Full Paper - ESEE 2011 - Advancing Ecological Economics

Changes to the direct emissions impact associated with energy consumption by sector in the rest of
the world regions (which will have an impact on any imported goods) could also be modelled in a
similar energy scenario tool. The data availability for the rest of the world regions is limited at
present to only the amount and type of fuel consumed by sector. Information on the energy services
this fuel is used for is not available from GTAP. At present energy scenarios from the rest of the
world regions will reflect emission reduction pathways consistent with 2 and 4 o C pathways.
The direct industry emissions pathways in each scenario will be incorporated into the EEMRIO model
which can then be used to calculate the emissions embedded within the supply chains of the goods
and services produced using the Leontief inverse IO equations described in Appendix A.
Consumer demand scenario tool extension
The overall change in the level of household, government, capital investment and export
consumption will be determined by an exogenous economic growth rate that can vary between
scenarios. The UK final demand scenario tool will be used to model the breakdown of this overall
level of consumption between the different categories and the different products within those
categories. In addition it will also be used to model different levels of expenditure on domestic and
imported goods and where those imports originate between the regions of the model (Other EU,
Annex B and non-Annex B).
Assumptions related to the changes in consumer demand will be determined through a combination
of scenario workshops, expert advice and consumer focus groups. The consumption data generated
by the consumer demand framework extension will feed into the EEMRIO which multiplies the
consumption of goods and services by the estimated emissions embedded in the full supply chain of
those goods or services.
The overall modelling framework
The complete modelling framework attempts to bring together appropriate aspects of some of the
latest modelling techniques to add a new perspective to the policy, consumer and industry options
available under different climate change scenarios. It will provide a flexible scenario quantification
method that will enable the user to examine the both supply-side and demand-side policies and
practices simultaneously. Using an EEMRIO as a basis means that the impacts of trade and
consumption patterns can also be easily modelled within the framework, exploring wider issues of
influence beyond national boundaries. The framework can also consider both strategies for
territorial emission reductions through the decarbonisation of an energy system and the level and
type of consumption that could be supported by this system in order to remain within a carbon
budget. It will also add product level detail for specific products, which will generate detailed data
for the scenario narrative and can be easily expanded to other products in the future.
Data Sources and Limitations
The limitations of the data sources and of the IO approach mean that the quantitative results from
the model should be carefully interpreted. For example, the fine level of disaggregation between
consumer categories could suggest the emissions impact behind the production of these goods and
services is equally well disaggregated. This is not the case as firstly the attribution of emissions to
sectors in the baseline is uncertain and in addition there is limited data upon which to base any
judgement as to how for example the technological improvements of the insurance sector (GTAP 53)
could differ from other financial intermediation (GTAP 52). Therefore a comparison of the relative
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