Residential and commercial sectors - GCAM

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Model Documentation - GCAM

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Model information
Model link
Institution Pacific Northwest National Laboratory, Joint Global Change Research Institute (PNNL, JGCRI), USA,
Solution concept General equilibrium (closed economy)GCAM solves all energy, water, and land markets simultaneously
Solution method Recursive dynamic solution method
Anticipation GCAM is a dynamic recursive model, meaning that decision-makers do not know the future when making a decision today. After it solves each period, the model then uses the resulting state of the world, including the consequences of decisions made in that period - such as resource depletion, capital stock retirements and installations, and changes to the landscape - and then moves to the next time step and performs the same exercise. For long-lived investments, decision-makers may account for future profit streams, but those estimates would be based on current prices. For some parts of the model, economic agents use prior experience to form expectations based on multi-period experiences.

GCAM disaggregates the building sector into residential and commercial sectors and models three aggregate services (heating, cooling, and other). Within each region, each type of building and each service starts with a different mix of fuels supplying energy. The future evolution of building energy use is shaped by changes in (1) floorspace, (2) the level of building service per unit of floorspace, and (3) fuel and technology choices by consumers. Residential floorspace depends on population, income, population density, and exogenously estimated parameters. Commercial floorspace depends on population, income, the average price of energy services, and exogenously specified satiation levels. Note that GCAM also includes the option to specify floorspace exogenously. The level of building service demands per unit of floorspace depend on climate, building shell conductivity, affordability, and satiation levels. The approach used in the buildings sector is documented in Clarke et al. 2018,[1] which has a focus on heating and cooling service and energy demands. Within building services, the structures and functional forms are similar to any other GCAM sector, described in Energy Technologies. See the section on buildings for more details.

  1. Clarke, L., Eom, J., Hodson Marten, E., et al. 2018. Effects of long-term climate change on global building energy expenditures. Energy Economics 72, pp. 667-677.