Incorporating CO2 Emissions into Macroeconomic Models through Primary Energy Use

Research output: Working paperDiscussion paper

Abstract

Two key pillars of the energy quadrilemma (which measure the sustainability of energy policy) are a reduction in greenhouse gas emissions and economic development. Recent worldwide energy policy has focused on the reduction of greenhouse gas emissions to combat climate change, which will influence, and in turn be influenced by, economic activity and energy use. As such, it is of critically important to identify and incorporate emissions into macroeconomic models. Typically, emissions are linked to economic activity via the level of output, both calculated at a sectoral level. However, this approach – while consistent with linear models such as Input-Output - assumes that emissions per unit of output remains constant, which can be problematic with more complex economic systems. In this paper we detail a method for incorporating sectoral and aggregate CO2 emissions into a macroeconomic model (CGE) of the UK through the use of sectoral primary energy use.
LanguageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-10
Number of pages10
Volume18
Publication statusPublished - 30 Nov 2018

Fingerprint

Economics
Energy policy
Gas emissions
Greenhouse gases
Climate change
Sustainable development
Energy use
Macroeconomic models
CO2 emissions
Greenhouse gas emissions
Economic activity
Economic development
Economic systems
Energy
Sustainability

Keywords

  • energy
  • emissions
  • CO2
  • macroeconomics
  • energy policy
  • climate change

Cite this

Allan, G., Connolly, K., Ross, A. G., & McGregor, P. (2018). Incorporating CO2 Emissions into Macroeconomic Models through Primary Energy Use. (18 ed.) (pp. 1-10). Glasgow: University of Strathclyde.
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abstract = "Two key pillars of the energy quadrilemma (which measure the sustainability of energy policy) are a reduction in greenhouse gas emissions and economic development. Recent worldwide energy policy has focused on the reduction of greenhouse gas emissions to combat climate change, which will influence, and in turn be influenced by, economic activity and energy use. As such, it is of critically important to identify and incorporate emissions into macroeconomic models. Typically, emissions are linked to economic activity via the level of output, both calculated at a sectoral level. However, this approach – while consistent with linear models such as Input-Output - assumes that emissions per unit of output remains constant, which can be problematic with more complex economic systems. In this paper we detail a method for incorporating sectoral and aggregate CO2 emissions into a macroeconomic model (CGE) of the UK through the use of sectoral primary energy use.",
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Incorporating CO2 Emissions into Macroeconomic Models through Primary Energy Use. / Allan, Grant; Connolly, Kevin; Ross, Andrew G.; McGregor, Peter.

18. ed. Glasgow : University of Strathclyde, 2018. p. 1-10.

Research output: Working paperDiscussion paper

TY - UNPB

T1 - Incorporating CO2 Emissions into Macroeconomic Models through Primary Energy Use

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N2 - Two key pillars of the energy quadrilemma (which measure the sustainability of energy policy) are a reduction in greenhouse gas emissions and economic development. Recent worldwide energy policy has focused on the reduction of greenhouse gas emissions to combat climate change, which will influence, and in turn be influenced by, economic activity and energy use. As such, it is of critically important to identify and incorporate emissions into macroeconomic models. Typically, emissions are linked to economic activity via the level of output, both calculated at a sectoral level. However, this approach – while consistent with linear models such as Input-Output - assumes that emissions per unit of output remains constant, which can be problematic with more complex economic systems. In this paper we detail a method for incorporating sectoral and aggregate CO2 emissions into a macroeconomic model (CGE) of the UK through the use of sectoral primary energy use.

AB - Two key pillars of the energy quadrilemma (which measure the sustainability of energy policy) are a reduction in greenhouse gas emissions and economic development. Recent worldwide energy policy has focused on the reduction of greenhouse gas emissions to combat climate change, which will influence, and in turn be influenced by, economic activity and energy use. As such, it is of critically important to identify and incorporate emissions into macroeconomic models. Typically, emissions are linked to economic activity via the level of output, both calculated at a sectoral level. However, this approach – while consistent with linear models such as Input-Output - assumes that emissions per unit of output remains constant, which can be problematic with more complex economic systems. In this paper we detail a method for incorporating sectoral and aggregate CO2 emissions into a macroeconomic model (CGE) of the UK through the use of sectoral primary energy use.

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Allan G, Connolly K, Ross AG, McGregor P. Incorporating CO2 Emissions into Macroeconomic Models through Primary Energy Use. 18 ed. Glasgow: University of Strathclyde. 2018 Nov 30, p. 1-10.