Introducing detailed land-based mitigation measures into a computable general equilibrium model

Abstract

We propose a new climate change mitigation assessment method focusing on agriculture, forestry, and land-use change sectors by coupling the computable general equilibrium (CGE) model with a bottom-up type technology model. The CGE model covers the entire economic market, but includes a rough description of mitigation measures, whereas the bottom-up type technology model takes into account abatement cost and mitigation effects of individual mitigation measures, but only focuses on a few sectors. The coupled framework enables us to connect relevant conditions and to complement the shortcomings of each model. As a test, we applied our method to Indonesia, which has set a national greenhouse gas emissions reduction target for 2020. A large proportion of Indonesia's greenhouse gas emissions are from the land-use sector. We assessed the differences in modeling behaviors between the CGE models with and without coupling the bottom-up type model. The two primary findings were: 1) consumption loss estimated by the coupled CGE (1.2%) was larger than the loss estimated by the uncoupled model (0.5%), because the emission reduction estimated by the bottom-up model was less than the standalone CGE's estimate; and 2) consumption loss caused by achieving the reduction target by 2020 in Indonesia strongly depends on the assumption of mitigation costs and available land area for the emission reduction measures.