Technology and technical change in the MIT EPPA model

Joint Program Reprint • Journal Article
Technology and technical change in the MIT EPPA model
Jacoby, H.D., J.M. Reilly, J.R. McFarland and S. Paltsev (2006)
Energy Economics, 28(5-6): 610-631

Reprint 2006-5 [Read Full Article]

Abstract/Summary:

Potential technology change has a strong influence on projections of greenhouse gas emissions and costs of control, and computable general equilibrium (CGE) models are a common device for studying these phenomena. Using the MIT Emissions Prediction and Policy Analysis (EPPA) model as an example, two ways of representing technology in these models are discussed: the sector-level description of production possibilities founded on social accounting matrices and elasticity estimates, and sub-models of specific supply or end-use devices based on engineering-process data. A distinction is made between exogenous and endogenous technical change, and it is shown how, because of model structure and the origin of key parameters, such models naturally include shifts in production process that reflect some degree of endogenous technical change. As a result, the introduction of explicit endogenous relations should be approached with caution, to avoid double counting. © 2006 Elsevier B.V.

Citation:

Jacoby, H.D., J.M. Reilly, J.R. McFarland and S. Paltsev (2006): Technology and technical change in the MIT EPPA model. Energy Economics, 28(5-6): 610-631 (http://dx.doi.org/10.1016/j.eneco.2006.05.014)
  • Joint Program Reprint
  • Journal Article
Technology and technical change in the MIT EPPA model

Jacoby, H.D., J.M. Reilly, J.R. McFarland and S. Paltsev

2006-5
28(5-6): 610-631

Abstract/Summary: 

Potential technology change has a strong influence on projections of greenhouse gas emissions and costs of control, and computable general equilibrium (CGE) models are a common device for studying these phenomena. Using the MIT Emissions Prediction and Policy Analysis (EPPA) model as an example, two ways of representing technology in these models are discussed: the sector-level description of production possibilities founded on social accounting matrices and elasticity estimates, and sub-models of specific supply or end-use devices based on engineering-process data. A distinction is made between exogenous and endogenous technical change, and it is shown how, because of model structure and the origin of key parameters, such models naturally include shifts in production process that reflect some degree of endogenous technical change. As a result, the introduction of explicit endogenous relations should be approached with caution, to avoid double counting. © 2006 Elsevier B.V.

Supersedes: 

Technology and Technical Change in the MIT EPPA Model