Policy - WITCH
|Model Documentation - WITCH|
|Institution||Fondazione Eni Enrico Mattei (FEEM), Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)|
|Concept||Hybrid: Economic optimal growth model, including a bottom-up energy sector and a simple climate model, embedded in a `game theory` framework.|
|Solution method||Regional growth models solved by non-linear optimization and game theoretic setup solved by tatonnement algorithm (cooperative solution: Negishi welfare aggregation, non-cooperative solution: Nash equilibrium)|
When no policy is applied, the model is running a business-as-usual (BAU) case, which serves as a reference case with which the results with policy are compared.
WITCH can handle several types of policies:
- Quantitative climate targets on global temperature, on radiative forcing, on atmospheric carbon concentration, on greenhouse gas emissions or on carbon budget. In these case additional constraints are imposed in the model. The resulting carbon mitigation cost can be obtained in terms of loss of consumption or GDP.
- Carbon taxes can be imposed directly in the model, by adding a cost on carbon emissions.
- A carbon market can be activated, with the possibility to allow an to trade of emission permits. The temporal dimension is also taken in to account with the possibility of "banking and borrowing" over time.
- Additional subsidies, taxes and penalty on energies sources can be introduced.
The model is calibrated for some predefined policies: "BAU", "stabilisation at 450ppm", "stabilisation at 535ppm", "radiative forcing target at 3.2 W/m2" and "radiative forcing target at 2.8 W/m2".