GreenREFORM must be able to make environmental economic forecasts based on calculations from MAKRO, such as assessing how future economic development will impact the environment and climate and whether this development is compatible with the political goals within these areas. Consequently, GreenREFORM will to the extent possible build on the industry structure etc. in MAKRO.
The description of the production of and investment in new technologies will also be more complex than in MAKRO, to ensure that GreenREFORM can endogenously describe how new and cleaner technologies displace existing ones over time, depending on the policies in place. Where possible, GreenREFORM will use expert judgements in the form of various forecasts and bottom-up technology catalogues.
GreenREFORM will be a fully integrated model system. This means that the sub-models and the general equilibrium model interact with each other and are solved simultaneously, as opposed to a model system, where the sub-models are solved separately and then an iterative procedure searches for a combined solution. The purpose of developing a fully integrated model is intended to minimize the time required to perform counterfactual experiments and the desire for a fully consistent description of the interaction between sectors in the economy. This is, however, a challenge due to computational tractability of the model and because technical models in place today are typically incompatible with a general equilibrium model.
Where possible, the sub-models must use bottom-up data and the relevant conditions from technology catalogues. It is a goal to incorporate the technical knowledge and data, which within each area can be found in specialized technical models. In addition to limitations on resources and expert knowledge within the project group, the overall goal of a fully integrated model system is also a limiting factor in this regard. In practice, it must therefore be possible to adapt the baseline and marginal experiments to relevant external projections and expert judgements as required.
GreenREFORM must be able to describe the emission of pollutants in the Air Emissions Account produced by Statistics Denmark from all Danish businesses, households and the public sector. Further, the model should describe how emission coefficients are endogenously affected by changes to environmental taxes and other forms of regulation, affecting the cost of emissions. In addition to a detailed dataset, this requires a relatively comprehensive description of the taxation and subsidy systems.