Supporting Green Economy in Kazakhstan and Central Asia for low carbon economic development – TIMES, CGE, SD –

During the Winter 2021 semi-annual Energy Systems Analysis Program (ETSAP) Meeting on 29th – 30th November 2021, DIW Econ presented a novel approach to integrate three different models – energy system TIMES model, macroeconomic CGE model and sectoral system dynamics (SD) model –into a hybrid integrated assessment model to support the elaboration of a long-term low-emission development strategy (LEDS) for Kazakhstan.

While the idea of coupling different model types to study transformation and decarbonisation of the energy sector and the economy as a whole is not new, to date, practical attempts of coupling remain limited to a simple one-way data exchange while omitting complex circular iterations of model runs and/or convergency checks. DIW Econ and its partners, the NASU Institute for Economics and Forecasting and KnowlEdge Srl, implemented a novel approach to support the elaboration of a low-emission development strategy (LEDS) of Kazakhstan.

This approach integrates three models of different classes – the bottom-up energy system TIMES model, the top-down macroeconomic CGE model and the stochastic sectoral SD model – into a hybrid integrated assessment model in an iterative soft-linking process. Through extensive exchange of data between the models, a set of exogenous assumptions of each model is replaced by endogenous outputs of other models, increasing the overall breadth and quality of the hybrid model.

Moreover, a special automated data exchange mechanism was developed between TIMES and CGE to tackle the challenge of processing a large amount of data from the detailed TIMES format into the aggregated CGE format. Overall, model coupling allows for a comprehensive analysis of decarbonisation pathways, covering all emission-relevant sectors in detail and examining the socio-economic-environmental nexus.