Keywords: carbon dioxide emissions, energy-, economy modelling, international market of emission permits, economic equilibrium
Modelling an international market of CO2 emission permits
Many regions, e.g. countries, have developed energy-economy models (such as MARKAL-MACRO, MM) to assess their energy policies, in particular concerning the curbing of their carbon dioxide CO2) emissions. To integrate regional MM models, we propose a multiregional MARKAL-MACRO (mMM) model. It enables one to study international cooperation to curb jointly CO2 emissions through a market of emission permits (certificates). Furthermore, from a decision support perspective, the mMM model can be used to integrate aspects of ecological sustainability (in relation to the climate change issue), economic welfare, efficient resource use and technological innovation. To solve mMM, we have used two alternative mathematical methods. We have implemented both in parallel on a network of independent workstations. As a numerical application, we study the cooperation of three European countries (the Netherlands, Sweden and Switzerland) to curb jointly their CO2 emissions.