Overview of Energy Modeling Forum

Process and Studies

4th Sino-Korea-U.S.
Economic and Environmental Modeling Workshop
Beijing, China

John P. Weyant
23-25 May 2001
 Outline
• EMF Objectives
• EMF Design Principles
• EMF Process
• EMF Studies
• EMF Study Examples
• EMF Contributions and Challenges
• Other Groups That Have Tried the EMF Approach
 Energy Modeling Forum
Objectives
• Understand Model Differences
• Understand Strengths and Weaknesses of Existing
Models/Methodologies
• Identify Useful Information and Insights for
Corporate Planning and Government Policy Making
• Identify High Priority Areas for Development of
New Data, Analyses, and Modeling Methodologies
• Ventilation: Communication of all the Above
 EMF Design Principles
• Broad Participation
• Focus on Model Comparisons
• Policy Relevance
• Decentralized Analysis
• Wide Dissemination of Results
 Structure of EMF Process
Revolves Around Working Groups

Experts Intergovernmental
EMF Working Panel on Climate
Modelers Group on Topic Change

Corporate & Council of Econo-

Policy Advisors mic Advisors

Stanford Corporate Affiliates

EMF Staff & Government
Sponsors
 Core EMF Process
• Meeting #1
– Identify Key Issues
– Design Initial Scenarios
– Organize Study Groups
• Meeting #2,…,#N-2
– Interpret Results
– Revise Issues/Scenarios/Study Groups

• Meeting #N-1
– Interpret Results
– Outline Final Report
• Meeting #N
– Review Draft Report
– Review Modeler & Study Group Reports
 EMF Studies
EMF 0: CONAES Modeling Group
EMF 1: Energy and the Economy
EMF 2: Coal in Transition
EMF 3: Electric Load Forecasting
EMF 4: Elasticity of Energy Demand
EMF 5: U.S. Oil and Gas Supply
EMF 6: World Oil
EMF 7: Macroecon. Impacts of Energy Shocks
EMF 8: Industrial energy Demand
EMF 9: North American Natural Gas
 EMF Studies (Continued)
EMF 10: Electric Markets and Planning
EMF 11: International Oil
EMF 12: Carbon Emission Reductions
EMF 13: Markets for Energy Efficiency
EMF 14: Integrated Assessment of Climate Change
EMF 15: Markets for Power
EMF 16: IA of Climate Change: Post-Kyoto
EMF 17: Prices/Emissions in Restructured Elec. Mkts.
EMF 18: Trade Dimensions of Climate Policy
EMF 19: Technology and Climate Policies
 Specific Objectives for EMF 19:
Technology and Climate Change Policy
• Understand How Technology/Technological
Change is Represented in the Models
– Production Functions
– Process Analyses
• Assess How These Assumptions Influence the
Results Obtained
– Model Comparisons
– Implications for Policy
• Help Improve This Dimension of the Models
– Coverage
– Numbers
– Formulations
 EMF 19 Study Groups
• Scenarios
– GDP & Economic Growth/Composition
– Energy Resources/Prices
– Technologies
• Technology Characterizations
– Comprehensiveness & Consistency
– Levels of Aggregation & Transfer Potential
– Uncertainty & Timing
• Modeling Technological Change
– Invention
– Innovation
– Diffusion
 Reference Case Primary Energy in 2100

1600

1400

1200

1000
Exajoules

Non-Fossil

800 Coal
Gas
Oil
600

400

200

0
MERGE AIM DNE2100 GRAPE MARIA MiniCAM EPPA
Model
 Primary Energy in 550 ppm Case in 2100

1600

1400

1200

1000
Exajoules

Non-Fossil
Coal
800
Gas
Oil
600

400

200

0
MERGE AIM DNE2100 GRAPE MARIA MIniCAM
Model
 EMF 19 Modelers Reference ---- China

7000
Carbon Generated (in million metric tons)

6000

5000

4000

3000

2000

1000

0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Year

SGM AIM EPPA GTEM DNE21 GRAPE MARIA MINICAM

 Year 2010 Carbon Tax Comparision for the
450
United States

400
(1990$US/metric ton)
350

300
Carbon Tax

250

200

150

100

50

G-Cubed
MIT-EPPA

SGM

WorldScan
MERGE3

RICE
ABARE-GTEM

MS-MRT
Oxford

AIM
CETA

Model
No Trading Annex I Trading Double Bubble Global Trading
 EMF-16

Cost of Carbon Emission Reductions in United States

450

400
(1990 $US/metric ton)

350 Why Higher? What do these

Carbon Tax

300 estimates mean

250
for corporate
Why Similar? strategies and public
200 policy?
150

100

50 Why Lower?
0
0 5 10 15 20 25 30 35 40 45 50

% Reduction in Carbon Emissions wrt Reference

 Conclusions From Mitigation Cost
Model Comparisons
• Five key factors help explain cost projections of
greenhouse gas emissions mitigation
? Three are external to the economic forecast -
baseline emissions, the policy regime considered,
and the benefits of emissions reductions

? While two factors are internal to the economic

forecast - economic substitution and technological
change
• Assumptions can influence costs considerably
within individual models and amongst many models
? Implementation will affect the degree to which
these costs are over or underestimated.
 Some Things Left Out
of Virtually all of These Models
• Economic Dis-Equilibrium Costs
• Costs of “Imperfect” Policies
• Market Power Rather Than Competitive Realities
• Value of Movements Toward the Efficient Frontier
• Induced Technological Change
• Richness in Representing Technology/Tech. Change
 Key EMF Roles
• Repository of Information About
Models/Modeling/Policy&Modeling
• Honest Broker
– Policy Developers
– Model Users
– Model Developers
– Model Funders
• Soft Model Assessment
• Spokesmen for Modeling Community
 Key EMF Challenges
• Model Comparison vs. Policy Analysis
– 30 Modeling teams
– 30 Sponsors
– 30 Experts
• Being Truly Interdisciplinary
• Avoiding Political Manipulation
• Degree of Ventilation vs. Model Assessment
Other Entities That Have Tried or
Considered the EMF Approach
• UN Global Modeling Forum
• EU Environment Division
• Canada
• Germany
• IPCC
• Japan
• France