The main environment-economy modelling work of the OECD rests upon the in-house models ENV-Linkages, a dynamic general equilibrium model and ENV-Growth, a macroeconomic growth model based on a conditional convergence framework.
Analysis of the long-term environmental consequences of the Covid-19 pandemic and response measures
The tools of the modelling team have been used to assess how the pandemic and response measures affect economic activity and how changes in sectoral and regional economic activity affect environmental pressures. The analysis highlights that the short-term effects are substantially larger than the long-run ones, but there is a long-term effect of 1-3% below pre-Covid baseline projections that may persist.
ENV-LINKAGES MODEL
| ENV-Linkages model | ENV-Growth model |
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- The ENV-Linkages model is a recursive dynamic neo-classical general equilibrium model (GE). A global sectoral economic model built primarily on a database of national economies (GTAP).
- Sectoral and regional aggregation of the model is flexible and adapted to each project.
- The baseline projection describes an internally consistent set of trends of all economic and environmental variables of the model. The baseline assumes no new policies for the environmental issues addressed and thus provides a benchmark against which policy scenarios can be assessed.
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- The is a two-sector model that aims at projecting GDP and per capita income levels for all major economies in the world (currently 230 countries). The model is based on conditional convergence between countries in the main drivers of economic growth: labour, human capital, physical capital, natural resources and total factor productivity.
- The model is used in the construction of baseline projections for ENV-Linkages and a former version was applied to construct OECD macroeconomic projections for Shared Socioeconomic Pathways (SSPs) for climate change. Results of these projections are reported in the article “Long-term economic growth projections in the SSPs” (Global Environmental Change, 2016).
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WORKING PAPERS
- An overview of the OECD ENV-Linkages Model (2014) presents a summary description of the OECD ENV-Linkages General Equilibrium model. The paper provides a brief description to the structure of the ENV-Linkages model and of its main equations, and describes the calibration method.
- An Economic Projection to 2050: The OECD ENV-Linkages Model Baseline (2011) describes possible future developments and is not a prediction of the future. Rather, it provides an internally consistent set of trends of all economic and environmental variables of the model. The baseline assumes no new policies for the environmental issues addressed and thus provides a benchmark against which policy scenarios can be assessed.
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