Beyond the Energy System: Modeling Frameworks Depicting Distributional Impacts for Interdisciplinary Policy Analysis

Abstract

Since the signing of the 2030 Agenda for Sustainable Development by the United Nations Member States and the Yellow vest movement, it is clear that emission‐reducing policies should consider their distributional impacts to ensure a sustainable and equitable growth compatible with the Paris Agreement goals. To this end, the design of environmental and energy policies should be accompanied by an interdisciplinary analysis that includes potential effects on distinct groups of society (defined by income, age, or location), regions, and sectors. This work synthesizes common modeling frameworks used to assess technical, socio‐economic, and environmental aspects in policy analysis and the recent progress to portray distributional impacts in each of them. Furthermore, the main indicators produced by each method are highlighted and a critical review pointing to gaps and limitations that could be addressed by future research is presented.

Sustainable Energy Development: History and Recent Advances

“…K. Akimoto et al [126] stressed the importance of a well-thought-out strategy for economic growth to deal with climate change and sustainable development indicators. Integrative assessment frameworks are often applied to analyze these metrics objectively [127][128][129][130][131][132]. Synergizing energy development with long-term sustainability is an area that necessitates more study and further investigation as the current global paradigm views energy as a subset of climate change policy's many related components.…”

Towards a Common Methodology and Modelling Tool for 100% Renewable Energy Analysis: A Review

“…According to the findings in [76][77][78], there are a variety of strategies that are employed by ESA for use in strategic, tactical, and operational decision making at every time scale, from short, to mid, to long term [22,31,[79][80][81][82][83][84][85][86][87]87]. Since good decision making must encompass the different concerns within the dimensions of sustainability (i.e., social, economic, and environmental difficulties), such as depleting fossil fuels reserves, greenhouse gas emission reduction, resource supply and price changes, and global warming, energy systems require adaptation and evolution.…”

“…Evaluating policy mechanisms, market structures, and regulatory frameworks that can facilitate the transition to 100% renewable energy and modelling the impact of different policies, incentives, and subsidies on investment decisions, market dynamics, consumer behaviour, etc., are important [62,76,[167][168][169][170][171][172][173]. This will help inform policymakers and stakeholders about the necessary policy, regulatory, and market mechanisms to support the transition to 100% renewable energy, including incentives, targets, and regulations promoting renewable energy deployment and investment.…”

Modelling of Fuel- and Energy-Switching Prices by Mean-Reverting Processes and Their Applications to Alberta Energy Markets

“…The paper by Montenegro et al (2021) [18] reviews the recent literature on the modelbased methods utilized for policy analyses in the areas of economics, energy systems, and environmental damages. It also explores ways in which these models and methodologies depict distributional impacts, the main indicators obtained from their results, shortcomings of each modelling methodology, and suggest improvements for future research.…”