Macroeconomic modelling

The model-based analysis of energy and environmental policy often refers to sector models with a focus on technology aspects. Those models often cannot adequately take macroeconomic rebound effects into account. In this project the widely used macroeconomic simulation and forecasting model PANTA RHEI is extended to the inclusion of relevant mechanisms of resource and energy efficiency improvements. The model also takes into account how increases in efficiency in certain sectors affect other sectors, leading to a more comprehensive investigation of macroeconomic rebound effects and corresponding environmental impacts.

Based on econometric analyses of relevant company data, the model parameters will be modified in such a way that the observed output and price elasticities in several sectors will be adequately represented. The adapted model will be used to estimate which effects different sets of policy measures have on the macroeconomic level (economic growth, employment, price level, energy and resource consumption) and on selected sectors (output, employment, prices, energy and resource consumption).  Thereby, the sets of policy measures which have been developed in collaboration with stakeholders can be evaluated through the model. The aim is to develop sets of measures, which reduce rebound effects as much as possible or even prevent them. The findings of the analysis will be discussed by the project team and relevant stakeholders and a ‘reality check’ will be carried out which might lead to necessary adjustments.