Expert Meeting on Modeling for Carbon Pricing Instruments (April 2013)

Discussion focused on modeling work that informs a policy decision on carbon pricing instruments and on modeling work that informs specific design of carbon pricing instruments once a policy decision has been made. Key issues included: (i) purpose of the analysis; (ii) framing of questions to be analyzed; (iii) selected/considered modeling approach (and why); and (iv) results, along with key caveats and considerations (as appropriate).
Apr 24 - 25, 2013
Washington, DC
Day 1: April 24, 2013
9:00 Registration
1. Opening and Introduction
PMR Co-chairs: Martina Bosi, PMR Secretariat and Carter Brandon, World Bank
Joëlle Chassard, World Bank
2. Setting the Stage: Instruments and Modeling Tools
This introductory session built a common language among participants on carbon pricing instruments and on modeling tools.
Ian Parry and Eliza Lis, IMF
Overview of Carbon Pricing Instruments
Felix Matthes, Öko Institut
 Select, Design and Assess Carbon Pricing Instruments: the Landscape of Modeling Tools
10:45 Break
3. Foundation for a Work Program on Modeling of Carbon Pricing Instruments
After presentations by Brazil and China, all participants described their work and needs in the area of modeling carbon pricing instruments. Questions included: What are the carbon pricing instruments being considered/planned in the participating countries? What is their status (e.g., consideration, planning, design, implementation)? What are the questions for which modeling is expected to help provide insights? Are the existing modeling tools and datasets analysis-ready and available for/in the countries? What are the needs/expected needs? A brief introduction of relevant activities by World Bank partners concluded the session.
Beatriz Soares da Silva, Ministry of Finance, Brazil
Brazil: Perspective on Plans for Modeling Work in Brazil
Zhang Yaxiong, Information Center, China
China: Perspective on Modeling Work on Emissions Trading
12:15 Overview of World Bank Activities in Modeling and Assessment of Climate Policy (research, technical assistance, and knowledge mgt)
12:40 Lunch
4. Building Scenarios to Assess Carbon Pricing Instruments
Countries exchanged views, experiences, and plans on considerations and challenges when developing reference cases and carbon pricing scenarios.The general discussion included these questions: What are the key elements (e.g., variables, assumptions, approach, consultations) for building a reference case scenario that is credible among the stakeholders? What are the key challenges for models to capture drivers of economic growth and emissions trajectories (as well as changes in trajectories)? How to manage data gaps? How do we go about the uncertainties associated with a range of forward-looking input parameters in the models?
Allen Fawcett, Energy Modeling Forum
Issues and Concepts in Projecting Baseline Emissions
Sixten Holm, Danish Energy Agency
Iván Islas Cortés, Instituto Nacional de Ecología y Cambio Climático, Mexico
Mexico: National Baseline - A Comparison Exercise in Collaboration with Denmark
Erika Jorgensen, World Bank
Low Emissions Development Studies in Poland and Macedonia
15:30 Break
5. Assessing Macro-economic and Sector-wide Impacts
This session focused on experiences and plans with computable general equilibrium models and other macro-economic models and sectoral models to assess impacts on, for example, growth and investment, fiscal revenues, competitiveness, employment, and emissions. The country presentations were followed by a general discussion covering questions including: How applicable are these modeling tools to the questions/issues arising in countries? What are the limitations and what has to be done to customize the tools? What models, if any, have already been used in countries to inform other policy decisions (e.g., macro/sector impacts of policies) that may also be applicable in context of carbon pricing instruments? How to compare, interpret, and reconcile results from different models?
Allen Fawcett, Environmental Protection Agency, United States
US: Insights and Experience on Analyses of Proposed Federal Climate Bills
Tom van Ierland, DG Climate Action, European Commission
EU: Insights and Experience on Analysis of EU-ETS
Chaiwat Muncharoen, Greenhouse Gas Management Organisation, Thailand
Thailand: Perspective on Assessing Macro-economic and Sector-wide Impacts
17:15 Break
6. Introduction to the Platform for Climate Smart Planning
The Platform for Climate Smart Planning (‘Platform’) aims to facilitate access to well-established climate smart planning tools, approaches and data developed worldwide and provide guidance on their use to support developing countries with plans for low emissions climate resilient growth. The Platform will include elements of crowd-sourcing from an active, participatory community for faster exchange, learning, and innovation. As the Platform matures, it will allow for the expansion of datasets (including their updating), for the integration of tools and data, for the enhancement of existing tools and the development of new ones. The team presented a prototype of the Platform and answered questions on how this initiative could address the needs of different countries.
Philippe Ambrosi and Ana Bucher, World Bank
Introduction to the Platform for Climate Smart Planning
18:30 Reception
Day 2: April 25, 2013
7. Assessing Impacts on Industry
This session focused on experiences, challenges, and plans with modeling impacts on sectors/industries, including competitiveness and related leakage issues, as well as compensation measures. What are the issues and emerging evidence on the impacts of carbon pricing instruments on industry? What are the designs/measures to address them? What are the approaches, tools and data required for this analysis?
Martin Ross, Duke University
 US: Insights from Modeling on Sectors of the US Economy
Felix Mathes, Öko Institute
EU: Insights from the EU-ETS
Tom van Ierland, DG Climate Action, European Commission
EU: Insights from the EU-ETS
Luis Gonzáles, Ministry of Finance, Chile
Chile: Insights and Perspectives
10:30 Break
8. Assessing Impacts on Households
This session focused on experiences, challenges, and plans with modeling distributional impacts on households via income and compensation measures. What are the issues and emerging evidence on the impacts of carbon pricing instruments on households? What are the designs/measures to address them? What are the approaches, tools and data required for this analysis?
Terry Dinan, Congressional Budget Office, United States
US: Analysis of Distributional Consequences in US of Carbon Pricing Instruments
Peter Janoska, National Treasury, South Africa
South Africa: Perspective on Compensation/Revenue Recycling Measures
William Space, Regional Greenhouse Gas Initiative
 Insights from Modeling of Impact of RGGI on Households
12:15 Lunch
9. From Modeling Outputs to Inputs into Policy Discussions
This session will allow where participants to discuss and share experiences and plans on how to integrate and communicate insights from modeling and technical analysis into respective domestic policy debates on low emissions development strategies, the potential role of carbon pricing instruments, and their design. What are the issues, considerations, experiences with the results of modeling and technical exercises in informing policy debates/decisions? Are there emerging lessons learned?
Bertrand Magne, OECD
OECD Modeling and Contributions to Policy Discussions
14:45 Break
10. Building a Work Program Together
Participants are invited to identify (i) needs; (ii) areas of possible cooperation, including to improve learning and sharing among countries; and (iii) ideas for next steps, as relevant. What are the key questions the work program should aim to help answer? What are the key elements (as well as themes) of the work program? How do we build capacity sustainably and help maintain/update such tools for future use (as policies and questions evolve)? How do we ensure synergies and complementarity with other relevant initiatives?
General Discussion
16:30 Wrap up
End of Expert Meeting