Policy - REMIND
|Model Documentation - REMIND|
|Institution||Potsdam Institut für Klimafolgenforschung (PIK)|
Hybrid model that couples an economic growth model with a detailed energy system model and a simple climate model.
|Solution method||Inter-temporal optimization that maximizes cumulated discounted global welfare: Ramsey-type growth model with Negishi approach to regional welfare aggregation.|
In the climate policy mode, REMIND imposes an additional climate policy constraint on the welfare maximization. Examples include limits on temperature, forcing (from Kyoto gases or all radiative substances), CO2 concentration, cumulative carbon budget, and CO2 emissions over time. REMIND calculates the corresponding mitigation costs as a reduction of consumption or GDP with respect to the baseline case.
We can also study the impact of a pre-specified carbon tax pathway. For such scenarios, REMIND implements the tax as a penalty on emissions. Since it assumes full recycling of tax-revenues, the solution algorithm for such scenarios is less straightforward. It counterbalances the tax expenditure as part of each region's budget constraint by a fixed amount of tax revenue that is recycled in a lump-sum manner. It then runs iteratively with adjusted tax revenues until it matches the level of tax payments.
REMIND also accounts for subsidies and taxes in the energy sector and implements them as a price mark-up on a region's final demand of solids, heating oil, diesel, and petrol used in transport, as well as gas and electricity used in the stationary sector. The global total amounts to approximately 450 billion USD per year. The development of fossil fuel subsidies and taxes over REMIND's time horizon is prescribed by scenario assumptions. In the default case, subsidies phase out by 2050. Historical data are based on the IEA subsidies database and the International Energy Database, ENERDATA .
- Schwanitz VJ, Piontek F, Bertram C, Luderer G (2014) Long-term climate policy implications of phasing out fossil fuel subsidies. Energy Policy 67:882–894. doi: 10.1016/j.enpol.2013.12.015