19th Ruhr Graduate Summer School

Objectives

To combat climate change, many countries have committed to achieving net-zero emissions by 2050. The successful transition towards a zero-emission economy will depend on the ability to power energy-related processes with electricity from carbon-free renewable energy sources. This workshop will present state-of-the-art computable general equilibrium (CGE) models that are widely used in applied economic research to study the impacts of emissions reductions policies. The standard topdown framework of CGE models will be complemented by a bottom-up representation of the electricity system to capture the pivotal role of carbon-free supply and demand technologies for decarbonizing the economy as a whole.

The course will build on seminal peer-reviewed publications combining methodological expertise on hybrid bottom-up/top-down modeling with policy-relevant applications, ranging from technology-specific regulations (e.g. green subsidies, renewable portfolio standards, energy efficiency standards, technology bans) to economy-wide emissions pricing and revenue-rebating schemes (green tax reforms). Guided by a series of lectures and hands-on modeling exercises, participants will develop step by step the capacity to re-formulate model codes towards their own needs in academic research or policy consultancy. Mathematically, the models are formulated and implemented as so-called “mixed complementarity problems” (MCP), stating complementarity of economic equilibrium conditions with associated economic decision variables. The fundamental strength of the MCP format (beyond the standard approach of treating equilibrium conditions as a system of nonlinear equations) is the ability to handle corner solutions and regime shifts that are central to the analysis of sorting decisions, such as discrete technology choices. For the computer implementation of the numerical models the course uses the high-level programming language GAMS (Generalized Algebraic Modeling System) whose notation closely follows standard matrix algebra. The fundamental strength of GAMS lies in the ease with which mathematically defined models can be formulated and solved.

The explicit algebraic formulation of general equilibrium conditions and the parameterization of functional forms to characterize technologies and preferences can become very tedious and error-prone, in particular for more complex production and consumption patterns. MPSGE (Mathematical Programming System for General Equilibrium) – which runs as a subsystem under GAMS – provides a short-hand non-algebraic representation for general equilibrium models, releasing economists from the need to write down complicated equilibrium conditions explicitly as well as from the need to set up tedious calibration routines for the parameterization of demand and supply functions. The workshop will show in detail how to transform algebraic CGE models into non-algebraic MPSGE syntax, which can substantially lower the entry barriers and time cost of CGE analysis.

Material and teaching is in English. Registered participants will receive the teaching material prior to the start of the workshop such that they can prepare in advance. Teaching will combine lectures on theoretical underpinnings of policy assessment with numerical model applications based on peer-reviewed publications.

Content

Part 1: Economic Equilibrium, Mixed Complementarity and Mathematical Programming

• Economic equilibrium in mixed complementarity format

• Mathematical programs: duality and complementarity

   

Part 2: Bottom-up activity analysis of the electricity system

• Stylized models of electricity supply and emissions regulations 
• Optimal electricity dispatch under CO2 emissions pricing

 
Part 3: Integration of bottom-up electricity market models into top-down CGE models

•  Standard CGE representation of an energy-economy system
• Model calibration to observed economic data (functional forms)
• A hybrid bottom-up/top-down model for climate policy analysis

Part 4: MPSGE implementation of CGE models

•  MPSGE syntax
• Converting CGE models from algebraic MCP formulations into MPSGE
• From static to dynamic policy analysis

 
Part 5: CGE-based impact assessment of net-zero emissions policies

•  Multi-sector multi-region (baseline) projections until 2050
• Build your own large-scale bottom-up/top-down CGE model calibrated to baseline data
• CGE analysis: the role of carbon backstop and negative emissions technologies for reaching net-zero
  emissions

Registration

Please contact the course coordinator if you have any questions:

M. Sc. Mehmet Burak Akren
University of Duisburg-Essen
Department of Economics
45117 Essen, Germany
Telephone: +49 (0)201-18-32310
Fax: +49 (0)201-183-3974
email: Mehmet.Akren(at)vwl.uni-due.de

The registration deadline is September 5, 2025. The maximum number of participants is restricted to 16!
Slots are guaranteed only upon full payment of fees through the course coordinator. Cancellations
will be fully refunded if made prior to September 5, 2025. No refunds will be made after the registration
deadline. 

Note the following disclaimer and limited liability: The program and the list of instructors are
confirmed and correct at the time of publication. In case of any serious circumstances or acts of nature
beyond control of the organizers, such as for example illness, death, cancellation of flights etc., the
organizers aim for an adequate substitution. In the very unlikely, but still possible case, the maximum
liability of the organizers is limited to the tuition. The organizers do not cover any other costs of the
participants, such as travel bookings, visa fees, etc. The organizer also reserves the right, in the unlikely
case of very limited enrolment, to run the workshop with one instead of two external instructors.