EXPERTS CALL FOR NEW ECONOMIC MODELLING TO MEET ENERGY TRANSITION AMBITION

- Economic modelling has not kept pace with the needs of policymakers managing the energy transition.

- Researchers make call for new generation of models to help public and industry sectors manage the unfolding energy transition.

- Use of economic models must move beyond cost-benefit analysis, which has hindered climate action in the past

The ambition of policymakers navigating the energy transition has surpassed the capacity of economic modelling for the first time, a keynote paper published today argues.

In a featured comment publication for Nature Energy, researchers - including from the Institute for New Economic Thinking and Oxford Smith School at the University of Oxford - outline the challenges facing policymakers working with traditional economic modelling across the public and industrial sectors.

The paper calls for a shift from narrow cost-benefit analysis and modelling based on economic equilibrium, towards models which capture the dynamics of the transition and represent policy ideas in real detail. These capabilities are required to match the policies governments are actually designing and implementing now, such as the ETS in China, offshore wind auctions in the UK, and the Inflation Reduction Act in the US.

Paper: https://www.nature.com/articles/s4156...