Keywords
climate change; mitigation; carbon tax; economic growth; system dynamics
Location
Session H4: Modeling for Low Carbon Economies
Start Date
19-6-2014 10:40 AM
End Date
19-6-2014 12:20 PM
Abstract
For a comprehensive analysis of climate mitigation policies, Integrated Assessment models (IAMs) of the coupled climate-socioeconomic system are needed. However, while there is general agreement on the physics of the climate system, the dynamics of the socioeconomic system is still the subject of considerable controversy. This has become particularly apparent since the recent global financial crisis. To explore the dynamics of the socio-economic system, a family of socio-economic models is proposed that incorporates the various alternative assumptions regarding the behaviour of the different economic actors that govern the evolution of the socio-economic system. The model family needs to be developed both horizontally, to capture the proposed alternative actor strategies, and vertically, to enable successive layers of model complexity to be introduced, once the lower hierarchy levels have been adequately understood. Examples are the model family MADIAMS (a Multi-Actor Dynamic Integrated Assessment Model System), based on an out-of-equilibrium description of economic dynamics (no market clearing assumption), and an earlier prototype model SDEM (Structural Dynamic Economic Model). Depending on actor behaviour, alternative realizations of the MADIAMS family can yield stable economic growth, business cycles, boom-and-bust events, or pronounced recessions. The present paper extends the original prototype model SDEM to compute the long-term impact of strongly nonlinear climate change in combination with various climate mitigation strategies.
Included in
Civil Engineering Commons, Data Storage Systems Commons, Environmental Engineering Commons, Hydraulic Engineering Commons, Other Civil and Environmental Engineering Commons
Assessing the transition to a low-carbon economy using actor-based system-dynamic models
Session H4: Modeling for Low Carbon Economies
For a comprehensive analysis of climate mitigation policies, Integrated Assessment models (IAMs) of the coupled climate-socioeconomic system are needed. However, while there is general agreement on the physics of the climate system, the dynamics of the socioeconomic system is still the subject of considerable controversy. This has become particularly apparent since the recent global financial crisis. To explore the dynamics of the socio-economic system, a family of socio-economic models is proposed that incorporates the various alternative assumptions regarding the behaviour of the different economic actors that govern the evolution of the socio-economic system. The model family needs to be developed both horizontally, to capture the proposed alternative actor strategies, and vertically, to enable successive layers of model complexity to be introduced, once the lower hierarchy levels have been adequately understood. Examples are the model family MADIAMS (a Multi-Actor Dynamic Integrated Assessment Model System), based on an out-of-equilibrium description of economic dynamics (no market clearing assumption), and an earlier prototype model SDEM (Structural Dynamic Economic Model). Depending on actor behaviour, alternative realizations of the MADIAMS family can yield stable economic growth, business cycles, boom-and-bust events, or pronounced recessions. The present paper extends the original prototype model SDEM to compute the long-term impact of strongly nonlinear climate change in combination with various climate mitigation strategies.
