Combination of Equilibrium Models and Hybrid Life Cycle Input-Output Analysis to Predict the Environmental Impacts of Energy Policy Scenarios

Abstract

Nowadays, many countries adopt an active agenda to mitigate the impact of greenhouse gas emissions by moving towards less polluting energy generation technologies. The environmental costs, directly or indirectly generated to achieve such a challenging objective, remain however largely underexplored. Until now, research has focused either on pure economic approaches such as computable general equilibrium (CGE) and partial equilibrium (PE) models, or on (physical) energy supply scenarios. These latter could be used to evaluate the environmental impacts of various energy saving or cleaner technologies via life cycle assessment (LCA) methodology. These modelling efforts have, however, been pursued in isolation, without exploring the possible complementarities and synergies. In this study, we have undertaken a practical combination of these approaches into a common framework: on the one hand, by coupling a CGE with a PE model, and, on the other hand, by linking the outcomes from the coupling with a hybrid inputoutput−process based life cycle inventory. The methodological framework aimed at assessing the environmental consequences of two energy policy scenarios in Luxembourg between 2010 and 2025. The study highlights the potential of coupling CGE and PE models but also the related methodological difficulties (e.g. small number of available technologies in Luxembourg, intrinsic limitations of the two approaches, etc.). The assessment shows both environmental synergies and trade-offs due to the implementation of energy policies. For example, despite the changes in technologies towards the reduction of greenhouse gas emissions, only marginal improvements are observed in the climate change mitigation scenario as compared to the business-as-usual. The energy related production and imports are indeed expected to increase over time and represent a large contribution to the country's impacts. Interestingly, side effects on other impacts than climate change or fossil resource depletion (e.g. ionising radiation and water depletion) may also occur mainly due to the use of nuclear energy in neighbouring countries.

Are decisions well supported for the energy transition? A review on modeling approaches for renewable energy policy evaluation

“…More recent is the third approach that combines bottom-up and top-down through the characteristics of market equilibrium models, called mixed complementary problems (MCP) [32,76] [85], and Barker et al [86] are case studies that used a hybrid modeling approach to evaluate renewable energy policies. They were used to evaluate the methodology of hybrid modeling approaches [31,32,[80][81][82][83][84][85][86].…”

“…Hybrid approaches are predominantly used to reduce drawbacks of a single modeling technique. They are highly able to model economy-wide effects of green energy policies because mainly an improved CGE approach is used as foundation [31,81,82]. In addition, environmental-wide effects shall be measured by using an approach that can derive changes to GHG emissions like life cycle assessment (LCA) [81].…”

Long Term Energy Transition Scenario Analysis for the City of Donostia

“…Although some recent studies identify the necessity of quantitative assessment methods based on the notion of multiple impact pathways, these frameworks are still in their infancy for cities. There are mainly applied nowadays in studies to conduct climate and energy policy analyses on a large scale [3,4]. Currently city energy planners need to combine various complex methodologies and tools with different time steps and scales, for which clear linkages are still unavailable.…”

Optimizing Human Resource Allocation in Organizations During Crisis Conditions: a P-graph Approach

“…It has been used for modeling industrial systems within an eco-industrial park to look at risk aspects in bioenergy parks (Benjamin et al 2015) and to develop adaptation strategies within industrial complexes or supply chains . It has also been used for modeling systems for sustainability to analyze the environmental impact of energy policies (Igos et al 2015), to assess the performance of various bioenergy technologies (Song et al 2015), to look into the water footprint of trade (Wang et al 2013) and to evaluate the risks associated with the adoption of biofuel blending policies in the context of climate change to name a few. Further extensions of the I-O model include the inoperability input-output model (IIM) which has been primarily developed for evaluating the impact of disasters on critical infrastructure systems (Haimes and Jiang 2001).…”