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Long-Term Economic Scenarios: Assumptions and Determining Mechanisms for Future Emissions Trajectories

The production and study of long-term economic scenarios is an inevitable step in setting out climate policies, whether in measuring the risks of inaction, or assessing ex ante the potential impacts of the measures considered. In order to respond to this demand, economics have developed growing digital modelling capacity and produced many simulation experiments, such as the SRES scenarios, recognised and highly-used by the scientific community.

However, the methods, tools and assumptions used for these scenario-based exercises have now been shown to have significant shortcomings, including:

  • a lack of internal consistency between the basic assumptions of the simulated trajectories,
  • an absence of certain mechanisms despite their importance in assessing policy costs: financial and commercial imbalances, sub-optimal use of factors, shortage of fossil resources,
  • the “optimal” basis on which most of the trajectories are based.

In order to address the methodological and theoretical questions raised by these inadequacies, a number of research dynamics have encouraged the development of hybrid models, enabling more realistic long-term modelling, in which discussion between players (scientists, public decision-makers, industrial players) needs to be facilitated. Such scientific progress opens up new avenues for analysing long-term trajectories, in particular a better understanding of interactions between macroeconomic mechanisms, technological progress and changes in lifestyle and, extending from this, sources of leverage or obstacles to reducing greenhouse gas emissions.

The detailed research project herein stands at the crossroads of these dynamic scientific prospects and growing demand for assistance in public decision-making. It is stimulated in particular by the existence of two types of long-term risks: that GHG-emissions soar uncontrollably, for instance, in the event of significant use of coal energy; in contrast, the economic risks of growth stoppage in the largest developing countries (China, India), which would concurrently limit emissions growth. This project proposes, based on scenarios produced beforehand with the hybrid model Imaclim-R developed at CIRED, to carry out complete analysis of the respective role of macro-economic (growth, demographics, international rules), technological (substitution potential, gains in efficiency, innovation) and external (energy-related and geopolitical crises, unprevented climate damage) determinants in emissions trajectories, with or without climate policies.

Particular attention will be paid to discussing the results with the public and private partners throughout the process, as well as to disseminating analysis at the highest international level.

  • Climate Policy and International Climate Negotiations