Kiel Working Papers, Kiel Institute for World Economics
No 1473:
Integrating Bioenergy into Computable General Equilibrium Models – A Survey
Bettina Kretschmer and Sonja Peterson
Abstract: In the past years biofuels have received increased
attention since they were believed to contribute to rural development,
energy security and to fight global warming. It became also clear, though,
that bioenergy cannot be evaluated independently of the rest of the economy
and that national and international feedback effects are important.
Computable general equilibrium (CGE) models have been widely employed in
order to study the effects of international climate policies. The main
characteristic of these models is their encompassing scope: Global models
cover the whole world economy disaggregated into regions and countries as
well as diverse sectors of economic activity. Such a modelling framework
unveils direct and indirect feedback effects of certain policies or shocks
across sectors and countries. CGE models are thus well suited for the study
of bioenergy/biofuel policies. One can currently find various approaches in
the literature of incorporating bioenergy into a CGE framework. This paper
intends to give an overview of existing approaches and to critically assess
their respective power. Grouping different approaches into categories and
highlighting their advantages and disadvantages is important for giving a
structure to this rather recent and rapidly growing research area and to
provide a guidepost for future work
Keywords: biofuels, CGE model, climate policy; (follow links to similar papers)
JEL-Codes: D58,; Q42,; Q48,; Q54; (follow links to similar papers)
20 pages, December 2008
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