果冻影院

Policy decisions involve choices that will not necessarily benefit all actors in an economy. A聽public聽policy to improve the distribution of income, for example,聽will imply trade-offs, which may differ across different socio-economic groups.聽Domestic聽policies may also have repercussions on international markets; for example,聽critics聽of聽the聽2003聽EU聽biofuels policies, which aimed聽to decrease CO2聽emissions聽in the transport sector,聽highlighted its consequences聽for聽indirect land use change outside Europe.聽Policy makers and stakeholders need to balance trade-offs and聽promote synergies聽arising from the delivery of policy objectives.聽

Empirical聽economic聽models聽based on theoretical聽foundations, such聽as聽Computable General Equilibrium聽(CGE) models,聽offer聽the possibility聽to inform聽evidence-based policy making.聽In fact, as economy-wide models quantify the direct, indirect and induced impacts of policy interventions and exogenous shocks (e.g.聽climate change, Covid-19), policy makers and stakeholders have the possibility to assess and compare the expected impacts of聽alternative聽policies and adaptation options聽across households, sectors and countries.聽The use of CGE models for policy聽analysis聽dates聽back聽to聽1960, when Leif Johansen developed聽a model for Norway.聽聽

The 果冻影院 Environmental Global Applied General Equilibrium (ENGAGE) model, developed by the macro-economic modelling team at ISR, is one of the main tools聽supporting the analysis聽of聽climate,聽environmental, resource, energy聽and economic policies.聽While the聽multi-sector, multi-region nature of聽ENGAGE聽allows聽the聽evaluation of聽policies across sectors and across regions,聽ISR鈥檚聽macro-economic modelling team also uses detailed country CGE models to聽assess the impacts across different socio-economic groups. The policy analysis of the macro-economic modelling team聽supports different ISR聽research聽themes and聽has focused on the following areas:聽

• Climate change and decarbonisation.聽By assessing the聽investments required for the decarbonisation of the energy system and聽the ways in which the transition could be financed,聽our research聽shows聽that the聽economic聽impacts of聽decarbonisation聽are unevenly distributed between high-income and low-income聽countries, with the latter group experiencing a larger economic slowdown than the former.聽The impact is larger when the climate ambition is increased. As low-income countries rely more on fossil fuels out to 2050,聽financial聽support聽for decarbonisation from high- to low-income countries聽can play a significant role in rebalancing impacts with minimal cost.聽
• Global food production.聽Land degradation聽affects a quarter of the global land area. Together with climate change,聽it聽is expected to increase the risks聽to聽food security in many regions of the world.聽聽shows that聽land degradation impacts are considerable in developing countries, where the decline in soil nutrients are not compensated with fertilizers.聽Land degradation could significantly amplify the negative impacts of climate change, as the聽magnitude of聽its聽impacts are聽comparable to worse-case climate change scenarios.聽However, our research also highlights the role of international trade as a mechanism聽for聽adaptation鈥攁聽functioning global food market is essential for food security.聽Policies to promote sustainable soil management practices聽may聽help to reduce the negative impact on yields caused by land degradation. However,聽the overall impact on crop production聽worsens聽as agricultural workers are exposed to extreme heat conditions, leading to聽loss of labour productivity.聽
• Resource nexus.聽By linking a water and a CGE model聽to聽capture the dynamic interactions between the Nile鈥檚 hydrology, the聽Grand Ethiopian Renaissance Dam聽(GERD)聽and Egypt鈥檚 economy,聽聽shows that聽coordinated filling and聽long-term聽operation of the聽dam聽increases聽the聽total electricity generation from both the聽dam聽and the Nile system. It also聽sustains Sudan鈥檚 water consumption, decreases Egypt鈥檚 irrigation water deficits, and increases Egypt鈥檚 GDP. Our聽research聽highlights the聽role of cooperation聽in such a dynamic and complex system, particularly to cope during severe聽periods of聽water scarcity.聽
• Circular economy.聽Our research in this area聽is particularly innovative. By developing the first global CGE model that represents the circular economy in the steel sector,聽聽that a green shift towards steel recycling in China brings significant competitiveness and economic gains. However, this shift needs to be aligned聽with an energy聽transition聽in the power sector to avoid carbon聽emissions聽generated during the production process.聽Our analysis contributed聽a section on聽the聽OECD report聽鈥淕lobal Material Resources Outlook to 2060: Economic Drivers and Environmental Consequences鈥�,聽highlighting the economic, resource and environmental聽gains of聽increased efficiency of steel-intensive industrial sectors in China and India to similar levels observed in advanced economies.聽

As part of two of the five new聽聽and the聽, the macro-economic modelling team will continue to support policy formulation and evaluation towards a sustainable future.聽聽