Modeling Detailed Energy-Efficiency Technologies and Technology Policies within a CGE Framework

Policy makers and analysts are raising questions about the adequacy of policy and technology representation in conventional energy and economic models. Most conventional models rely on a highly stylized and limited characterization of technology. In these models, any desired changes in energy demand are driven largely by pure price mechanisms such as energy taxes or carbon charges. In this paper, however, we explore the mapping of discrete technology characterizations and examine how cost-effective technologies and programs might prompt desirable increases in energy efficiency. Using the commercial health care sector as an example, we show how changes in energy efficiency and technology investments might be more properly represented in policy models.

Policy makers and analysts increasingly are asking questions about the adequacy of technology and policy representation in conventional energy and economic models (Worrell et al. 2003, Laitner et al. 2003, Munson 2004, Hanson and Laitner 2005, and Sanstad et al. 2006). Most conventional models (so-called