to Assess Climate Change Mitigation International Energy Workshop, Paris, June 2013

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1 Decomposng he Global TIAM-Maco Maco Model o Assess Clmae Change Mgaon Inenaonal Enegy Wokshop Pas June 2013 Socaes Kypeos (PSI) & An Lehla (VTT)

2 2 Pesenaon Oulne The global ETSAP-TIAM PE model and he Maco GE model Lnkng TIMES wh Maco Man feaues of TIAM-Maco Quadac Supply Cos Funcons (QSF) The Maco-Sand-Alone model Calbaon algohm Employng Negsh welfae weghs Decomposon algohm Illusave clmae polcy analyss case Pefomance of he algohm Conclusons and fuue wok

3 3 The Global ETSAP-TIAM PE Model and he Maco GE Model ETSAP-TIAM: A global mul-egonal paal equlbum model Based on he TIMES enegy sysem modelng ools of IEA-ETSAP ETSAP 15 wold egons wh ade n enegy commodes Dealed n echnology epesenaon n all secos Own pce elasces fo useful enegy demand Maxmzes he cumulave dscouned suplus of cons. & pods. Inegaed clmae module fo assessng clmae mpacs MACRO: An opmal gowh dynamc geneal equlbum model Ogns n he Ea-Maco model by Alan S. Manne A sngle-seco neoclasscal opmal gowh model.e. a dynamc ne-empoal GE model Maxmzes he cumulave dscouned uly of a genec consume

4 4 Lnkng TIMES and Maco Had-lnkng: dec negaon of daa and funconal elaonshps n a sngle negaed modelng famewok: E.g. MARKAL-Maco TIMES-Maco TIMES+Mege Sof-lnkng: combned use of wo models ha have been developed d ndependenly d fom anohe and can be un sand-alone Usually heeogeneous n complexy and accounng mehods E.g. TIAM + GEMINI-E3 GTAP-E Ialy + MARKAL-Ialy ec. Hybd lnkng based on decomposon: Dec negaon n a sngle conssen modelng famewok Soluon by usng a decomposon algohm TIAM-Maco (compaable mplemenaon: Message-Maco)

5 5 Man Feaues of TIAM-Maco Chaacescs of he negaed model: A global mul egonal LP-fomulaed enegy sysem model fully negaed wh an NLP maco-economc model A hybd gowh model combnng boom-up & op-down appoaches n a conssen famewok Povdes Paeo opmal soluons fo second-bes polces maxmzng he Negsh-weghed global welfae Includes ade n enegy commodes (ol gas synhec fuels coal bo-fuels) n CO 2 pems and n he numéae good epesenng all ohe non-enegy expos Hybd lnkng of TIAM and Maco based on decomposon: Solved eavely by decomposng he oveall model no LP and NLP sub-poblems

6 6 D f h Q d S l F Defnng he Quadac Supply Funcons (QSF) As he enegy sysems n TIAM and n TIAM-Maco ae he same he full TIAM can be eplaced by a QSF defned as: ( ) sa e e u ca be ep aced by a QS de ed as 2 EC The devave of he Enegy Cos EC wh espec o demand defnes he equlbum pce P a he TIAM soluon: 2 / P P EC 2 2 EC EC

7 7 The TIMES-Maco Sand-Alone Model Maxmze he global welfae U defned as he Negsh-weghed cumulave dscouned log of egonal consumpon: T Max U nw pw ln( C ) e 1 Subjec o he followng consans: Poducon funcon : Use of oupu : Capal fomaon funcon : Temnal condon fo las peod T : The quadac supply funcon : Demand decouplng facos : Y Y K K T EC ) a C K I (1 ) ( g T Global ne expos NTX mus balance: NTX N D d K L EC T ) 1 (1 ) 1 I 0.5 N T b NTX ( nm) (1 ddf 0 ; d 2 ) N ( I D 1/ (1 ) N I 1 )

8 8 Calbaon Algohm fo TIAM-Maco Calbaon of he demand decouplng facos (DDFs) s based on he followng decsons / obsevaons (Kypeos 1996): The enegy sysem n TIAM and TIAM Maco should be he same The enegy sysem n TIAM and TIAM-Maco should be he same The followng wo equaons (defnon of DDF and he fs ode maxmzaon condon of CES) can be solved fo he unknown DDF facos: ) 1 ( 1 N P F D ddf D Ieaon beween he wo models no necessay fo calbaon ddf b P Y F y bu he TIAM-LP Baselne needs o solved only once The Maco model needs o be solved eavely unl he DDF facos and labo gowh aes convege

9 9 Defnng he Negsh weghs The nal Negsh weghs ae popoonal o he cumulave and dscouned GDP pe egon To balance fo ne-empoal ade defcs ove me we adjus he weghs n an eave fashon followng T. Ruhefod Use he nomalzed pce of he aded poducs and he nvese of he magnal egonal uly.e. he egonal consumpon: ' d d nm / 1 nm NW nw d NW d NTX d ' k C ' nm / k NW The pce of he numéae good s esmaed n Maco whle he pces of aded enegy commodes ae esmaed n TIAM.

10 10 Decomposon Algohm Solvng he Baselne Calbaon: Fs solve TIAM as LP defnng he Quadac Supply Funcons (QSF) fo he useful enegy demands n all egons Nex defne he nal DDF and labo gowhs and solve he Maco model wh he QSF as an NLP welfae maxmzaon poblem Then eae adjusng fo DDF labo gowhs and he Negsh weghs unl demands and gowhs sablze ogehe wh he NW Solvng he Polcy Scenaos: Fs solve he paal equlbum TIAM unde polcy consans and calculae nal QSFs fo he Maco sub-model Nex solve he Maco sub-poblem applyng he calbaed DDFs and labo gowh aes devng adjused demand levels Then eae beween he TIAM LP and Maco NLP sub-poblems unl he demand levels and Negsh weghs sablze

11 11 Clmae Polcy Tes Case The hybd model esed wh global TIAM scenaos unl 2060 unde wo dffeen Clmae Polcy cases: A: Regonal ages fo CO 2 emssons oughly esemblng he long-em pledges vaous counes have pesened B: Global age on maxmum level of adave focng oughly coespondng o he 550 ppm concenaon lm age 40% Case A Case B 80% 20% 0% -20% -40% -60% -80% -100% Fom % 40% 20% 0% -20% -40% -60% -80% -100% AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU

12 Clmae Polcy Tes Case: Evoluon of Radave Focng Baselne Foc cng W/ /m Case A Case B

13 13 Case A Clmae Polcy Tes Case: GDP Loss Compaed o Baselne 0% 1% 2% 3% 4% 5% 6% Case B 0% 1% 2% 3% 4% 5% AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU

14 14 Clmae Polcy Tes Case: Impacs on Annual Enegy Sysem Coss Case A Case B -8% -6% -4% -2% 0% 2% 4% 6% 8% -8% -6% -4% -2% 0% 2% 4% AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU AFR AUS CAN CHI CSA EEU FSU IND JPN MEA MEX ODA SKO USA WEU

15 15 Pefomance of he Algohm Tes T uns wh subses of he ETSAP-TIAM TIAM model ( 2060): Sngle-egon model fo he USA (un also wh TIMES-Maco) Sx-egon model (EEU + WEU + USA + AFR + CHI + MEA) Ten-egon model (6 above + JPN + CSA + IND + ODA) Full 15-egon model (10 above + AUS + CAN + FSU + MEX+ SKO) The USA model esuls valdaed well agans TIMES-Maco Tes esuls ndcae ha TIMES-MSA may be even 100 mes fase han he had-lnked TIMES-Maco (~170 mn. fo USA) TIAM-Maco Model sze Run me (mnues) Tes model Equaons Vaables Calbaon Polcy un TIAM-USA <1 2 TIAM-6R TIAM-10R TIAM-15R (Wndows 7 64-b woksaon soluon n sngle head)

16 16 Conclusons and Fuue Wok Key accomplshmens: Any TIMES-Maco models can now be calbaed and solved effcenly jus by acvang a swch n he model un and by defnng a few macoeconomc npu paamees Fo he fs me he Global TIAM-Maco can be solved effcenly o ge Paeo opmal soluons fo second-bes polces wh full echnologcal deals by egon fom TIAM Updae of Clmae Module lneazaon dung algohm Possble fuue wok: Add an opon o nclude also (non-lnea) damage coss fom clmae change n he global welfae maxmzaon Implemen MSA usng MCP fomulaon nsead of NLP Deve esmaes of elascy effecs fo TIAM PE fomulaon

17 Thank You! 17

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