I modelli CGE come strumenti di analisi. Un applicazione agli impatti del cambiamento climatico

Transcription

1 I modelli CGE come strumenti di analisi. Un applicazione agli impatti del cambiamento climatico Francesco Bosello IEFE Milano - November 11, 2008

2 Overview A sort overview on economic models CGE models A practical example the ICES model An application to climate change impacts 1

3 What is a model A simplification of the reality, but sufficiently representative (operational). The (social economic) reality is so complex that it is not possible that a single model captures all its different features => Different models for different purposes 2

4 A short taxonomy and some definitions Time treatment Economic scope Markets description Policy perspective Static One period models, comparative static exercises General Equilibrium All markets interacting Top-Down More macro view Policy optimisation. Utility maximising path to reach a given target Dynamic Time appears (fully dynamic optimization, recursive dynamic) transitions Partial equilibrium View on a single sector or market, no feedbacks Bottom-Up Detailed technological description Policy evaluation. if-then analysis 3

5 Sketching a CGE model supply Income Input markets K, L, Land, NR Consumers (households, government) Demand and supply functions mimic observed economic systems: parameters are calibrated on real data. All markets are interdependent. Input and output re-locate internationally/sectorally responding to price signals: AUTONOMOUS ADAPTATION Income demand Output markets Goods and services Maximise welfare from consumption Constrained by income They meet in Constrained by technology demand Producers (firms, government) supply Minimise cost of production 4

6 The I/O structure Country A Country B S1 S2 Sn S1 S2 Sn S1 S1 S2 S2 Sn Sn 5

7 What they have been and can be used for Originally developed to study international trade policies (tariffs reform, NAFTA, Doha Round, EU CAP). Used to study also public sector policies, basically tax reforms. Then, because of their flexibility, applied to different issues (env. policies, ind. policies, transportation, FDI, ODA). In principle any phenomenon that can be modelled as a change in endowment, productivity and preferences is suitable to be evaluated. 6

8 Problematics and caveats Highly data intensive. If something turns out not to be included in the calibration year it cannot simply be added ex post. All the model need to be recalibrated (basically recomputation of all substitution elasticities) Economic policy indications are reliable as long as the time they are referred to is reasonably close (the economic system is reasonably similar) to the calibration period. Good for the shortterm ( partially accommodated with pseudo calibration ) Computationally heavy, difficult to add sophisticated dynamics (usually myopic agents, adaptive expectations like engine) These models provide information in terms of flow variables, they are GDP based 7

9 A practical example: the ICES model (1) Recursive-dynamic general equilibrium model of the world economic system: Top - Down model 86 regions, 57 sectors Inter sectoral factor mobility (K, L, Land & Natural Res ) International trade International investment flows GHG emissions CO2 (Carbon dioxide) CH4 (Methane) N2O (Nitrous oxide) SO2 (Sulphur Dioxide New) Calibrated on

10 A practical example: the ICES model (2) Supply side: Representative cost minimizing Firm Output Output Leontief 1 Level V.A. + Energy CES σ VAE Other Inputs σ D 2 Level 3 Level Natural Resources Land Labour Capital Capital + Energy CES σ KE Energy CES σ=1 Domestic Region 1 Foreign Region... σ M Region n 4 Level Non Electric CES σ=0.5 Electric σ D 5 Level 6 Level Non Coal CES σ=1 Domestic Coal σ D Foreign σ M Domestic Reg 1 Foreign Reg.. σ M Reg n Gas σ D Oil Petroleum Products σ D Reg 1 Reg.. Reg n Domestic Foreign Domestic Foreign σ D Reg 1 σ M Reg n Domestic Foreign σ M Reg 1 σ M Reg n Reg.. Reg 1 Reg.. Reg n Reg.. 9

11 A practical example: the ICES model (3) Representative consumer: Regional Household Utility Utility Cobb-Douglas Private Consumption Public Consumption Savings Item 1 Item Item m Item 1 Item Item m Domestic Foreign Domestic Foreign Region 1 Region n Region 1 Region n Region... Region... 10

12 A practical example: the ICES model (4) Households Savings Region 1 Region 1 Region 2 Region 2 Region n Region n Global Bank Firms Investments Region 1 Region 1 Region 2 Region 2 Region n Region n 11

13 A practical example: the ICES model (5) Households Households Savings Savings t t Region 1 Region 1 Region 2 Region 2 Region n Region n Period t Investment allocation Global Global Bank Bank Firms Firms Investments Investments t t Region 1 Region 1 Region 2 Region 2 Region n Region n Capital Accumulation Savings Savings t+1 t+1 Region 1 Region 1 Region 2 Region 2 Region n Region n Period t+1 Global Global Bank Bank Kb Kb Ke Ke r,t+1 r,t+1 r,t Investments Investments t+1 t+1 Region 1 Region 1 Region 2 Region 2 Region n Region n 12

14 A practical example: the ICES model (7) 12 Regions: USA: United States NEWEURO: Eastern EU OLDEURO: EU 15 KOSAU: Korea, S. Africa, Australia CAJANZ: Canada, Japan, New Zealand TE: Transitional Economies MENA: Middle East and North Africa SSA: Sub Saharan Africa SASIA: India and South Asia CHINA: China EASIA: East Asia LACA: Latin and Central America 17 Sectors: Rice Wheat Cereal Crops Vegetable Fruits Animals Forestry Fishing Coal Oil Gas Oil Products Electricity Water Energy Intensive industries Other industries Market Services Non-Market Services 13

15 Pseudo calibration -Capital stock (and debt accumulation): Endogenous. - Population/labour stock: COMMON POLES IMAGE (van Vuuren et al., 2005) - Labour productivity: G-Cubed model Version48E (McKibbin, 2001). - Crops productivity: IMAGE 2.2, B1 Scenario (RIVM, 2001). - Fossil fuel reserves: adjusted to mimic long-term price projections for Oil, Coal & Natural Gas Energy Information Administration, U.S. Department of Energy 14

16 Baseline assumptions % changes Capital Stock (static model) Labour Force Agriculture Sectoral Labour Productivity Energy Sectors Electricity Oth. Ind. And Services Land productivity USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA LACA

17 Baseline results - 1 Real GDP % growth ( ) static ICES dynamic ICES IPCC B USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA LACA 16

18 GDP trend (% change) - ICES Baseline results - 2 USA OLDEURO NEWEURO KOSAU CAJAZ TE MENA SSA SASIA CHINA EA SIA LACA

19 A practical example: the ICES model (6) Climate Models Sea-Level Health Tourism Land-Use Water... Endowments Productivity Dem. Structure General Equilibrium Interactions in the World Economy 18

20 Land Stock Land productivity Land loss Cer Other Food Wheat Rice to SLR Crops Productions USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA CC impacts 1.5º C temperature increase in 2050 wrt average (% change wrt baseline) LACA Households' Energy Demand Labour Productivity and Health Care Tourism Demand Natural Oil Gas Products Electricity Labour Public Private Mserv Income Health Care Health Care Prod. Demand Transfers* Exp. Exp. USA OLDEURO NEWEURO KOSAU ns => end CAJANZ TE MENA SSA ns => end SASIA ns => end ns => end CHINA ns => end ns => end EASIA ns => end ns => end LACA ns => end ns => end

21 An application to climate change impacts - 1 CC vs Baseline: Real GDP (% change) USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA LACA

22 An application to climate change impacts - 2 CC vs Baseline: World Prices (% change) 5 Rice 4 3 Wheat CerCrops VegFruits 2 1 Animals Forestry Fis hing 0-1 Coal Oil Gas -2-3 Oil_Pcts Electricity Water En_Int_ind Oth_ind MServ NMServ 21

23 An application to climate change impacts - 3 CC vs Baseline: Terms of Trade (% change) USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA LACA

24 The sectoral picture Climate change impacts on production in 2050 (% change wrt base) USA OLDEURO NEWEURO KOSAU CAJANZ TE MENA SSA SASIA CHINA EASIA LACA Land Capital Rice Wheat CerCrops Other Food Forestry Fishing Coal Oil Gas Oil_Pcts Electricity Water En_Int_ind Oth_ind MServ NMServ Investment GDP

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