Application of an optimisation model to studying some aspects of Russia's economic development

Abstract

The global climate change is one of the most important and disputable problems in the modern world. The Kyoto Protocol is an effort of the international community to control environmental impacts. To study pros and cons of Russia's participation in this initiative, different integrated assessment models for evaluating greenhouse gases (GHG) reduction policies can be engaged. In the present paper, an approach to modelling is briefly described and some simulation results are discussed. The emphasis is on obtaining the 'optimal' temporal dynamics of economic-energetic indices for different scenarios of Russia's development. The main result shows that, in the first commitment period of the Protocol, GHG emissions in Russia can reach the critical level in some extreme cases.

Application of integrated assessment model MERGE to studying ecological-economic indices

“…The adaptation of the model to the current state of the world and regional economy included (i) changes in the mathematical procedures for simulating specific features of the economic dynamics (for example, for taking into account the worldwide recession, mutual trade restrictions due to sanctions, and green characteristics); (ii) the usage of new input data (macroeconomic parameters, energy indices, reserves of fossils and so on) from modern sources (Rosstat 2016;WB 2015;EIA 2014;CIA 2013) for constructing scenarios corresponding to the modern multivariate geopolitical situation; (iii) a new, in comparison with the classical version (Manne et al 1995;Manne 2003;Kryazhimsky et al 2005;Digas and Rozenberg 2010), division of the heterogeneous world into regions basing on last tendencies of the economic development. The main changes in the algorithmic part were described in the previous section; therefore, we comment the latter two points.…”

“…This model was well recommended during the debate in Russia about costs and benefits of being a party to the Kyoto Protocol. It was elaborated by American scientists (Manne 2003;Manne et al 1995) and was modified at the International Institute of Applied Systems Analysis (Laxenburg, Austria) and the Institute of Mathematics and Mechanics, Ural Branch of RAS (Yekaterinburg, Russia), see Kryazhimsky et al 2005, Digas and Rozenberg 2010, 2013, Digas et al 2014. According to the commonly adopted classification (Weyant 1996), MERGE belongs to policy optimization IAMs, which optimize key policy control variables such as carbon emission rates and/or carbon taxes, time frames for implementing new technologies and so on.…”

On the optimal control problem for two regions’ macroeconomic model

“…satisfying the system (1) and ensuring the fulfillment of restrictions (2). Here ( ) r d t is a coefficient which represents the social discount factor and the economic loss factor due to the impact of climate change, the functions ( ) r d t are assumed to be given, and…”

“…For the solution of this problem methods of concave optimization may be used [3,11]. In this case we shall construct an optimal control by investigating the restrictions (2). Let w we assume that they can be selected as the boundary values of intervals (6), (2) or as values defined by the formulas (19) respectively.…”

“…Of course, human economic activities have an impact on environmental and social systems of regions, but the assessment of this impact seems to be quite a difficult problem in conjunction with the climate changes. The integrated assessment models are used for research and forecasting of changes of various region characteristics; one of them is the MERGE proposed in [5,6] and modified in the works [2,7]. This model is a framework for research of climate changes and an assessment of their impact on the development of social-economic systems of regions.…”