ICES has also been used to assess the macroeconomic costs of mitigation policies from the 2009 Copenhagen accord (Conference of the Parties -COP- XV) to the most recent 2015 Paris agreement (COP XXI). For this purpose, ICES takes advantage of two specific features: a policy module and an extended characterization of power generation.

The policy module makes it possible to achieve specific mitigation targets through a domestic cap on emissions/emission intensity (endogenous carbon tax) or carbon permit trade among all or some economic sectors and countries. Different initial permit allocation schemes can be performed: full auctioning, grandfathering (free allocation) and auctioning coupled with Border Tax Adjustments (BTA).

The penetration of renewable and clean energy technologies can be an opportunity to curb GHG emissions. For this purpose, wind, solar and hydro-electricity were split off from the original power sector, making it possible to substitute between renewable and traditional fossil sources for electricity production.  In addition, nuclear fuel was singled out as clean energy that can substitute fossil sources in energy production, and biofuels can be an alternative to petroleum products ( see Figure below, in green the new branches with clean energy technologies).


Figure: extended production tree

Other mitigation policies, such as emission reduction through credits on avoided deforestation, carbon sink due to afforestation and timber management, and a ban on illegal logging has also been explored with ICES.


Related publications:

Virdis M., Gaeta M., De Cian E., Parrado R. et al. (2015), “Pathways to Deep Decarbonization in Italy“, SDSN – IDDRI.

D. A. Raitzer, F. Bosello, M. Tavoni, C. Orecchia, G. Marangoni, and J. N. G. Samson (2015), “Asia and the economics of climate stabilization”, Asian Development Bank, Mandaluyong City, Philippines

Lennox J., Parrado R. (2015), “Capital-embodied Technologies in CGE Models” FEEM Note di Lavoro 2015.002

Bosello F., Parrado R. Rosa R., Eboli F., (2015), “REDD in the Carbon Market: A general equilibrium analysis”, Environmental Modeling & Assessment, 20 issue 2, pp 103-115. Supersedes FEEM Note di Lavoro 2010.142

Parrado R., De Cian E. (2014) “Technology spillovers embodied in international trade: Intertemporal, regional and sectoral effects in a global CGE framework“, Energy Economics, 41(2014): 76-89. Supersedes   FEEM Note di Lavoro 2012.027

Bosello F., Parrado R., Rosa R., (2013) “The Economic and Environmental Effects of an EU Ban on Illegal Logging Imports. Insights from a CGE Assessment“, Environment and Development Economics, 18(02): 184-206. Supersedes FEEM Note di Lavoro 2010.67

Bosello F., Campagnolo L., Carraro C., Eboli F., Lanzi E., Parrado R., Portale E. (2013), “Macroeconomic Impacts of the EU 30% GHG Mitigation Target“, FEEM Note di Lavoro 2013.28

Orecchia C., Parrado R. (2013), “A Quantitative Assessment of the Implications of Including non-CO2 Emissions in the European ETS“, FEEM Note di Lavoro 2013.100

Bosello F., Campagnolo L., Eboli F., Parrado R., (2012), “Energy from Waste: Generation Potential and Mitigation Opportunity“, Environmental Economics and Policy Studies, 14(4), 403-420.

Michetti M., Parrado, R. (2012), “Improving land-use modelling within CGE to assess forest-based mitigation potential and costs“, FEEM Note di Lavoro 2012.19

Michetti M., Rosa R., (2012).”Afforestation and Timber Management Compliance Strategies in Climate Policy. A Computable General Equilibrium Analysis“, Ecological Economics, 77, 139–148

Related projects:

Evaluation of the GHGs effect of the EU legislation on Banning Illegal timbeR from the EU market. A quantitative analysis using the ICES model – BIRCHRegulation of Air Pollution and Economic Growth in Ukraine: A General Equilibrium Approach – CGEUKRDYNAmic policy MIXes for absolute decoupling of environmental impact of EU resource use from economic growth – DYNAMIXStrengthening Planning Capacity for Low Carbon Growth in Developing Asia –  ADB, Energy from waste: an assessment of the contribution to climate change mitigation policies in Italy – E=mc2.


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Last update on September 20, 2017