Macro-economy - MESSAGE-GLOBIOM - Revision history

Anique Carbados: Updated MESSAGE to MESSAGEix, minor editing to reflect 2020 release documentation.

2020-11-16T14:53:35Z

Updated MESSAGE to MESSAGEix, minor editing to reflect 2020 release documentation.

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	The detailed energy supply model (~~MESSAGE~~) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or		The detailed energy supply model (MESSAGEix) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or
	ETA-MACRO model (Manne and Richels, 1992 [[CiteRef::MSG-GLB_manne_buying_1992]]), a predecessor of the [http://www.stanford.edu/group/MERGE/ MERGE] model. The ~~reason for linking the~~ two models		ETA-MACRO model (Manne and Richels, 1992 [[CiteRef::MSG-GLB_manne_buying_1992]]), a predecessor of the [http://www.stanford.edu/group/MERGE/ MERGE] model. The two models are linked to consistently reflect the influence of energy supply costs, as calculated by MESSAGEix, in the mix of production factors considered in MACRO, and the effect of energy price changes on energy service demand. The combined MESSAGEix-MACRO model (Messner and Schrattenholzer, 2000 [[CiteRef::MSG-GLB_messner_messagemacro:_2000]]) can generate a consistent economic response to changes in energy prices and estimate the overall economic consequences (e.g., changes in GDP or household consumption) of energy or climate policies.
	is to consistently reflect the influence of energy supply costs, as calculated by ~~MESSAGE~~, in the mix of production factors considered in MACRO, and the effect of changes ~~in energy prices~~ on energy service ~~demands~~. The combined ~~MESSAGE~~-MACRO model (Messner and Schrattenholzer, 2000 [[CiteRef::MSG-GLB_messner_messagemacro:_2000]]) can generate a consistent
	economic response to changes in energy prices and estimate overall economic consequences (e.g., GDP or consumption ~~loss~~) of energy or climate policies.

	~~MACRO~~ is a macroeconomic model maximizing the intertemporal utility function of a single representative producer-consumer in each world region. The optimization result is		ACRO is a macroeconomic model maximizing the intertemporal utility function of a single representative producer-consumer in each world region. The optimization result is a sequence of optimal savings, investment, and consumption decisions. The main variables of the model are capital stock, available labor, and energy inputs, which together determine an economy's total output according to a nested CES (constant elasticity of substitution) production function. End-use service demand in the (commercial) demand categories of MESSAGEix (see [[Energy_demand_-_MESSAGE-GLOBIOM\|Energy demand of MESSAGEix-GLOBIOM]]) is determined within the MACRO model, and is consistent with energy supply from MESSAGEix, which is an input to the model.
	a sequence of optimal savings, investment, and consumption decisions. The main variables of the model are ~~the~~ capital stock, available labor, and energy inputs, which
	together determine ~~the~~ total output ~~of an economy~~ according to a nested CES (constant elasticity of substitution) production function. ~~Energy~~ demand in the ~~six~~ commercial
	demand categories of ~~MESSAGE~~ (see [[Energy_demand_-_MESSAGE-GLOBIOM\|Energy demand of ~~MESSAGE~~-GLOBIOM]]) is determined within the MACRO model, and is consistent with energy supply from ~~MESSAGE~~, which is an input to the model.

	The model’s most important driving input variables are the projected growth rates of total labor, i.e., the combined effect of labor force and labor productivity growth and the annual		The model’s most important driving input variables are the projected growth rates of total labor, i.e., the combined effect of labor force and labor productivity growth, and the annual rates of reference energy intensity reduction, i.e. the so-called autonomous energy efficiency improvement (AEEI) coefficients. The latter are calibrated to the developments in a MESSAGEix baseline scenario to ensure consistency between the two models. Labor supply growth is also referred to as reference or potential GDP growth. In the absence of price changes, energy demands grow at rates that are the approximate result of potential GDP growth rates, reduced by the rates of overall energy intensity reduction. Price changes in the six demand categories, for example induced by energy or climate policies, can alter this path significantly.
	rates of reference energy intensity reduction. The latter is calibrated to the developments in a ~~MESSAGE~~ baseline scenario to ensure consistency
	between the two models. Labor supply growth is also referred to as reference or potential GDP growth. In the absence of price changes, energy demands grow at rates that are the
	approximate result of potential GDP growth rates, reduced by the rates of overall energy intensity reduction. Price changes of the six demand categories can alter this path significantly.

	~~MACRO’s~~ production function includes six commercial energy demand categories represented in ~~MESSAGE~~. To optimize, MACRO requires cost information for each demand category.		MACRO's production function includes six commercial energy demand categories represented in MESSAGEix. To optimize, MACRO requires cost information for each demand category. The exact definitions of these costs as a function over all positive quantities of energy cannot be given in closed form because each point of the function would be a result of a full MESSAGEix run. However, the optimality conditions implicit in the formulation of MACRO only require the functional values and its derivatives at the optimal point to be consistent between the two models. Since these requirements are therefore only local, most functions with this feature will simulate the combined energy-economic system in the neighborhood of the optimal point. The regional costs (of energy use and imports) and revenues (from energy exports) of providing energy in MACRO are approximated by a Taylor expansion to the first order of the energy system costs as calculated by MESSAGEix. From an initial MESSAGEix model run, the total energy system cost (including costs/revenues from energy trade) and additional abatement costs (e.g., abatement costs from non-energy sources) as well as the shadow prices of the six commercial demand categories by region are passed to MACRO. In addition to the economic implications of energy trade, the data exchange from MESSAGEix to MACRO may also include the revenues or costs of trade if GHG permits.
	The exact definitions of these costs as a function over all positive quantities of energy cannot be given in closed form because each point of the function would be a result
	of a full ~~MESSAGE~~ run. However, the optimality conditions implicit in the formulation of MACRO only require the functional values and its derivatives at the optimal point
	to be consistent between the two ~~sub-~~models. Since these requirements are therefore only local, most functions with this feature will simulate the combined energy-economic
	system in the neighborhood of the optimal point. The regional costs (energy use and imports) and ~~benefits~~ (energy exports) of providing energy in MACRO are approximated by a Taylor
	expansion to first order of the energy system costs as calculated by ~~MESSAGE~~. From an initial ~~MESSAGE~~ model run, the total energy system cost (including costs/revenues from
	energy trade) and additional abatement costs (e.g., abatement costs from non-energy sources) as well as the shadow prices of the six commercial demand categories by region
	are passed to MACRO. In addition to the economic implications of energy trade, MACRO also ~~includes~~ the ~~implications~~ of GHG ~~permit trade~~.

	For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the annex presenting the mathematical formulation of MACRO in [[Appendices_-_MESSAGE-GLOBIOM\|Appendices of ~~MESSAGE~~-GLOBIOM]].		For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the annex presenting the mathematical formulation of MACRO in [[Appendices_-_MESSAGE-GLOBIOM\|Appendices of MESSAGEix-GLOBIOM]].

Rineke Oostenrijk: Text replacement - "|QQQ " to ""

2020-06-23T15:14:14Z

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	The detailed energy supply model (MESSAGE) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or		The detailed energy supply model (MESSAGE) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or

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2020-06-23T15:11:30Z

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	The detailed energy supply model (MESSAGE) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or		The detailed energy supply model (MESSAGE) is soft-linked to an aggregated, single-sector macro-economic model (MACRO) which has been derived from the so-called Global 2100 or

Rineke Oostenrijk: Text replacement - "|HasSeq=3 " to ""

2020-06-23T15:01:53Z

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2020-06-23T14:54:48Z

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Johanna Zilliacus at 10:08, 31 August 2016

2016-08-31T10:08:28Z

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	are passed to MACRO. In addition to the economic implications of energy trade, MACRO also includes the implications of GHG permit trade.		are passed to MACRO. In addition to the economic implications of energy trade, MACRO also includes the implications of GHG permit trade.

	For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the [[Appendices_-_MESSAGE-GLOBIOM\|~~annex for mathematical formulation of MACRO in the~~ Appendices of MESSAGE-GLOBIOM]].		For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the annex presenting the mathematical formulation of MACRO in [[Appendices_-_MESSAGE-GLOBIOM\|Appendices of MESSAGE-GLOBIOM]].

Johanna Zilliacus at 10:06, 31 August 2016

2016-08-31T10:06:11Z

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	are passed to MACRO. In addition to the economic implications of energy trade, MACRO also includes the implications of GHG permit trade.		are passed to MACRO. In addition to the economic implications of energy trade, MACRO also includes the implications of GHG permit trade.

	For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the ~~'''Macro~~-annex~~''' ('''''insert cross~~-~~reference here once annex is up''''')~~.		For a more elaborate description of MACRO, including the system of equations and technical details of the implementation, please consult the [[Appendices_-_MESSAGE-GLOBIOM\|annex for mathematical formulation of MACRO in the Appendices of MESSAGE-GLOBIOM]].

Johanna Zilliacus at 16:56, 22 August 2016

2016-08-22T16:56:22Z

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	a sequence of optimal savings, investment, and consumption decisions. The main variables of the model are the capital stock, available labor, and energy inputs, which		a sequence of optimal savings, investment, and consumption decisions. The main variables of the model are the capital stock, available labor, and energy inputs, which
	together determine the total output of an economy according to a nested CES (constant elasticity of substitution) production function. Energy demand in the six commercial		together determine the total output of an economy according to a nested CES (constant elasticity of substitution) production function. Energy demand in the six commercial
	demand categories of MESSAGE (see [[Energy_demand_-~~_IMAGE~~\|Energy demand of MESSAGE-GLOBIOM]]) is determined within the MACRO model, and is consistent with energy supply from MESSAGE, which is an input to the model.		demand categories of MESSAGE (see [[Energy_demand_-_MESSAGE-GLOBIOM\|Energy demand of MESSAGE-GLOBIOM]]) is determined within the MACRO model, and is consistent with energy supply from MESSAGE, which is an input to the model.

	The model’s most important driving input variables are the projected growth rates of total labor, i.e., the combined effect of labor force and labor productivity growth and the annual		The model’s most important driving input variables are the projected growth rates of total labor, i.e., the combined effect of labor force and labor productivity growth and the annual

Johanna Zilliacus at 16:49, 22 August 2016

2016-08-22T16:49:39Z

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Rineke Oostenrijk: Edited automatically from page MESSAGE-GLOBIOM setup.

2016-08-05T19:01:09Z

Edited automatically from page MESSAGE-GLOBIOM setup.

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