Coupling national and global models to explore policy impacts of NDCs

Article - July 30, 2018

Since the official submission of the National Determined Contributions (NDCs) under the Paris agreement framework, a set of studies attempted to assess the energy and economic impacts on NDCs by using large-scale energy-economy models, both at the national and global level.

This paper presents a novel approach to quantify policy impacts of NDCs, by combining a set of technology-rich country-level models for major economies with an economy-wide global CGE model. The methodology enhances the credibility of global model-based scenarios, by complementing it with detailed representation of country-level policy priorities and structural heterogeneities, captured by national-level models. It also improves the consistency between national short-to-medium term policy plans with global long-term climate objectives. Results indicate that energy efficiency improvements and increased penetration of RES are the main contributors to emission reduction induced by NDCs. The role of emission reduction options differentiates by country, depending on national socio-economic objectives, energy resource endowment and climate policy ambition. The Paris pledges are found to be consistent with robust economic growth both in developed and in emerging economies. NDCs result in a more labour-intensive economy driven by RES expansion, while major clean energy manufacturers (EU, China) have the potential to improve their balance of trade.