Linking Top-Down and Bottom-UP Models for Climate Policy Analysis: The Case of China

Govinda Timilsina (), Jun Pang and Xi Yang

No 8905, Policy Research Working Paper Series from The World Bank

Abstract: Top-down economic models, such as computable general equilibrium models, are the common tools to assess the economic impacts of climate change policies. However, these models are incapable of representing the detailed technological characteristics of the sources of greenhouse gas emissions. The economic impacts measured by the top-down economic models are likely to be overestimated. This study attempts to quantify the overestimation by measuring the economic impacts linking the top-down model with a bottom-up engineering model for the energy sector. The study uses meeting China's pledges under the Paris Agreement for testing this hypothesis. The study shows that the economic impacts measured by the stand-alone top-down model are almost three times as high as those resulting from the model after linking it with the bottom-up model. However, the findings are sensitive to the assumptions and existing or planned policies on energy technologies considered in the bottom-up model.

Keywords: Energy and Environment; Energy Demand; Energy and Mining; Energy Policies&Economics; Transport Services; Oil Refining&Gas Industry; Climate Change Mitigation and Green House Gases (search for similar items in EconPapers)
Date: 2019-06-20
New Economics Papers: this item is included in nep-cna, nep-ene and nep-env
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:8905

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