GTAP-E: An Energy-Environmental Version of the GTAP Model

By T. Truong. GTAP Technical Paper Series, 2002

668 citations recorded by the source corpus.

Energy is an important commodity in many economic activities. Its usage affects the environment via CO2 emissions and the Greenhouse Effect. Modeling the energy-economy-environment-trade linkages is an important objective in applied economic policy analysis. Previously, however, the modeling of these linkages in GTAP has been incomplete. This is because energy substitution, a key factor in this chain of linkages, is absent from the standard model specification. This technical paper remedies this deficiency by incorporating energy substitution into the standard GTAP model. It begins by first reviewing some of the existing approaches to this problem in contemporary CGE models. It then suggests an approach for GTAP which incorporates some of these desirable features of energy substitution. The approach is implemented as an extended version of the GTAP model called GTAP-E, which includes the standard GTAP model as a special case. In addition, GTAP-E incorporates carbon emissions from the combustion of fossil fuels and this revised version of GTAP-E provides for a mechanism to trade these emissions internationally. The resulting behavior of agents in the model is analyzed using general equilibrium demand elasticities which summarize the combined effect of the new model specification. Implications for policy analysis are demonstrated via a simple simulation experiment in which global carbon emissions are reduced via a carbon tax. Results show that incorporating energy substitution into GTAP is essential for conducting analysis of this problem. The policy relevance of GTAP-E in the context of the existing debate about climate change is illustrated by some simulations of the implementation of the Kyoto Protocol. It is hoped that the proposed model will be used by individuals in the GTAP network who may not be themselves energy modelers, but who require a better representation of the energy-economy linkages than is currently offered in the standard GTAP model.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/c6451eb1a91549e91ab59fe4492ae45b9e79e13e

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Citations in the corpus

Examining the global environmental impact of regional consumption activities — Part 2: Review of input–output models for the assessment of environmental impacts embodied in trade (2007, background): “…GTAP-E is an extension of the standard GTAP model that adds a module for the substitution effects towards more energy efficient capital and a module of CO2 emissions resulting from the use of emission generating commodities in the production process (see Truong, 1999; Burniaux and Truong, 2002).”
Climate policy modeling: An online SCI-E and SSCI based literature review (2015, neutral): “Model Full name Authors Institute Model type Reference DICE Dynamic Integrated Model of Climate and the Economy William D. Nordhaus Yale University, USA Optimization [46] RICE Regional Integrated Model of Climate and the Economy William D. Nordhaus, Zili Yang Yale University, USA Optimization [47] F”
Validating Energy-Oriented CGE Models (2009, methodology): “The CGE model that will be examined here is the GTAP-E model, outlined in Burniaux and Truong (2002).”
The Effects of Climate Change on GDP by Country and the Global Economic Gains From Complying With the Paris Climate Accord (2018, methodology): “(The GTAP-E framework, Burniaux & Truong, 2002, is an extension of the GTAP model, Hertel, 1997, with more detailed energy inputs in the model’s production structure.)”
Water scarcity and the impact of improved irrigation management: a computable general equilibrium analysis (2011, methodology): “4 Burniaux and Truong (2002) developed a special variant of the model, called GTAP-E.”
The economic impact of more sustainable water use in agriculture: A computable general equilibrium analysis (2010, background): “2 Burniaux and Truong (2002) developed a special variant of the model, called GTAP-E.”
Indirect Land Use Change From Increased Biofuels Demand - Comparison of Models and Results for Marginal Biofuels Production from Different Feedstocks (2010, methodology): “The model version used for this study is LEITAP2 (an extended version of the original LEITAP1), which uses the carbon market and the rough characteristics of the production structure of the energyvariant of GTAP, GTAP-E (Burniaux and Truong, 2001; Truong, 2007), the international capital flow accoun”
Biofuels for all? Understanding the Global Impacts of Multinational Mandates (2008, methodology): “Specifically, we begin with the GTAP-E extension of the core model (Burniaux and Truong, 2002), which has been widely used for analysis of energy and climate change policies.”
The Long-Run Impact of Energy Prices on World Agricultural Markets: The Role of Macro-Economic Linkages (2009, methodology): “We depart from this textbook version by developing more relevant specifications for the agricultural sectors (following the GTAP-AGR specifications described in Keeney and Hertel, 2005) and for the energy sectors (following the GTAP-E specifications described in Burniaux and Truong, 2002).”