A Pragmatic CGE Model for Assessing the Influence of Model Structure and Assumptions in Climate Change Policy Analysis

This report presents a simple pragmatic CGE model with an emphasis on industrial energy use. The purpose of the model is to serve as a tool for the exploration of model structure and assumptions. The motivation for this work was the fact that economic modeling studies influence the debate on the merits of climate change abatement studies and are consulted by policymakers seeking guidance. These studies assess the effectiveness and merits of policy options based on simulations of energy policies with energy-economic models. Policymakers, analysts, stakeholders, and the interested public should understand the strengths and weaknesses of the models and assumptions employed in such studies so that they can use them constructively.