Abatement of Emissions
Development of the GreenREFORM sub-model for reduction of energy consumption and abatement of emissions through transition to new cleaner technologies is described below.
GreenREFORM must include a detailed description of the different pollution reduction methods available through investment in specific technologies. Where possible, GreenREFORM will employ existing forecasts and technology catalogues, which describe such technologies. GreenREFORM must endogenously describe how new cleaner technologies can displace existing technologies over time, depending on the policies in place.
GreenREFORM will employ experts’ judgements of costs and potentials of new clean technologies. It is not within the scope of the project to collect novel information about new technological abatement methods.
The sub-model for technological abatement methods focuses on the parts of the economy, which are not related to energy supply, agriculture or transportation. This sub-model is therefore used to give a more detailed description of abatement in the rest of the economy. Technology catalogues are also used in the other sector-specific sub-models, i.e. the agriculture, transportation and energy sub-models. The use of these technology catalogues is described on the respective sub-model webpages and in the associated documentation reports.
As part of the development of GreenREFORM, new methods are being designed for integration of technology catalogues with general equilibrium models. These methods are being developed by Jonathan Leisner (University of Copenhagen), August Twile Nielsen (University of Copenhagen), Rasmus Kehlet Berg (University of Copenhagen) and Peter Stephensen (DREAM). The model group in DREAM is assisting with technical expertise, data collection and processing, as well as with the integration of these new methods into the final model.
Modelling of Technological Abatement Possibilities
Firms have three main methods for reducing their emissions:
- Output reductions: If a firm produces less output, it will typically also reduce its consumption of energy and material inputs, thereby reducing emissions.
- Input substitution: Firms can in some cases reduce their consumption of emissions-producing energy and material inputs by, for example, investing in more energy efficient machinery or restructuring their production process, such that it requires less energy.
- End-of-pipe technologies: In some cases it is possible to reduce the level of emissions resulting from a given production, without actually changing the production process. Such reductions are typically known as end-of-pipe reductions. An example of this type of reduction is the implementation of a filter in the chimney of a power plant, which reduces the amount of particulate pollution or collects CO2 from the smoke, thereby reducing greenhouse gas emissions.
A classic general equilibrium model already has output-reduction and input-substitution built into the model structure. GreenREFORM must therefore add modelling of end-of-pipe technologies. The goal is also for GreenREFORM to model input-substituting technologies in greater detail than in regular general equilibrium models.
End-of-pipe technologies are characterized by the fact that they can reduce a share of a firm’s emissions for some price per unit. A new method for integrating this type of technology with a general equilibrium model has been developed for GreenREFORM. This method is described in a brief documentation report and an example of how it is used in practice is also available for download.
See the documentation report
See example code
Refining the modelling of input-substituting technologies can also be done using a similar method. The method is described in general terms in the following paper.
Link to paper about input-displacing abatement
Integration of input-displacing technologies in GreenREFORM is described in a separate note (work in progress).