G-Cubed model 20C

Table of contents

The 20C model has been used extensively to estimate the impact of various environmental and economic shocks and policies (see McKibbin and Wilcoxen 2013 and McKibbin et al. 2018 and 2020, IMF 2020, 2021). It has 11 regions and 20 sectors.

Regions

In this version of G-Cubed, the regions are:

  1. United States (USA)
  2. Japan (JPN)
  3. Australia (AUS)
  4. Europe (EUR)
  5. Canada (CAN)
  6. China (CHN)
  7. India (IND)
  8. Rest of the OECD (ADV)
  9. Rest of World (ROW)
  10. Russian Federation (RUS)
  11. Oil-Exporting developing countries (OIL)

Sectors

Each region aggregates production into the same 20 sectors:

  1. Electricity distribution
  2. Gas extraction and utilities
  3. Petroleum refining
  4. Coal mining
  5. Crude oil extraction
  6. Construction
  7. Other mining
  8. Agriculture and forestry
  9. Durable goods
  10. Nondurable goods
  11. Transportation
  12. Services
  13. Coal generation of electricity
  14. Natural gas generation of electricity
  15. Petroleum generation of electricity
  16. Nuclear generation of electricity
  17. Wind generation of electricity
  18. Solar generation of electricity
  19. Hydroelectric generation of electricity
  20. Other generation of electricity

13 of the 20 sectors articulate the production and distribution of the energy required to drive economic activity and the resulting greenhouse gas emissions.

Sector 1 captures the distribution of electricity. Sectors 13 to 20 split electricity generation by type of energy source, enabling detailed analysis of shifts in fossil-fuel dependency. Sectors 2 to 5 captures fossil-fuel extraction and processing for coal, gas, and oil. The 7 non-energy sectors capture all other types of production.

The full set of 20 sectors provide detailed understanding of energy dependencies for each region while also differentiating the regions in terms of economic specialisation.

Electricity generation sectors

The endowment and factor inputs of the GTAP electricity sector is split across the electricity generation sectors in proportion to the gigawatt-hours (GWh) of electricity production by generation type for each country used to allocate electricity sector emissions among electricity generation sectors. Data on electricity production is sourced from Ember Climate.

Equations

Review the equations using the documentation created by the SYM processor.

Carbon dioxide emissions

Carbon dioxide emissions are associated with the usage of fossil fuels in the production process across all sectors. They depend on the scale of output from each sector and the fossil-fuel intensities of each sector.

References

McKibbin, W. J. & Wilcoxen, P. J. (2013), “A Global Approach to Energy and the Environment: The G-cubed Model”, Handbook of CGE Modeling, Chapter 17, North Holland, pp 995-1068.

McKibbin, W. J., Morris, A. C., Wilcoxen, P. J. & Cai, Y. (2012), “The Potential Role of a Carbon Tax in US Fiscal Reform”, The Brookings Institution.

McKibbin, W. J., Morris, A., Wilcoxen P. J. & Liu, L. (2018), “The Role of Border Adjustments in a US Carbon Tax”, Climate Change Economics vol 9, no 1, 1-42.

McKibbin, W. J., Morris, A., Wilcoxen P. J. & Panton, A. (2020), “Climate change and monetary policy: Issues for policy design and modelling”, Oxford Review of Economic Policy, 36(3), 579–603.