18th Ruhr Graduate Summer School

Economic Analysis of Net-Zero Emissions Policies Using GAMS and MPSGE

To combat climate change, many countries have committed to achieving net-zero emissions by 2050. The successful transition towards a zero-emission economy will depend on the ability to power energy-related processes with electricity from carbon-free renewable energy sources.

This workshop will present state-of-the-art computable general equilibrium (CGE) models that are widely used in applied economic research to study the impacts of emissions reductions policies. The standard topdown framework of CGE models will be complemented by a bottom-up representation of the electricity system to capture the pivotal role of carbon-free supply and demand technologies for decarbonizing the economy as a whole.

The course will build on seminal peer-reviewed publications combining methodological expertise on hybrid bottom-up/top-down modeling with policy-relevant applications, ranging from technology-specific regulations (e.g. green subsidies, renewable portfolio standards, energy efficiency standards, technology bans) to economy-wide emissions pricing and revenue-rebating schemes (green tax reforms). Guided by a series of lectures and hands-on modeling exercises, participants will develop step by step the capacity to re-formulate model codes towards their own needs in academic research or policy consultancy.

Mathematically, the models are formulated and implemented as so-called “mixed complementarity problems” (MCP), stating complementarity of economic equilibrium conditions with associated economic decision variables. The fundamental strength of the MCP format (beyond the standard approach of treating equilibrium conditions as a system of nonlinear equations) is the ability to handle corner solutions and regime shifts that are central to the analysis of sorting decisions, such as discrete technology choices.

For the computer implementation of the numerical models the course uses the high-level programming language GAMS (Generalized Algebraic Modeling System) whose notation closely follows standard matrix algebra. The fundamental strength of GAMS lies in the ease with which mathematically defined models can be formulated and solved.

Instructors:

Christoph Böhringer

University of Oldenburg, Germany

Volker Clausen

University of Duisburg-Essen, Germany

Please contact the course coordinator if you have any questions: M. Sc. Ioannis Arampatzidis University of Duisburg-Essen Department of Economics 45117 Essen, Germany Telephone: +49 (0)201-18-32310 Fax: +49 (0)201-183-3974 email: ioannis.arampatzidis@vwl.uni-due.de

The registration deadline is September 6, 2024.

More information and registration