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Markal ‘‘most widely used’’ model, but...
A recent paper on
the use of economic models in climate change policy analysis declares
MARKAL “the most widely used” bottom-up model. The paper by The Royal
Institute of International Affairs also evaluates macroeconomic and general
equilibrium models which are usually specific to national economies. With
its application to many countries, MARKAL must then be the most widely
used of any economic model for climate change policy analysis.
Alas, the article fails to recognize that MARKAL-MACRO and MARKAL-MICRO
have now been developed to overcome what it describes as some of the limitations
of bottom-up models. In particular, MARKAL-MACRO (1) does allow for the
feedback effects of the availability of capital and fuel markets on energy
demands and GDP, and (2) endogenizes economic impacts of technical options
and environmental requirements.
MARKAL-MACRO combines the bottom-up MARKAL model with MACRO, a long-term
neoclassical macroeconomic growth model. It was MARKAL-MACRO, not MARKAL
as the RIIA articles states, that was used by the U.S. Interagency Analytical
Team in 1997 to help frame the U.S. position for the COP-3 negotiations
(See IEA ETSAP News, August 1997).
Reference
J. Fisher and M. Grubb, The use of economic models in climate change policy
analysis, The Royal Institute of International Affairs, EEP Climate Change
Briefing Paper No. 5, October 1997.
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