Policy advice for climate resilient economic development based on an E3 model built in Excel

This paper reports on the project “Policy advice for climate resilient economic development (CRED)” on behalf of GIZ (German Corporation for International Cooperation) which aims at (i) improving capacities on building economic models in three pilot countries namely Georgia, Kazakhstan and Vietnam with a focus on climate change, (ii) integrating the results of improved models in economic development strategies and policies as well as adaptation policies and (iii) to strengthen international exchange on these issues between e.g. governments and researchers. In the partner countries, a few environmental models exist but these are not linked to economic models and vice versa. Furthermore, many of these models do not sufficiently reveal their structure (“black box”) and thus can hardly be maintained or extended. The major challenge is to provide a state-of-the-art, science-based solution suitable for policy analysis which at the same time is sustainable so that local experts and researchers can cope with maintaining and enhancing the models independently with limited resources. In the project, an easy to learn yet powerful framework based on Visual Basic for Applications in Microsoft Excel is applied and trained in intensive courses. The framework allows for creating a macro-econometric Input-Output model covering economy, energy and environment (so called E3 models) and provides mechanisms for quickly calculating complex climate change and adaptation scenarios which can be developed also by non-model builders and stakeholders. Model builders must get acquainted to only one programming language to populate and enhance the provided model template and can reuse their Excel knowledge. The full data set, framework and model code as well as the scenarios are stored in just one Excel workbook allowing for easy distribution and evaluation.