Representing energy technologies in top-down economic models using bottom-up information

Energy Economics, Vol 26, Issue 4, pp 685-707 (2004)

Published July 2004

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The rate and magnitude of technological change is a critical component in estimating future anthropogenic carbon emissions. We present a methodology for modeling low-carbon emitting technologies within the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium (CGE) model of the world economy. The methodology translates bottom-up engineering information for two carbon capture and sequestration (CCS) technologies in the electric power sector into the EPPA model and discusses issues that arise in assuring an accurate representation and realistic market penetration. We find that coal-based technologies with sequestration penetrate, despite their higher cost today, because of projected rising natural gas prices.

MITEI Authors

John Reilly Senior Lecturer

MIT Joint Program on the Science and Policy of Global Change; Sloan School of Management

Howard Herzog Senior Research Engineer

MIT Energy Initiative