WP5 will develop of a system of integrated complex models combining insights from different fields of research with the emphasis on utilizing the non-linear climate responses and regime-shifts of economic-ecological systems, modelling non-linear processes of diffusion and pervasive technical change and its implication, and representation of economic sectors with a significant potential for mitigation and resource efficiency.

This system consists of Economic, Energy, and Climate models that are represented in four layers: global, country, regional, and individual (household or firm). The linkages between these models are defined in two ways: horizontally within a layer, and vertically between different layers. A system of hard-system models will be developed to trace feedbacks between economic, energy, and climate systems on various geographical scales.

In addition to using conventional, equilibrium-based modelling techniques, WP5 will develop a series of non-equilibrium and agent-based models designed to explore the likely effects of system flips and discontinuity. The ultimate goal of this suite is to quantify impacts of climate change mitigation policies across economic and social sectors, while explicitly tracing feedbacks across scales and between systems, and accounting for nonlinearities in socio-economic systems.

  1.  FUND (the Climate Framework for Uncertainty, Negotiation and Distribution) is an integrated assessment model linking projections of global populations, economic activity and emissions to a simple carbon cycle and climate model, and to a model predicting and monetizing welfare impacts caused by climate change.

  2. GCAM (Global Change Assessment Model) is a dynamic-recursive integrated assessment model with technology-rich representations of the economy, energy sector and land use linked to a climate model that can be used to explore climate change mitigation policies including carbon taxes, carbon trading, regulations and accelerated deployment of energy technology.

  3.  EXIOMOD model combines the main structure of traditional CGE analysis with the innovative elements of semi-endogenous growth under the framework of Dynamic Stochastic General Equilibrium. All main behavioral equations of the model have been estimated econometrically based on the available time-series data. The model incorporates the representation of 43 large economies. It includes an individual representation of all EU27 countries and candidate member states. It also includes the largest emitters such as US, Japan, Russia, Brazil, India and China.

  4.  RHOMOLO regional-economic model implemented at the level of NUTS2 regions for all EU27 countries. The model integrates economic, environmental, energy and social dimensions in one unified framework. RHOMOLO is especially developed for an ex-ante impact assessment of the European Cohesion Policy (ECP).

  5.  MADIAMS is a system dynamics model that goes beyond the general equilibrium paradigm by explicitly taking into account the imbalances of supply and demand. The evolution of the economy is governed by the strategies of a few key economic actors (firms, households, investors, banks, governments, etc.), all of which strive to reach independent, often conflicting, goals.

  6.  Modeling of individual behavior using agent-based modeling (ABM): models economic systems as an adaptive complex system of many interacting heterogeneous agents. Agents can represent real stakeholders, such as households, firms, farmers, various governmental institutions. While economic models described above are best suited to track the macro-costs of mitigation policies, direct and indirect effects of policies across multiple markets, key economic sectors, and countries, they exhibit certain limitations.   

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