Version WITCH - A World Induced Technical Change Hybrid
WITCH is a Regional Integrated Assessment Hard-Link Hybrid Model. Its top-down component consists of an intertemporal optimal growth model in which the energy input of the aggregate production function has been expanded to give a bottom-up like description of the energy sector. World countries are grouped in twelve regions that strategically interact following a game theoretic structure. A climate module and a damage function provide the feedback on the economy of carbon dioxide emissions into the atmosphere.
The model is structured so as to provide normative information on the optimal responses of world economies to climate damages and to model the channels of transmission of climate policy to the economic system. The dynamic and strategic features of the model, the energy sector specification and the technical change options make WITCH an especially suited tool to explicitly analyze the climate change issue, marked by medium term investment choices and long term economic dynamics and environmental responses.