Energy-economy linking in MARKAL-MACRO: interplay of nuclear, conservation and CO<SUB align=right>2 policies in Sweden

Abstract

The interface between the energy system and the macroeconomy and the use of linked energy-economy models are studied. Linked systems-engineering and macroeconomic models (such as MARKAL-MACRO) are found to fill an important niche for national and regional energy systems analyses. The Reference Energy System is used to distinguish new analytical abilities with this type of energy-economy model. The properties of three descriptors used to model the interface are examined. The model is applied to three important policy issues in the Swedish energy system restrictions of CO2 emissions, phasing out of nuclear power, and the availability of energy conservation. The main findings are: simultaneously restricting CO2 emissions and phasing out nuclear power is very costly; the major part of the CO2 reduction is accomplished by technological changes within the energy system; and the rebound effect of energy efficiency measures is larger with CO2 restrictions than without.