EnergyandEconomy

Modelling different energy pathways

The aim of the project is to understand further the relationship between energy use – its effects on the macro-economy and vice-versa – in light of environmental concerns. The work focuses on the effects of different energy pathways on (1) the global economy in light of the Paris Agreement, and (2) the UK economy under high and low GDP growth trajectories.

1. A focus on international climate policy

The development of a MACRO Stand-Alone module and its incorporation into the UCL global TIMES model (TIAM-UCL) means that insights can now be generated into the GDP implications of different climate and energy scenarios. The work considers the regional economic effects of achieving the Nationally Determined Contributions (NDCs) and long-term 2°C goal of the Paris Agreement. In particular, it considers the effects and extra costs where ratcheting of the NDCs is delayed to 2030, as well as how reduced technology costs may play a role in offsetting GDP impacts.

This work has led to a chapter on Negative Emissions Technologies in the ETSAP book titled Limiting Global Warming to Well Below 2°C: Energy System Modelling and Policy Development, published by Springer.

2. An analysis on how uncertain future UK economic trajectories may impact our ability to meet the carbon budgets

Using the UKTM model with MACRO Stand-Alone (and modelling capability from the University of Leeds), we explore the consequences for the UK of several different future economic pathways in terms of meeting its carbon budgets. In particular, we consider the implications of changes in energy demand in the UK and the extent this will impact the ease and/or difficulty of making carbon reductions, given prospective energy mixes, and consider the knock-on policy implications.

The UK work is carried out in cooperation with research under the Energy, Economy and Societal Preferences programme being undertaken at the University of Leeds. This provides opportunities for significant data sharing between the two institutions as well as a model result comparison in order to explore and understand how different approaches to modelling the UK economy and energy system may provide different answers to the same question.