RICE model adjusted by methane

Sofia Aleshina, Richard Tol and Valeriya Ignatovskaya

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: This work presents a modified version of the integrated economic-climate model RICECH4. The aim of the work was to expand the basic RICE model by explicitly accounting for methane (CH4) emissions along with traditional carbon dioxide (CO2) emissions, as well as the subsequent analysis of the economic and climatic effects of implementing various emissions control strategies. The development was based on the open implementation of RICE in Python using the Pyomo library and the IPOPT solver. The model was modified as follows: a separate methane cycle block was implemented, including both industrial and natural CH4 emissions; the radiative forcing function was adapted taking into account the contribution of methane; a new control variable was built in to reduce CH4 emissions; the logic of two climate policy scenarios, cooperative and non-cooperative, was implemented. In addition, parameterization and aggregation of input data for 12 regions were conducted based on open sources. The model covers key blocks of integrated assessment: the dynamics of capital, investment, savings, production, consumption, and emissions, as well as climate indicators—greenhouse gas concentrations, atmospheric and ocean temperatures, radiative forcing, and climate change damage. Simulations were conducted for the 2025–2115 horizon, and the objective function indicators were calculated. The resulting RICE-CH4 model can be used as a tool for quantitative analysis of climate policy, assessing the social cost of emissions, and sustainable development strategies in a regional representation of global data. A flexible implementation structure provides the potential for future expansion of the model: adding new types of emissions, complicating the country interaction block, and integrating it with external risk and resilience assessment modules.

Keywords: climate change; global warming; methane emissions; RICE model; cooperation (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2026
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