Projects / Programmes
The establishment and development of model infrastructure for the economic evaluation of the effects of climate and energy measures on the economy and society
| Code |
Science |
Field |
Subfield |
| 5.02.00 |
Social sciences |
Economics |
|
| Code |
Science |
Field |
| 5.02 |
Social Sciences |
Economics and Business |
Climate change, CO2 emissions, energy products, environmental taxes, computable general equilibrium model, scenario, fiscal policy, makroeconomic indicators
Researchers (10)
Organisations (2)
Abstract
In accordance with the Development Strategy of Slovenia 2030, Slovenia is moving towards a transition to a climate-neutral society. Like any responsible national government, Slovenia’s government has set itself the task of establishing an analytical tool to support decision-making in areas that are crucial for the achievement of its goal of a climate-neutral society. The tool will help the government guide and design existing and future measures to mitigate climate change in the medium and long term. Therefore, as part of the research project, we will develop a computable dynamic general equilibrium model with an environmental and energy component of the Slovenian economy (CGE model). Namely, CGE models simulate the functioning of a market economy and are unique in their ability to analyze the effects of economic policy decisions, especially when the policy has macroeconomic effects and implications for sectoral resource allocations; as well as in the ability to show the trade-offs of a given policy that has consequences for the whole economy. The project work program consists of four work packages (WPs), which will be implemented in two years and are based on the scientific and professional excellence and the experience of the project leader and the entire research team. In the first WP, we will initially critically evaluate the literature and analyze the latest methodological findings, which will significantly contribute to the design of the model. As part of the first WP, we will also build a social accounting matrix (SAM) of Slovenia, which will serve as the key input for our model, as well as provide all the remaining data necessary for the development of the environmental and energy component of the model. As part of the second WP, we will develop the model, where all the modeling will take place in GAMS (General Algebraic Modeling Language). We will also validate the model, which will allow for several exogenous changes in variables and parameters, using several verification techniques. In WP 3, we will initially identify some key scenarios or policy instruments, which we will simulate and evaluate with the help of the model. Special emphasis will be placed on the interpretation of the results as well as the sensitivity analysis using the Monte Carlo and Gaussian quadrature method. In the last WP, we will deal with the project management, including risk management, which will ensure consistent achievement of milestones and results. In addition, this WP will ensure the successful dissemination of the results. With the development of the model, we will bring about new knowledge and information on the possibilities for achieving the strategic goal of a climate-neutral future, thus creating an important basis for making strategic decisions in the fields of environmental and energy policy and related economic instruments. We believe that the results of the project will enable us to support the decision-making of the Ministry of Finance, the Ministry of Infrastructure, and other key ministries in terms of evidence-based policy. According to the content of the tender, the results of the project will have an impact not only on long-term economic development, but also on other social aspects of life.
