The aim of the project is to understand further the relationship between energy use and its effects on the macro-economy and vice-versa. The work is mainly focusing on the effects of different energy pathways on the UK economy, including under both high and low renewables deployment and with prices reflecting different levels of taxes on carbon and other resources. Carried out in cooperation with research under the Energy, Economy and Societal Preferences programme being undertaken at the University of Leeds, and providing opportunities for significant data sharing between the two institutions, the activity at UCL will involve modelling of the energy-economy interaction in two ways.
- Firstly, the development of a MACRO Stand-Alone module and its incorporation into the UCL UK (UKTM-UCL) and global TIMES (TIAM-UCL) models means that insights can now be generated into the GDP implications of different energy scenarios. The models will explore the economic consequences for the UK of several energy pathways being developed elsewhere in UKERC, in particular considering the implications of reduced energy demand by the UK. The work will also consider the regional economic effects delayed action on climate change.
- Secondly, a UK Computable General Equilibrium model (CGE) (RESCU) is being developed which incorporates energy, water, land and resources into its framework. By soft-linking the CGE model, incorporating extensive representation of different resources, with the TIMES energy systems model, it is intended to create by the end of the programme a state-of-the-art hybrid energy modelling tool for exploration of a wide range of ‘nexus’ (energy-land-water-food-climate) issues.