A Hybrid IO Energy Model to Analyze CO2 Reduction Policies: A Case of Germany

In recent years a lot of new energy models have been developed to analyze climate change mitigation strategies and the effects such strategies have on economic and technological development. Two main types of models can be identified: Top-down models that focus on the economic interactions within different sectors in an economy and bottom-up models that focus more on physical energy flows and technological aspects. One way of exploiting the advantages of each of these approaches is to link them to create a hybrid approach. Due to their main characteristics (e.g. high degree of disaggregating) input-output models are suitable for integrating technological data in an economic model in a special manner. Therefore, a class of models exists, linking input-output models with disaggregated energy system models. In this paper we present such a hybrid approach which consists of the input-output model Macroeconomic Information System (MIS) and the bottom-up model Instruments for Greenhouse Gas Reduction Strategies (IKARUS) — Market Allocation (MARKAL). For the hybrid MIS/IKARUS-MARKAL model a soft-linking approach is used, where the MIS model supplies data about the development of the different industry and service sectors and the IKARUS-MARKAL model calculates the energy demand of these sectors and the cost-optimal energy production structure. Two different examples for the use of the hybrid MIS/IKARUS-MARKAL approach will be presented: our first example focuses on the question of whether a given emission target (like the Kyoto one) can be reached assuming a desired growth rate and taking technological restrictions into account. The focus of the second example is on the economic impacts of a CO

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mitigation strategy. In this example, we ask which industries will benefit from the decision of policymakers to take measures to reduce CO

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emissions and which ones will lose (in the sense of economic growth).