CGE model PLACE

Abstract

PLACE is a static multi-region, multi-sector computable general equilibrium (CGE) model designed to assess the economic impact of energy and climate policies. Policies are typically analyzed using a comparative static approach, in which a situation with policy interference is compared to a situation without policy interference (often termed "baseline" or "business-as-usual"). Based on general equilibrium theory, PLACE incorporates micro-economic mechanisms within a comprehensive macro-economic framework, which distinguishes it from other large-scale economic models such as multivariate econometric models and input output analysis. The particular strengths of the CGE approach is the scope for quantifying distributional impacts of policies and the ability to reflect complex sectoral adjustments. This document constitutes technical documentation of the PLACE model and aims to present the underlying algebra and data sources that were used at different stages during the model's development.