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RTI Applied Dynamic Analysis of the Global Economy (ADAGE) Model

ADAGE is a dynamic computable general equilibrium (CGE) model capable of investigating economic policies at the international, national, U.S. regional, and U.S. state levels. CGE models such as ADAGE combine economic theory and empirical data to estimate policy effects, while accounting for all interactions among businesses and consumers.

ADAGE typically solves in 5-year time intervals from 2005 to around 2050 and can be used to explore dynamic effects of many types of energy, environmental, and trade policies. Of particular note is its ability to investigate climate change mitigation policies at a range of geographic scales.

ADAGE is designed with an integrated, modular structure (see figure). Each module relies on different data sources and has different geographic scopes, but all have the same overarching theoretical structure. The internally consistent, integrated framework connecting ADAGE’s modules allows its components to use relevant policy findings from other modules with broader geographic coverage, while avoiding computational issues that preclude solving for all U.S. states and world nations simultaneously.

ADAGE Model

The comprehensive framework of ADAGE begins with the International Module. Based on Global Trade Analysis Project (GTAP) data, this component of ADAGE allows the model to conduct international policy investigations on any group of nations included in its database. After the GTAP data and economic/energy forecasts from the Energy Information Administration (EIA) enter the model structure, policies can be examined.

From these studies, findings on prices of traded goods and, in the case of climate change mitigation policies, greenhouse gas (GHG) permit prices can be passed to the U.S. Regional Module (based on IMPLAN economic data and EIA energy data).

ADAGE tracks fuel consumption in physical units (BTUs) to determine CO2 emissions and has also endogenized emissions abatement costs associated with five non-CO2 GHG gases (CH4, N2O, HFCs, PFCs, and SF6). Although computational constraints limit the total size of nonlinear, intertemporally optimizing CGE models, ADAGE is flexible across regions and industries in its databases and can include specific regions and industries of interest.

ADAGE Model Documentation

Papers and Policy Analyses

Presentations

  • Ross, M.T. 2009. "Effective Global Climate Change Policy: Technical and Regulatory Challenges – Economic Analysis of Climate Change Mitigation Policies." Presented at RTI Fellows Seminar Series: Effective Global Climate Change Policy: Technical and Regulatory Challenges, Washington, DC. June 9, 2009. http://www.rti.org/files/fellowseminar/fellowseminar_climatepolicy_ross.pdf
  • Fawcett, A. 2009. "EMF 22: Overview of U.S. Climate Policy Scenarios." Presented at EMF Briefing on Climate Policy Scenarios: U.S. Domestic and International Policy Architectures. June 4, 2009. http://emf.stanford.edu/events/emfbriefing_on_climate_policy_scenarios_us_domestic_and_international_policy_architectures/
  • Ross, M.T., DeAngelo, B., Beach, R.H., Gallaher, M.P., Pattanayak, S.K., Poulos, C., and Waldhoff, S. 2009. "Representing the impacts of climate change in a US economic model." Presented at the University of Copenhagen International Scientific Congress: Climate Change: Global Risks, Challenges, & Decisions, Copenhagen, Denmark. March 12, 2009. http://www.iop.org/EJ/article/1755-1315/6/52/522007/ees9_6_522007.pdf?request-id=49d2d7d6-b069-4138-925a-88b5bac62d5f
  • Pattanayak, S., M. Ross, B. Depro, C. Timmins, S. Bauch, K. Alger, K. Wendland. 2008. "Mediating health impacts of climate change: Evidence from regressions and CGE modeling of forest conservation in Brazil." Presented at the American Public Health Association Conference, San Diego, CA. October 29, 2008. http://apha.confex.com/apha/136am/webprogram/Paper185658.html
  • Ross, M.T. 2008. "EMF-22 U.S. Cap-and-Trade Scenarios (Cost-Effective Reductions)." Presented to the Stanford EMF-22 Transition Policy Subgroup at the International Institute for Applied Systems Analysis, Laxenburg, Austria. Sept. 25-26, 2008.
  • Murray, B. and M.T. Ross. 2008. "Economic Modeling of Federal Cap-and-Trade Legislation: Variations on the Lieberman-Warner Bill." Presented at the RFF Workshop on Federal Policy to Reduce U.S. Greenhouse Gas Emissions Workshop. Resources for the Future, Washington, DC. June 18, 2008. http://www.rff.org/Documents/Events/080618_Federal_GHG_Emissions_Policy/080618-FedGHG_Murray2_slides.pdf
  • Ross, M.T. 2007. "Assessing Cap-and-Trade Proposals at the Global, National, and Sub-national Scales." Presented at the Nicholas Institute Symposium on the Economic Modeling of Federal Climate Legislation. Washington DC. July 18-19, 2007. http://www.nicholas.duke.edu/econmodeling/agenda.html
  • Ross, M.T. 2004. "Distributional Implications of Regional Climate Change Policies in the U.S.: A General Equilibrium Assessment." Presented at Association of Environmental and Resource Economists Workshop, Estes Park, CO. June 15, 2004.
  • Ross, M.T. 2004. "Regional Modeling and Linking Sector Models with CGE Models." Presented at the Forestry and Agriculture Greenhouse Gas Modeling Forum. Shepherdstown, WV. October 12-15, 2004. http://foragforum.rti.org/papers/index.cfm

 

RTI Electricity Markets Analysis (EMA) Model

The RTI Electricity Markets Analysis (EMA) model is a dynamic linear-programming model of U.S. wholesale electricity markets. It is designed to examine how mid- to long-term policies affecting these markets will influence electricity supply decisions, electricity generation costs, and electricity prices. To accomplish this, the model determines least-cost methods for meeting electricity demand on a seasonal and time-of-day basis, while considering factors such as growth in demand, peak demands, and limits on emissions.

The figure below illustrates the basic structure of the EMA model. The model can estimate impacts associated with a variety of policies related to the generation mix, limits on criteria pollutants, and cap-and-trade systems to reduce carbon dioxide emissions.

If desired, the electricity model can be linked to the RTI ADAGE economic model. This linkage allows the two models to iterate to a solution that considers how changes in electricity markets affect fuel markets and the rest of the economy, and how changes in the rest of the economy affect electricity demands and generation costs. The documentation below provides electricity market results for a carbon tax policy based on findings from the ADAGE model.

ADAGE Model

EMA Model Documentation

 


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