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Combining Top-Down and Bottom-Up Approaches to Energy-Economy Modeling Using Discrete Choice Methods

Nic Rivers and Mark Jaccard

Year: 2005
Volume: Volume 26
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol26-No1-4
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Abstract:
Recently, hybrid models of the energy-economy have been developed with the objective of combining the strengths of the traditional top-down and bottom-up approaches by simulating consumer and firm behavior at the technological level. We explore here the application of discrete choice research and modeling to the empirical estimation of key behavioral parameters representing technology choice in hybrid models. We estimate a discrete choice model of the industrial steam generation technology decision from a survey of 259 industrial firms in Canada. The results provide behavioral parameters for the CIMS energy-economy model. We then conduct a policy analysis and show the relative effects of an information program, technology subsidy, and carbon dioxide tax on the uptake of alternative industrial steam generation technologies, including boilers and cogeneration systems. We also show how empirically derived estimates of parameter uncertainty can be propagated through the model to provide uncertainty estimates for major model outputs.



Towards General Equilibrium in a Technology-Rich Model with Empirically Estimated Behavioral Parameters

Chris Bataille, Mark Jaccard, John Nyboer and Nic Rivers

Year: 2006
Volume: Hybrid Modeling
Number: Special Issue #2
DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI2-5
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Abstract:
Most energy-economy policy models offered to policy makers are deficient in terms of at least one of technological explicitness, microeconomic realism, or macroeconomic completeness. We herein describe CIMS, a model which starts with the technological explicitness of the �bottom-up� approach and adds the microeconomic realism and macroeconomic completeness of the �topdown� CGE approach. This paper demonstrates CIMS� direct utility for policy analysis, and also how it can be used to better estimate the long run capital-forenergy substitution elasticity (ESUB) and autonomous energy efficiency index (AEEI) technology parameters used in top-down models. By running CIMS under several possible energy price futures and observing their effects on capital and energy input shares and energy consumption, we estimate an economy-wide ESUB of 0.26 and an AEEI of 0.57%, with significant sectoral differences for both parameters.



How Malleable are the Greenhouse Gas Emission Intensities of the G7 Nations?

Chris Bataille, Nic Rivers, Paulus Mau, Chris Joseph, and Jian-Jun Tu

Year: 2007
Volume: Volume 28
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No1-7
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Abstract:
Why do countries greenhouse gas (GHG) intensities differ? How much of a country's GHG intensity is set by inflexible national circumstances, and how much may be altered by policy? These questions are common in climate change policy discourse and may influence emission reduction allocations. Despite the policy relevance of the discussion, little quantitative analysis has been done. In this paper we address these questions in the context of the G7 by applying a pair of simple quantitative methodologies: decomposition analysis and allocation of fossil fuel production emissions to end-users instead of producers. According to our analysis and available data, climate and geographic size both inflexible national characteristics can have a significant effect on a country's GHG intensity. A country's methods for producing electricity and net trade in fossil fuels are also significant, while industrial structure has little effect at the available level of data disaggregation.



Electric Utility Demand Side Management in Canada

Nic Rivers and Mark Jaccard

Year: 2011
Volume: Volume 32
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol32-No4-6
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Abstract:
Government, utility, and private subsidies for energy efficiency play a prominent role in current efforts to reduce greenhouse gas emissions, yet the effectiveness of this policy approach is in dispute. One opportunity for empirical analysis is provided by the past energy efficiency subsidies, called demand-side management programs, offered by electric utilities in North America over several decades. Between 1990 and 2005, most electric utilities in Canada administered such programs, with total spending of $2.9 billion (CDN$2005). This paper uses the significant inter-annual variation in demand side management spending during this period to econometrically estimate the effectiveness of these subsidies. The resulting estimates indicate that these programs have not had a substantial impact on overall electricity consumption in Canada.





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