GreenREFORM-EU is a dynamic computable general equilibrium model for finance ministries, planning bureaus and emissions agencies. It assesses carbon pricing, subsidies, mandates and green investment alongside their effects on GDP, employment, wages, trade and public finances.
Fuel switching, electrification and carbon capture are discrete decisions. Most frameworks either leave them out of the economic model or solve a separate engineering model and pass results back and forth.
GreenREFORM-EU represents them continuously and solves them in the same equation system as the macroeconomic core. A technology-specific policy can therefore be scored for emissions and for output, employment, investment and the public finances at once.
Carbon and energy taxation, emission trading, technology subsidies, mandates and public investment, with the fiscal consequences of each.
National accounts and energy balances. The industry list comes from the data set, not from a fixed template.
No monetary policy or exchange rate. Government is an accounting framework, not an optimiser. Households buy housing services rather than holding a dwelling stock.
GreenREFORM-EU is an economic model that links the economy with energy use and greenhouse gas emissions. It is a dynamic computable general equilibrium model. This means it tracks changes over time and calculates how developments in one part of the economy affect others. For example, a carbon tax can affect energy use, prices, investment, employment and government revenue.
The model compares a baseline scenario with an alternative scenario in which a policy is introduced. The baseline describes how the economy develops under a given set of assumptions. The difference between the two scenarios shows the estimated effect of the policy. Results should therefore be understood as answers to “what happens if …?” under the chosen assumptions.
When the energy technology module is used, the model represents choices between specific technologies, such as different heating systems. These choices depend on investment, operating and energy costs, as well as each technology’s potential. Differences in technology costs allow uptake to change gradually as prices or taxes change. Technology choices and the wider economy are calculated within the same integrated system, so they influence each other.
GreenREFORM-EU combines national accounts, input-output tables, energy balances, greenhouse gas emissions data and technology data. Together, these describe how the economy operates, how energy is produced and used, and how economic activity generates emissions. Technology data add information about the costs and characteristics of alternative energy technologies.
Input-output tables describe how industries buy from and sell to each other, and how goods and services are used for consumption, investment and exports. They allow the model to trace effects through supply chains. For example, a change in electricity prices can affect the costs of industries that use electricity and, in turn, the prices paid by their customers.
The version described in the documentation is calibrated to a Danish benchmark dataset with 2020 as its base year. It distinguishes 57 industries and calculates developments up to 2050. These settings describe the documented implementation; they are not fixed requirements for every national application of GreenREFORM-EU.
The framework is designed to support national applications using country-specific data. The dataset determines elements such as the industries and goods represented in the model. Applying it to another country requires a consistent set of economic, energy and emissions data, together with relevant technology information and model assumptions. The national application must then be calibrated and checked for consistency.
A basic understanding of economic modelling, national accounts and climate policy is helpful. Running and adapting the model also requires familiarity with GAMS and Python, which are used in its implementation. You can start by exploring an existing model setup before making changes to equations or data.
You need the GreenREFORM-EU model code, the relevant datasets and a working software environment with GAMS, a suitable solver and Python. For analyses involving specific energy technologies, you also need the corresponding technology data. The code and data should belong to a compatible model setup.
Start by reproducing the baseline in an existing model setup and checking that it runs successfully. Then explore a simple policy scenario, such as a change in a carbon tax, and compare the results with the baseline. Examine how emissions, energy use, output and public finances respond, paying attention to the assumptions about how additional tax revenue is used.