Integrated Environmental Assessment of Future Energy Scenarios Based on Economic Equilibrium Models

Abstract

The future evolution of energy supply technologies strongly depends on (and affects) the economic and environmental systems, due to the high dependency of this sector on the availability and cost of fossil fuels, especially on the small regional scale. This paper aims at presenting the modeling system and preliminary results of a research project conducted on the scale of Luxembourg to assess the environmental impact of future energy scenarios for the country, integrating outputs from partial and computable general equilibrium models within hybrid Life Cycle Assessment (LCA) frameworks.The general equilibrium model for Luxembourg, LUXGEM, is used to evaluate the economic impacts of policy decisions and other economic shocks over the time horizon 2006-2030. A techno-economic (partial equilibrium) model for Luxembourg, ETEM, is used instead to compute operation levels of various technologies t o meet the demand for energy services at the least cost along the same timeline. The future energy demand and supply are made consistent by coupling ETEM with LUXGEM so as to have the same macro-economic variables and energy shares driving both models. The coupling results are then implemented within a set of Environmentally-Extended Input-Output (EE-IO) models in historical time series to test the feasibility of the integrated framework and then to assess the environmental impacts of the country. According ly, a disaggregated energy sector was built with the different ETEM technologies in the EE -IO to allow hybridization with Life Cycle Inventory (LCI) and enrich the process detail.The results show that the environmental impact slightly decreased overall f rom 2006 to 2009. Most of the impacts come from some imported commodities (natural gas, used to produce electricity, and metalliferous ores and metal scrap). The main energy production technology is the combined-cycle gas turbine plant "Twinerg", representing almost 80% of the domestic electricity production in Luxembourg. In the hybrid EE -IO model, this technology contributes to around 7% of the total impact of the country's net consumption. The causes of divergence between ETEM and LUXGEM are also thoroug hly investigated to outline possible strategies of modeling improvements for future assessment of environmental impacts using EE-IO. Further analyses focus first on the completion of the models' coupling and its application to the defined scenarios. Once t he coupling is consistently accomplished, LUXGEM can compute the IO flows from 2010 to 2030, while the LCI processes in the hybrid system are harmonized with ETEM to represent the future domestic and imported energy technologies.

Assessment of Life Cycle Impacts on Ecosystem Services: Promise, Problems, and Prospects

“…These so-called “rebound effects” are however judged critical for ES assessment, in particular with regard to biofuel supply chains. In this connection, integrated models that couple dynamic economic and ecological models could be used, ,, as well as scenario-based modeling (illustrated in Figure b), , although such approaches can propagate large uncertainties and hinder transparency. , …”

Structural change in the Chicago region and the impact on emission inventories in a continuous-time modeling approach

“…As the interactions between economic and environmental systems are becoming stronger and more apparent, anticipating and understanding environmental changes induced by economic activity is becoming increasingly challenging for both environmental scientists and economists and for policy makers who must ultimately choose strategies to balance risks and costs. Therefore, many researchers have turned to what are termed 'integrated assessment' frameworks, comprising both economic and environmental models, for the purpose of conducting simulations that might inform us about what environmental changes lie ahead if economic activity should follow particular paths (for example, see Igos et al 2015). The economic models employed in such frameworks are based on Abstract Motivated by both the need to model recent structural economic changes and the need to understand better the nature of environmental-economic interactions, this paper introduces a continuous-time regional econometric input-output model for the Chicago economy that can be used to analyze, at disaggregated sectoral and temporal levels, the economic and environmental implications of changes exogenous to the economy.…”

“…prevailing economic theories and include input-output models, national and regional macroeconomic models, and computable general equilibrium models (CGE) (Igos et al 2015). However, these economic models, which tend to be formulated in discrete time, can present difficulties both in linking with natural science-based models formulated in continuous time and in representing the ongoing development of environmental phenomena over time.…”