Model scope and methods - EPPA

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The MIT Economic Projection and Policy Analysis (EPPA) model is a computable general equilibrium (CGE) model of the global economy[1]. It has been applied to the study of policy impacts on the economy and emissions, prospects for new technologies, agriculture and land use, and—in some versions—environmental feedbacks on the economy through human health and agricultural productivity. The model can be run in a standalone mode to, for example, investigate the implications of climate and energy policy, or it can be coupled with the MIT Earth System Model (MESM) to form the MIT Integrated Global System Modeling (IGSM) framework[2]. The EPPA model is regularly updated as new global economic data become available. Previous EPPA versions are described in Babiker et al. (2001)[3], Paltsev et al. (2005)[4], and Chen et al. (2015)[5].

The EPPA is a multi-region and multi-sector recursive dynamic model of the world economy solved at 5-year intervals from 2015 through 2100. The model includes explicit advanced energy conversion technologies and accounting of both greenhouse gas and conventional pollutant emissions. The current version of the model includes 18 regions and 32 sectors (including detailed representation of advanced energy technologies), with labor, capital and multiple energy resources as primary factors. The model represents economic activities of three types of agents in each region: producers, consumers, and the government.

The GTAP data set[6] provides the base information on Social Accounting Matrices and the input-output structure for regional economies, including bilateral trade flows, and a representation of energy markets in physical units. EPPA also incorporates data on greenhouse gas (CO2, CH4, N2O, HFCs, PFCs, and SF6) and air pollutant emissions (SO2, NOx, black carbon, organic carbon, NH3, CO, VOC).

Among factor inputs are both depletable (oil, natural gas, coal) and renewable natural inputs (solar, wind, hydro), as well as produced capital and labor. EPPA also disaggregates the GTAP data for transportation to include household transport (i.e. personal automobile), and further detail on technologies that produce electricity from fuels and natural resources and fuels from unconventional sources such as liquid fuels from biomass and shale oil resources; and gas from coal or unconventional gas resources. To represent such technologies, detailed bottom-up engineering studies are used to parameterize production functions for each. The parameterization of these sectors is described in detail in Chen et al. (2016)[7] and Morris et al. (2019)[8].

Alert-warning.png Note: The documentation of EPPA is 'in preparation' and is not yet 'published'!

Model Documentation - EPPA

Corresponding documentation
Previous versions
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Model information
Model link
Institution Massachusetts Institute of Technology (MIT), USA,
Solution concept General equilibrium (closed economy)
Solution method Optimization
  1. Chen, Y.-H. H., S. Paltsev, J. Reilly, J. Morris and M. Babiker (2016). Long-term economic modeling for climate change assessment. Economic Modeling, 52, 867–883.
  3. Babiker, M., Reilly, J., Mayer, M., Eckaus, R., Sue Wing, I., Hyman, R., 2001. The MIT emissions prediction and policy analysis (EPPA) model: revisions, sensitivities, and comparisons of results. MIT Joint Program Report 71, Cambridge,MA.
  4. Paltsev, S., Reilly, J., Jacoby, H., Eckaus, R., McFarland, J., Babiker, M., Paltsev, S., Reilly, J., Jacoby, H., Eckaus, R., McFarland, J., Babiker, M., 2005. The MIT emissions prediction and policy analysis (EPPA) model: version 4. MIT Joint Program Report 125. Cambridge, MA.
  5. Chen, H., S. Paltsev, J. Reilly, J. Morris, V. Karplus, A. Gurgel, N. Winchester, P. Kishimoto, É. Blanc and M. Babiker, 2017. The MIT Economic Projection and Policy Analysis (EPPA) Model: Version 5. MIT Joint Program Technical Note #16, Cambridge, MA.