Fondazione Eni Enrico Mattei (FEEM)

Fondazione Eni Enrico Mattei (FEEM)

Version ICES - Intertemporal Computable Equilibrium System

The ICES (Intertemporal Computable Equilibrium System) model is a recursive dynamic general equilibrium model developed with the main (but not exclusive) purpose to assess the final welfare implication of climate change impacts on world economies. Its general equilibrium structure - in which all markets are interlinked - is tailored to capture and highlight the production and consumption substitution processes at play in the social-economic system as a response to climate shocks. In doing so, the final economic equilibrium determined, takes into account explicitly the “autonomous adaptation” of economic systems.

ICES presents the following features:

  • Top-down recursive growth model: a sequence of static equilibria are inter-temporally connected by endogenous investment decisions. 
  • Detailed regional and sectoral disaggregation (in the present version 8 world regions and 17 industries are represented, but the detail can be increased).
  • Inter sectoral factor mobility and international trade. International investment flows.
    Representation of emissions of main GHG gases: (CO2, CH4, N2O, PFCs, HFCs, SF6).

The idea behind the use of ICES is to provide a climate change impact assessment going beyond the “simple” quantification of direct costs, to offer an economic evaluation summarising second and higher-order effects.

In addition to climate-change impact assessment, the model can be used to study mitigation and adaptation policies as well as different trade and public-policy reforms in the vein of conventional CGE. The ICES model has been developed by a team of researchers at FEEM.


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