Learn more about our systems model built to better understand the economy-wide impacts of policy interventions to address the climate crisis.Scroll to learn more
In 2015 during the Paris Climate Conference, we launched with KnowlEdge srl a market-driven model to understand the system-wide dynamics of emission reduction targets in 11 countries: Brazil, Canada, China, Germany, India, Indonesia, Japan, Mexico, Korea, the United Kingdom, and the United States. Our systems approach implies a consideration of not only whether existing country-level policies and NDCs are sufficient to achieve their Paris targets, but the investment required, payback periods, avoided costs, energy sector winners and losers and employment impacts of these policies. Scroll below for more information on why systems analysis is valuable, our most recent analysis for the 11 markets included in our study, and how clients can leverage our model to enrich their own work.
As the climate crisis accelerates during the 2020s, policymakers are rightly being scrutinized for their efforts (or lack thereof) to reduce emissions in line with nationally determined contributions (NDCs) defined at the recent Conference of Parties (COP). Our systems analysis provides insight into the rate of decarbonization in large economies and how this compares to what is required to reach NDC targets set for 2030. You can access our recent calculations for the 11 markets we cover by clicking here.
However, the value of systems analysis extends beyond this scenario, by helping to illuminate how these emission reductions link to development outcomes. Many governments focus policymaking on the UN Sustainable Development Goals (SDGs), which relate to diverse development targets linked to income and gender equality, health, employment, energy systems, and the environment. How can policy interventions targeted to reducing emissions be understood in the context of their impact on these SDGs? This is the question that systems analysis helps to answer, and why our model is a unique tool for better understanding these relationships.
Our integrated model simulates economy-wide impacts of policy interventions like emission reduction goals (e.g. NDCs to the COP process) and renewable energy and/or energy efficiency targets. These simulations reveal unique insight to how domestic energy markets will be reshaped, what kind of investment opportunities and payback horizons will exist, and the impact on jobs in both the renewable energy and energy efficiency sectors.
Most of the modeling developed thus far around emissions reductions and carbon abatement are defined by projecting the cost associated with reaching certain economy-wide or sector-based reductions in emissions. Our model takes a more integrated view of these interventions, in order to gain greater understanding of the likely outcomes resulting from their implementation. A more traditional approach to this analysis would use cost curves to show the cost of technology associated with target emissions reductions. Our modeling forecasts economy-wide outcomes over time with direct links to the stakeholders most impacted by them – policy makers, investors, and businesses – so they can utilize a more multi-dimensional set of results to inform their decision making.
In the most simple terms, our model takes inputs from each country – including policy interventions and certain assumptions like population trends, GDP growth and energy prices – and generates outputs related to investment required, policy-induced avoided costs and added benefits in areas like employment and performance against secondary targets related to energy consumption and emissions. Looking at a Business as Usual (BAU) scenario and a Low Carbon (LC) one, what is the total projected country energy demand, and from which sources will it be obtained? How do changes in GDP growth, population and energy efficiency in a given economy impact projected energy demand and emissions levels? How do reductions in post-2020 emission levels translate to sector-impacts over time? For example, how will the United States’ NDC influence the US energy mix and contribution of renewables to electricity generation over time? How do reductions in post-2020 emission levels translate to investment opportunity? Calculation of the “green jobs” resulting from country pledges and the skills needed to fill them, with insights on challenges and opportunities for talent attraction and worker training.
The system that we live in is showing serious cracks. The global coronavirus pandemic exposed these cracks vividly, but the system-wide instability linked to global climate change, environmental stress, and social inequities was showing significant strain before 2020. The value of systems analysis is increasingly evident.
Our work around these topics provides one model for thinking about some of the challenges ahead in the 2020s: how can we understand the linkages between carbon emissions, energy markets, investment, and employment in terms of past performance and the future opportunities to reshape them towards a more sustainable future? Our recent paper presents outputs from our work related to the 11 countries tracked through our modeling, highlighting the following:
Our country-level customization option allows clients to design and request their own scenarios from our model. Below is a sample of some of the assumptions and policies clients can select from. The customization pricing would differ depending on the scope of work required. Contact us below to inquire about further details on this customization service and we will respond confirming your request within 48 hours of receiving it.
|Policies and targets:||Unit|
|Renewable energy target||%|
|Renewable energy capacity||MW|
|Renewable energy production||MWh/year|
|Energy efficiency improvement||% or %/year|
|Investment (annual or cumulative) in RE (total or by technology)||$ or $/Year|
|Investment (annual or cumulative) in EE (total or by sector)||$ or $/Year|
|Target emission reduction||% or Ton|
|Coal prices||$/TJ (or others)|
|Petroleum prices||$/TJ (or others)|
|Natural Gas prices||$/TJ (or others)|
|Electricity price||$/TJ (or others)|
|Baseline energy efficiency improvement||%/year|
|Cost of technologies (RE, by technology), capital and O&M cost||$/MW|
|Energy Efficiency costs||$/ton|
|Labor intensity of technologies (construction and O&M)||people/MW|
|Employment creation per million $ of investment||jobs/$/Year|
Contact us to inquire about how our model can be customized to suit your research and modeling initiatives.Contact Us
A systemic approach provides multiple entry points for the investigation of the outcomes resulting from the implementation of current and future actions. The results of our modeling work are being used to inform planning towards low carbon development (most recently in relation to Net Zero ambition), the formulation of just transitions in the energy sector (identifying areas of job losses and job gains), as well the identification of investment opportunities that would trigger low carbon and resilient economic growth (in relation to the potential to create local value chains).
Overall, these are the areas in which model results are being used to inform decision making:
This work is a collaboration between Dual Citizen LLC and KnowlEdge srl, founded by our strategic advisor Dr. Andrea Bassi. Jeremy and Andrea both have extensive experience globally working on engagements linking data and system modeling with sustainable development and green growth. Get in touch to learn more about our work in the space and how this model and the resulting insight can enrich your work in this space.
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