Henri Waisman

IMACLIM-R: a modelling framework to simulate sustainable development pathways

To assess the sustainability of future development pathways requires models to compute long-run Economy-Energy-Environment scenarios. This paper presents the IMACLIM-R framework, aimed at investigating climate, energy and development inter-related issues. The model was built in an attempt to address three methodological challenges: to incoporate knowledge from economics and engineering sciences, to support the dialogue with and between stakeholders, to produce scenarios with a strong consistency, concerning especially the interplay between development patterns, technology and growth. These goals led to the development of a recursive structure articulating a static general equilibrium framework including innovative features and sectorspecific dynamic modules now concerning energy, transportation and industry. This paper provides the general rationale of the model and the description of all its components.

The Imaclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight

This paper analyzes the transition costs of moving towards a low carbon society when the second-best nature of the economy is accounted for. We emphasize the consequences on mitigation costs of considering the interplay between a) technical systems inertia, including slow infrastructure turnover in transportation and construction; and b) imperfect foresight influencing investment decisions. To this end, the hybrid general equilibrium modeling framework Imaclim-R is employed as it allows for transitory partial adjustments of the economy and captures their impact on the dynamics of economic growth. The modeling exercise quantitatively emphasizes the a) specific risks that the interplay between inertia and imperfect foresight leads to high macroeconomic costs of carbon abatement measures; b) opportunities of co-benefits from climate policies permitted by the correction of sub-optimalities in the reference scenarios. The article draws insights for the framing of future climate architectures by studying the role of measures that act complementarily to carbon pricing in the transport sector. In particular, reallocating public investment towards low-carbon transport infrastructure significantly reduces the overall macroeconomic costs of a given GHG stabilization target and even creates the room for long-term net economic benefits from climate policies.

The value of technology and of its evolution towards a low carbon economy

This paper assesses the economic value associated with the development of various low-carbon technologies in the context of climate stabilization. We analyze the impact of restrictions on the development of specific mitigation technologies, comparing three integrated assessment models used in the RECIPE comparison exercise. Our results indicate that the diversification of the carbon mitigation portfolio is an important determinant of the feasibility of climate policy. Foregoing specific low carbon technologies raises the cost of achieving the climate policy, though at different rates. CCS and renewables are shown to have the highest value, given their flexibility and wide coverage. The costs associated with technology failure are shown to be related to the role that each technology plays in the stabilization scenario, but also to the expectations about their technological progress. In particular, the costs of restriction of mature technologies can be partly compensated by more innovation and technological advancement.

On the regional distribution of mitigation costs in a global cap-and-trade regime

This paper analyzes the regional distribution of climate change mitigation costs in a global cap-and-trade regime. Four stylized burden-sharing rules are considered, ranging from GDP-based permit allocations to schemes that foresee a long-term convergence of per-capita emission permits. The comparison of results from three structurally different hybrid, integrated energy-economy models allows us to derive robust insights as well as identify sources of uncertainty with respect to the regional distribution of the costs of climate change mitigation. We find that regional costs of climate change mitigation may deviate substantially from the global mean. For all models, the mitigation cost average of the four scenarios is higher for China than for the other macro-regions considered. Furthermore, China suffers above-world-average mitigation costs for most burden-sharing rules in the long-term. A decomposition of mitigation costs into (a) primary (domestic) abatement costs and (b) permit trade effects, reveals that the large uncertainty about the future development of carbon prices results in substantial uncertainties about the financial transfers associated with carbon trade for a given allocation scheme. This variation also implies large uncertainty about the regional distribution of climate policy costs.

The Deep Decarbonization Pathways Project (DDPP): insights and emerging issues

International climate policy discussions have fundamentally changed since the fifteenth Conference of the Parties (COP 15) in Copenhagen. Before, the debate was organized around short-term, incremental actions and common but differentiated responsibility (CBDR) was interpreted as putting the responsibility for action on developed countries. Since then, international negotiations have evolved under the increasing pressure from scientific evidence of the negative development impacts of climate change drivers and outcomes (e.g. coal combustion air pollution and sea level rise) and of the increasingly stringent mitigation requirements for climate stabilization. This resulted in international agreement to limit the mean surface temperature increase to 2°C compared with pre-industrial levels, as formalized in the Cancun COP 16 agreement, and recognition that formal participation by all major emitters would be required, as formalized in the Durban COP 17 agreement that each nation would offer voluntary national low-carbon development strategies. These are now called Intended Nationally Determined Contributions (INDCs).

Global carbon pricing and the “Common But Differentiated Responsibilities”: the case of China

This paper analyzes whether using carbon pricing as the major mitigation policy instrument is compatible with the implementation of the “common but differentiated responsibility” principle in a global climate agreement. We focus more specifically on China, a key player in climate negotiations. This is done by adopting the Imaclim-R model to assess the economic effect of carbon pricing on the Chinese economy in different climate architectures which, despite aiming at the same stabilization target, differ in terms of the temporal profile of emission reductions and the regional distribution of efforts (different quota allocation schemes). Model outcomes prove that neither temporal nor regional flexibilities provides a satisfactory answer since the Chinese economy remains significantly hurt at certain time periods. This suggests the recourse to complementary measures to carbon pricing in order to help smoothing the necessary shift toward a low-carbon society. This means in particular that, to build a climate policy architecture that could be compatible with the “common but differentiated responsibility” principle, climate negotiations must go beyond global top-down systems relying on cap-and-trade to include bottom-up measures likely to complement the carbon price and make carbon mitigation acceptable in countries like China.

Carbon prices across countries

With country-specific development objectives and constraints, multiple market failures and limited international transfers, carbon prices do not need to be uniform across countries, but must be part of broader policy packages.

Agglomeration, Urban Growth and Infrastructure in Global Climate Policy: A Dynamic CGE Approach

This paper presents an integrated model of urban agglomeration economies within a computable general equilibrium (CGE) model of global economic activity, energy use and carbon emissions to explore the theoretical and empirical nature of the interdependence of cities and the world economy in a climate policy context. Based on calibration data for 74 major OECD agglomerations, the integrated model is used to gauge the long-term impact of: i) global carbon pricing on urban systems and the economic activity; ii) urban infrastructure development on the economic costs of curbing carbon emissions. Importantly, it is found that combining urban infrastructure and carbon pricing allows for stringent emissions reduction targets, while still avoiding the economic and welfare costs of the carbon price only.

Towards a Better Understanding of Disparities in Scenarios of Decarbonization: Sectorally Explicit Results from the RECIPE Project

This paper presents results from a model intercomparison exercise among regionalized global energy-economy models conducted in the context of the RECIPE project. The economic adjustment effects of long-term climate policy aiming at stabilization of atmospheric CO2 concentrations at 450 ppm are investigated based on the cross-comparison of the intertemporal optimization models REMIND-R and WITCH as well as the recursive dynamic computable general equilibrium model IMACLIM-R. The models applied in the project differ in several respects and the comparison exercise tracks differences in the business as usual forecasts as well as in the mitigation scenarios to conceptual differences in the model structures and assumptions. In particular, the models have different representation of the sectoral structure of the energy system. A detailed sectoral analysis conducted as part of this study reveals that the sectoral representation is a crucial determinant of the mitigation strategy and costs. While all models project that the electricity sector can be decarbonized readily, emissions abatement in the non-electric sectors, particularly transport, is much more challenging. Mitigation costs and carbon prices were found to depend strongly on the availability of low-carbon options in the non-electric sectors.