Refinements in energy economic modeling for policy purposes

Abstract

The purpose of this paper is to demonstrate how clarity in energy economic modeling may be achieved for policy purposes. Clarity is accomplished by extracting the essential economic relationships from complex computer-based models. The resulting equations are then integrated with other supply and demand equations to determine equilibrium prices and quantities. Economic principles are closely followed in the extraction and integration process in order to have not only a clear, but also a meaningful equilibrium system. Several solutions are computed to show the kinds of assumptions behind the computations and to suggest the types of inferences which can be drawn. Results of the study show that..