Purdue University, USA

The Environmental Impact and Sustainability Applied General Equilibrium ENVISAGE Model is a global recursive dynamic CGE model designed to assess the interactions between economies and the global environment. A set of non-linear behavioural equations is at the core of the ENVISAGE model, representing production and consumption choices of all key economic agents. The model relies on the Global Trade Analysis Project (GTAP) Data Base, covering 140+ regions. Global production is divided into 76 sectors with extensive details for agriculture, food and energy (coal mining, crude oil production, natural gas production and distribution, refined oil and various electricity generation technologies). Due to numerical and algorithmic constraints, a typical model is limited to some 20-25 sectors and 20-25 regions. The ENVISAGE model has been used in various recent research and policy studies. The Envisage Model is designed to analyse a variety of issues related to the economics of climate change: assessment of the baseline emissions (CO2, non-CO2 GHG and air pollutant emissions), impacts of climate change on the economy, adaptation by economic agents to climate change, greenhouse gas mitigation policies (taxes, caps and trade),  distributional consequences of climate change impacts, adaptation and mitigation at both the national and household level, modelling of the circular economy transition pathways, assessment of the border carbon adjustment mechanism impacts, modelling of fiscal policies geared toward specific technologies or sectors (e.g. secondary/recycled production, renewables, etc.), broader set of policies and measures beyond/outside energy sector: trade policies (changes in tariff/non-tariff barriers), fiscal reform policies, etc., assessment of the changes/shifts in preferences for food, energy, transportation services, etc. (for final or intermediate users). The model provides a rich set of economic and environmental outputs, including changes in welfare, GDP, output, producer and consumer prices, exports and imports, value-added by sectors, emissions/carbon prices, energy balances, etc. Greenhouse Gas Emissions, including CO2 emissions from fossil-fuel combustion and industrial processes, as well as non-CO2 emissions from various economic activities are represented in the model also. Model incorporates a flexible system for incorporating any combination of carbon taxes, emission caps and tradable permits. Climate module that links greenhouse gas emissions to atmospheric concentrations combined with a carbon cycle that leads to radiative forcing and temperature changes. Model is set up to incorporate a feedback loop that links changes in temperature to impacts on economic variables such as agricultural yields or damages created by sea level rise (parametrization of the corresponding functions is required based on the regional or country-specific data). Emissions of nine air pollutants are tracked in the model. Changes in air pollutant emissions can be further linked to the global atmospheric source–receptor model (TM5-FASST) for the assessment of broad range of pollutant-related impacts on human health, agricultural crop production, and short-lived pollutant climate metrics. Border carbon adjustment tax (BCAT) assessment module, which tracks CO2 emissions embodied into trade and allows for the country and commodity-specific BCAT implementation. Endogenous coal, oil and natural gas extraction module, which mimics interactions between the fossil fuel supply curves and their depletion that ultimately drive the production of fossil fuel reserves and their market price. A research and development (R&D) module incorporates R&D expenditures to the knowledge stock with a distributed lag structure. The knowledge stock influences an endogenous component of labour productivity growth. Model allows for the (multi-region input-output) MRIO trade specification with an agent-based demand for imports by region of origin.

.