Macro-EconomicEffectsofEnergyTransitions

Previous UKERC research lead to substantial advances in modelling, particualrly in helping to develop a detailed understanding of the structure of the UK economy over the past 20 years. Multi-regional IO models were developed that map the flow of resources and energy through global supply chains to allow a detailed understanding of the energy demand required to deliver final goods and services. The application of this provided analysis of the effectiveness of UK energy policy in an increasingly globalised energy system and had direct measureable impact on UK energy and climate policy. In collaboration with the Resources and Vectors programme this project will further develop these models to develop forecasting capabilities and broaden the range of indicators to track the macro-economic effects of low carbon transitions. By further developing the IO framework, the research will provide a detailed picture of industrial supply chains for different energy system configurations and incorporate them into a macro-economic model of the UK, such that the economic benefit of developing these supply chains can be clearly assessed. This will allow analysis of the economic growth implications and employment of low carbon energy transitions, providing a detailed picture of the structural changes and changes in demand for goods and services. This project will use the jointly developed model to explore wider policy options that affect energy demand and emissions. These could include policies and strategies related to resource efficiency, regulation for products with carbon intensive supply chains, spatial and infrastructure planning and tax and trade policy, clean development mechanisms to name a few.