ACEEE Hosts Workshop on Economic Modeling for Energy Policy — "Energy and Economic Policy Models"

As decision makers wrestle with challenging long-term energy and climate-related issues, the need for improvements to economic modeling for policymakers takes on new urgency. In an effort to highlight opportunities to improve policy modeling, ACEEE sponsored a successful workshop in Washington, D.C. on November 16 and 17, 2006: "Energy and Economic Policy Models: A Re-examination of Some Fundamental Issues." The workshop was hosted by ACEEE and the University of California. It was the kickoff event in a series of planned meetings focusing on modeling. Over 50 experts in the field of economic and policy modeling participated in the workshop and made presentations on a variety of topics critical to energy and climate modeling.

Participants explored several important topics, such as whether economic modeling is the right language to investigate things like long-term climate change policy. The implications of climate change policy span multiple generations and regions of people, raising the question of whether economic modeling can capture the complexities and broad consequences of climate change. Another prevailing theme was the need for better and more extensive data collection to ensure a more robust characterization of renewable energy resources, as well as greater energy efficiency improvements, for both supply and demand-side resources. Presenters also explored how to better characterize technologies within energy and climate models, especially techniques that highlight the dynamic tradeoff between more productive capital and standard patterns of energy consumption.

The issue of transparency in economic and policy models was another hot topic. "Participants had a number of suggestions on how to better present model results, aiming to bridge the growing disconnect between policymakers and economic modelers," said Maggie Eldridge, ACEEE Policy Program Research Assistant. Participants suggested a collaborative economic modeling process where both economists and policymakers are involved.

"There was both a lot of interest and some very productive discussion. More importantly, there were also some useful ideas about next steps forward. Based on that discussion, we'll have a working outline of those next steps early in the new year," stated John A. "Skip" Laitner, Senior Economist at ACEEE and co-coordinator of the event. Among the anticipated future activities to be sponsored by ACEEE are training workshops on modeling energy policy and a series of working papers to explore new directions in energy policy modeling.

The workshop resulted in a number of papers and presentations. The full agenda, list of participants, and discussant comments on the various presentations are also available.