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GTAP Resource #1039

"EV-Model: An Economic-Engineering CGE-Model for Finland"
by Honkatukia, Juha

The report presents an economic-technological, computable general equilibrium model for Finland. The model is a hybrid combining an engineering model of the energy sector to an economic CGE-model. This approach makes the model’s results more accessible to a wider audience and facilitates a much more detailed analysis of energy-related policies than standard approaches. The report presents the model’s background both from an engineering and an economic perspective, and discusses the differences between the two approaches.

The report also presents the results of an application of the model to evaluating the costs of the Finnish climate change strategy. The strategy is based on extensive surveys of the current situation with respect to greenhouse gas emissions in Finland, as well as the mitigation measures necessary for meeting the Kyoto target. The costs of Kyoto in Finland turn out to depend crucially on the source of new electricity capacity and, to a lesser extent, on the comprehensiveness of economic measures used in the implementation of the emission reductions. For meeting the Kyoto target, investment in nuclear power is clearly more economical than investment in natural gas-fired capacity. Energy taxes can contribute to the cost-efficiency of abatement but the scope for using revenue recycling to lower the costs of abatement is much more restricted than that of the power-generation choice. CAC policies turn out to be the most costly strategy.

Resource Details (Export Citation) GTAP Keywords
Category: 2002 Conference Paper
Status: Published
By/In: Presented at the 5th Annual Conference on Global Economic Analysis, Taipei, Taiwan
Date: 2002
Created: Honkatukia, J. (4/30/2002)
Updated: Bacou, M. (7/2/2002)
Visits: 2,096
- Calibration and parameter estimation
- Europe (Western)

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