Modelling
Annex 1. Technical specifications of the Threshold 21 (T21) World model
Finding that currently available national and global planning models are either too detailed or narrowly focused, and perhaps too decision oriented and prescriptive, this study proposes an approach that a) extends and advances the policy analysis carried out with existing tools by accounting for the dynamic complexity embedded in the systems studied, and b) facilitates the investigation and understanding of the relations existing between energy and society, economy and the environment. This is crucial, since understanding the characteristics of real systems, feedback, delays and non-linearity is fundamental for the correct representation of structures, whose behaviour is outside their normal operating range (Sterman 2000; see also Figure 1). The inclusion of cross-sectoral relationships - social, economic and environmental
- allows for a wider analysis of the
implication of policies by identifying potential side effects or longer-term bottlenecks for development. In other words, a policy can have very positive impacts for certain sectors and create issues for others. Also, successful policies in the longer-term may have negative short-term impacts, for which mitigating actions may be designed and implemented.
As indicated earlier, the approach proposed uses System Dynamics as its foundation and incorporates various methodologies, such as optimisation (in the energy sector) and econometrics (in the economic sectors). The integrated global model is used to: (1) provide an integrated analysis and evaluation of investment choices; (2) generate projections of future developments (though acknowledging that long-term accurate projection cannot easily be produced, even when simulating a large number of endogenous key variables (Sarewitz 2000); (3) increase the understanding of the relations underlying the system analysed; and (4) and bring consistency to models.
The Threshold21 (T21) World model (T21-World) is structured to analyse medium- long-term development issues. The model integrates in a single framework the economic, the social, and the environmental aspects of development planning. T21-World modelling structure includes both monetary and physical indicators, to fully analyse the impacts of investments on natural resources, low-carbon development, economic growth and job creation. Key characteristics of the model are highlighted below.
Boundaries: Variables that are considered an essential part of the development mechanisms, object of the research, are endogenously calculated. For example, GDP and its main determinants, population and its main determinants, and the demand and supply of natural resources are endogenously determined. Variables that have an important influence on the issues are analysed, but those that are only weakly influenced by the issues analysed or that cannot be endogenously estimated with confidence are exogenously represented.
Granularity: The T21-World model presented in this chapter is a global model, with no regional or national disaggregation; although, the model is routinely developed for specific countries, and is applicable at other scales such as communities.27
Nonetheless, the
main social, economic and environmental variables of T21-World are disaggregated in considerable detail. For example, population is divided into 82 age-cohorts and 2 genders, and the age-gender distinction is used in most social indicators; production is divided into industry, services and agriculture, this last further divided into crops, fishery, animal husbandry and forestry; land is divided into forest, agriculture, fallow, urban and desert. Finally, given its level of aggregation, the model is generally based on global average values for variables such as unit costs and prices.
Time horizon: T21-World is built to analyse medium- to long-term development issues. The time horizon for simulation begins in 1970 and extends to 2050. Beginning the simulation in 1970 ensures that, in most cases, the historical patterns of behaviour characterising the issues being investigated can be replicated by the model.
Modules, sectors and spheres: T21-World is a relatively large model, which includes more than 200 stock variables and several thousand feedback loops. Because of its size and level of complexity, the structure of the model has been reorganised into smaller logical units, called modules. A module is a structure, whose internal mechanisms can be understood in isolation from the rest of the model.28
27. As it is emphasised later on in the text, although it is possible to understand the internal mechanism of a specific module in isolation from the rest of the model, the fully understanding of its functioning and relevance requires studying its role in the whole model’s structure.
28. For more information, see Bassi and Baer (2009), Bassi and Yudken (2009), Bassi and Shilling (2010), Bassi et al. (2009a, 2009b, 2010), Magnoni and Bassi (2009), Pedercini and Barney (In Press), Yudken and Bassi (2009).
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The 80 modules comprising T21-
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