Abstract
This paper uses the RoSE transportation sector scenarios of the GCAM and REMIND energy-economy-models for the U.S. region to derive and compare these models’ intrinsic elasticities with those resulting from historical trends, estimates from the literature, and across each other. To estimate the model-intrinsic elasticities, we explore the use of dynamic linear panel data models. On the basis of 26 scenarios (panels) between 2010 and 2050, our analysis suggests that nearly all model-intrinsic elasticities with respect to final energy use are roughly comparable to each other, to those observed historically, and to those from other studies. The key difference is these models’ comparatively low intrinsic income elasticity of final energy use. This and other minor differences are interpreted through key assumptions underlying both energy-economy-models.
Highlights
As economies develop and the value added shifts from agriculture to industry to services, energy use by and CO2 emissions from transportation continue to increase in both absolute and relative terms
The most striking difference between the estimated intrinsic elasticities of the GCAM and REMIND models and the historical development is the comparatively small intrinsic income elasticity of both models. (In light of the recently introduced tight fuel economy standards for light-duty vehicles, such lower income elasticity of fuel use seems plausible; as described below, both models did not include these new tight regulations and we examine this discrepancy in more detail)
6.1 Income elasticity In GCAM, the transportation sector is implemented on the service level and driven by exogenous, scenario-specific growth in population and GDP, and endogenous generalized transportation costs (Kyle and Kim 2011); the latter are expressed as travel money expenditures plus the ratio of the value of time and average travel speed
Summary
As economies develop and the value added shifts from agriculture to industry to services, energy use by and CO2 emissions from transportation continue to increase in both absolute and relative terms (see, e.g., Schäfer et al 2009). The obtained intrinsic elasticities account for the underlying model structure, embedded functional forms, assumptions about the substitutability of energy services, along technologies and their characteristics This approach’s advantage is that the estimated elasticities can be readily compared to each other, to those from the literature, and to those underlying the historical development, irrespective of the type of energy-economymodel examined. While there is a growing body of literature on validating energy-economy-models (Schwanitz 2013; Beckman et al 2011; Wilson et al 2013), we know of no research that would have taken our approach and compared model-intrinsic elasticities to each other and historic values We apply this approach to the transportation sector. As with final energy use, the spread of REMIND prices (gray) is significantly larger compared to GCAM (black)
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