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Simulating emissions intensity targets with energy economic models: algorithm and application

Author

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  • Yiyong Cai

    (Commonwealth Scientific and Industrial Research Organisation (CSIRO)
    Australian National University)

  • Yingying Lu

    (Shanghai University, Economics and Management Building)

  • Alison Stegman

    (Australian National University)

  • David Newth

    (Commonwealth Scientific and Industrial Research Organisation (CSIRO))

Abstract

Pressure on developing economies to make quantifiable emissions reduction commitments has led to the introduction of intensity based emissions targets, where reductions in emissions are specified with reference to some measure of economic output. The Copenhagen commitments of China and India are two prominent examples. Intensity targets substantially increase the complexity of policy simulation and analysis, because a given emissions intensity target could be satisfied with a range of emissions and output combinations. Here, a simple algorithm, the Iterative Method, is proposed for an energy economic model to find a unique policy solution that achieves an emissions intensity target at minimum economic loss. We prove the mathematical properties of the algorithm, and compare its numerical performance with other methods’ in the existing literature.

Suggested Citation

  • Yiyong Cai & Yingying Lu & Alison Stegman & David Newth, 2017. "Simulating emissions intensity targets with energy economic models: algorithm and application," Annals of Operations Research, Springer, vol. 255(1), pages 141-155, August.
    • Handle: RePEc:spr:annopr:v:255:y:2017:i:1:d:10.1007_s10479-015-1927-0
    DOI: 10.1007/s10479-015-1927-0
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    References listed on IDEAS

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