Research project CP/24 (Research action CP)
Context
Climate change is and remains a high priority research theme because an efficient and effective international and national climate policy is a necessary condition for sustainable development. When current greenhouse gas (GHG) emission patterns continue unchecked, projected climate change will cause considerable damages to both natural and human systems, as stressed by the new IPCC Third Assessment Reports. According to these reports, there is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities and that human influence will continue to change atmospheric composition throughout the 21st century. During the last couple of years also the Belgian policy maker has increasingly recognised the importance of the climate change problem in relation to sustainable development.
Project description
Objectives
The aim of the CLIMNEG II project is to characterise theoretically and to simulate numerically the economic and climate change consequences of different greenhouse gas (GHG) emission reduction policies on the global, European and Belgian level. This exercise requires a coupling of a long-term economic model with a simplified but reliable representation of the climate system. The results and conclusions of this multidisciplinary research can serve as input and background information for the Belgian team participating in international climate negotiations.
Methodology
The research project is an exercise in integrated assessment analysis, i.e. it looks at the problem of climate change from a broad perspective in order to fully appreciate the numerous and complex interactions between the many economic actors (consumers, producers, national governments, supranational organisations) and the complex physical environment they are operating in. This broad perspective is reflected in the extensive geographical coverage, the extensive time horizons considered, and the variety of policy questions it considers. The core of the project consists of a set of numerical simulation models, each with a specific scope and level of detail.
Interaction between the different partners
In order to enhance communication between the different scientific disciplines and to cover the broad menu of research and policy questions, the network will use mathematical modelling as a common research language.
Expected results
The CLIMNEG II project is organised around three major research themes. In the first major research theme of the proposal, criteria for sustainable development, we want to operationalise the concept of sustainable development in the context of climate change. The project will not provide a definite answer to the difficult question of defining sustainable development. Instead, the analysis will identify minimal requirements (necessary but probably not sufficient conditions) a sustainable economic development should satisfy. These conditions will be derived from a theoretical welfare economic analysis of the trade off between the fundamental concepts of (1) economic efficiency, (2) environmental sustainability, (3) intragenerational and intergenerational equity, and (4) implementation and strategic stability of post-Kyoto climate agreements.
The second major research theme will focus on climate policy instruments and in particular on the combination of tax instruments and emission trading, the microstructure, initial allocation and trading rules of GHG emission permit markets. For the purpose of this research theme, a portable simulation tool will be developed for analysis of GHG emission trading under different institutional regimes (number of participants, trading ceilings, banking, market power etc.).
Thirdly, the CLIMNEG II project contains an important integrated assessment modelling effort. The project will refine and update several models that are currently available in the network (the integrated assessment model CLIMNEG World Simulation CWS model, the general equilibrium model GEM-E3). In particular, the emissions of non-CO2 greenhouse gases and their emission reduction costs will be incorporated in the models. In addition, the project will create "soft links" between the different models in order to achieve consistency between the different levels of analysis. For the integrated assessment aspect of the project, interdisciplinary contributions from climatology are called upon. Concerning climatology, the CLIMNEG II proposal will refine the carbon cycle and regional temperature change module of the existing CWS model by allowing for a multi-gas approach and by adding a sea-level module. The climate team will also contribute to the identification of criteria for sustainable development by providing a family of GHG emission trajectories leading to a stabilisation of GHG concentrations at levels that prevent irreversible damage to the Earth’s ecosystems. Finally, the project will consider the possibility of linking a medium sized physical model (MoBidiC) to a general equilibrium model of the world economy (GEM-E3-WORLD).
One of the innovative aspects of the CLIMNEG II project is the development of a new simulation model based on the concept of overlapping generations. A model with overlapping generations explicitly takes into account the fact that members of future generations are not present when decisions are taken, that can have a large impact on those future generations. We will incorporate a climate module in a model with overlapping generations in order to examine the possible co-operation between countries with respect to climate policy. Finally, the overlapping generations framework allows to refine the micro-economic relations, taking into account private intergenerational altruism. Intergenerational altruism will have important consequences for the intergenerational transfers organised by the government. It also allows to study questions of political economy in general and of the role of climate policy instruments in the context of public finances.
Partners
Activities
The CLIMNEG II network brings together four different university teams, each with a specific expertise: (1) UcL-ASTR (Prof. J.-P. van Ypersele, climatology), (2) KULeuven-CES-ETE (Prof. S. Proost, coordinator, economic simulation models, economic theory and economic philosophy), (3) UcL-CORE (Prof. C. d’Aspremont, economic theory, game theory) and (4) UcL-CORE (Prof. Bréchet, environmental economics and modelling). The four teams will contribute to three different research themes: (1) Criteria for Sustainable Development, (2) Climate Policy Instruments and (3) Integrated Assessment Modelling as to enhance interdisciplinary exchange and team interactions. The results of the three research themes will be integrated into the simulation models (see flow chart below).
Contact Information
Promoter
Stef Proost
Katholieke Universiteit Leuven
Centrum voor Economische Studiën - Working group Energy, Transport and Environment (KULeuven-CES-ETE)
Naamsestraat 69, B-3000 Leuven
Tel: +32 (0)16 32 68 01; Fax: +32 (0)16 32 69 10
stef.proost@econ.kuleuven.ac.be
http://www.kuleuven.ac.be/ete
Partners
Jean-Pascal van Ypersele
Université Catholique de Louvain
Institut d’Astronomie et de Geophysique Georges Lemaître (UcL-ASTR)
Bâtiment Marc de Hemptine
2, chemin du Cyclotrone, B-1348 Louvain-la-Neuve
Tél: +32 (0)10 47 32 97; Fax: +32 (0)10 47 32 97
vanypersele@astr.ucl.ac.be
http://www.astr.ucl.ac.be
Claude d’Aspremont
Université Catholique de Louvain
Center for Operations Research and Econometrics (UcL-CORE)
34, voie du Roman Pays, B-1348 Louvain-la-Neuve
Tel: +32 (0)10 47 43 21; Fax: +32 (0)10 47 43 01
daspremont@core.ucl.ac.be
http://www.core.ucl.ac.be
Thierry Bréchet
Université Catholique de Louvain
Center for Operations Research and Econometrics (UcL-CORE)
34, voie du Roman Pays, B-1348 Louvain-la-Neuve
Tel: +32 (0)10 47 81 86; Fax: +32 (0)10 47 43 01
brechet@core.ucl.ac.be
http://www.core.ucl.ac.be/chlhoist
Users Committee
- Jacques Baveye - SPF Finances - Service Etudes et Documentation - Bruxelles
- Thomas Bernheim - Federaal Planbureau - Task Force Duurzame Ontwikkeling - Brussel
- Stéphane Cools - Ministère de la Région Wallonne - Direction générale des Ressources Naturelles et de l’Environnement (DGNRE) - Namur
- Christian Ferdinand - SPF Economie, PME, Classes moyennes et Energie - Bruxelles
- Gabriel Michaux - SPF Economie, PME, Classes moyennes et Energie - Energy Policy Division - Bruxelles
- Olivier Parks - Ministère de la Région Wallonne - Direction générale des Ressources Naturelles et de l'Environnement (DGRNE) - Division de la prévention et des autorisations - Cellule Air - Jambes
- Karla Schoeters - Climate Network Europe - Brussel
- Peter Wittoeck - FOD Volksgezondheid, Veiligheid van de Voedselketen en Leefmilieu - Federale Diensten voor het Leefmilieu - Brussel
- Tomas Wyns - Ministerie van de Vlaamse Gemeenschap - AMINAL - Afdeling algemeen milieu en natuurbeleid - sectie Lucht - Brussel
Climate change, international negociations "Climneg II" : final report
Brussels : Belgian Science Policy, 2008 (SP1937)
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