Mountain lake with skyline

Policy decisions often involve choices that will not necessarily benefit all actors in the economy and may have unintended environmental consequences. Policy makers and stakeholders need to balance trade-offs and promote synergies arising from the delivery of policy objectives. By using empirical economic models, we offer the possibility for an evidence-based policy making, as we are able to formulate policy options and quantify the economic impacts associated with them.

We develop and use single-country and global computable general equilibrium models (CGE) to assess the direct, indirect and induced impacts of potential policy interventions and exogenous shocks (e.g., climate change, Covid-19). We offer policy makers and stakeholders the possibility to assess and compare ex-ante the expected impacts of alternative policies and adaptation options across households, sectors and countries.   

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Research areas

We develop and use empirical economic models based on economic theory to address resource interlinkages at the global, regional and country level. Our Environmental Global Applied General Equilibrium (ENGAGE) model is based on up-to-date global economic data and has detailed modules on food, water, minerals, and energy. The UCL ENGAGE model focuses on global trade and supply chains and it is used to evaluate the international repercussion of domestic policies and shocks. We use detailed single-country General Equilibrium models (e.g. InvestCGE) to evaluate tailored policy options and assess their impact on the distribution of income across households. We are currently developing a UK multi-regional CGE model to assess policy impacts across 12 geographical and economic regions. 

Sustainability at the water-food-land nexus

Sand dunes

We assess the impacts of climate change and land degradation on global food production, focusing on the direct impact of climate change to crop production and the indirect impact that climate change causes to regional comparative advantages in food production. We developed a new modelling framework that simulates the Nile River System and Egypt’s macroeconomy, with dynamic feedbacks between the river system and the macroeconomy. Moreover, we assessed the benefits of cooperative adaptive management of the Nile to cope with deep uncertainties associated to climate change.

Energy systems transitions to achieve net-zero

Whea cropt in a field

We assess the economy-wide impacts of low-carbon transitions, focusing on the short, medium, and long-run impacts. By linking the UCL-ENGAGE model to the TIAM-UCL model, we explore the economic impacts of decarbonisation across the entire economy for specific emission and energy systems pathways. We also assess the avoided climate change damages in terms of reduced crop failures and heat stress under those decarbonisation pathways. We combine the work on this area with our expertise on circular economy to evaluate synergies and trade-offs between climate and circular economy policies in the steel industry.

Financing the low carbon transition

Dam surrounded by hills

We developed a CGE model (InvestCGE) that includes modelling capabilities specific to the implementation of government-backed infrastructure projects. These features are introduced across the construction, financing, and operation phases of the project. This model allows us the assessment of the economic impacts related to the construction and financing of infrastructure projects, widely neglected in this type of assessments. The model has been applied to the construction of the Bui Dam in Ghana.

Improving energy access and resource use in the developing world

Group of pyramids

We developed a framework that combines CGE modelling with artificial intelligence-driven multi-objective, multi-SDG policy search and machine learning to support multi-sector, multi-actor policy deliberation to screen efficient policy portfolios. We demonstrate the utility of the framework for a case study of Egypt by identifying policy portfolios that achieve efficient mixes of poverty and inequality reduction, economic growth, and climate change mitigation.

Sustainable resource-efficient economies and societies

Molten metal

We developed the first global CGE model that represents the circular economy in the steel sector. It models the whole steel supply chain, from iron ore mining to scrap treatment and recycling, distinguishing between primary and secondary steel production technologies. We are currently expanding this work by adding advanced technologies in steel manufacturing. In addition, we are developing a modelling framework to assess circular economy policies in the global aluminium industry, considering the physical and monetary flows of materials. We are expanding our modelling assets to assess at the regional and household level the impacts of circular economy policies in the UK construction sector.

Research stories

Our work quantifies the economic impacts of policy interventions and identifies the distribution of winners and losers. By assessing the economic costs and benefits of alternative policies, stakeholders and policy makers can identify scenarios to be avoided and develop strategies to achieve desired outcomes.

Informing the UK response to climate change
A sign reading "Net Zero 2050"

Informing the UK response to climate change

The macro-economic modelling team is part of the CS-N0W programme that uses cutting-edge scientific knowledge to inform cross-government climate policy, helping policy makers make informed, evidence-based decisions to improve the UK’s resilience to climate change. The macro-economic modelling team is quantifying the economic impact of mitigation, and avoided impacts of climate change on crop production, labour productivity and income distribution. Find out more about CS-N0W on the UK Government website.

Modelling study could help Nile countries manage major new dam
Image of a damn being built

Modelling study could help Nile countries manage major new dam

Countries affected by the River Nile’s Grand Ethiopian Renaissance Dam (GERD) could benefit economically under cooperative adaptive management of the Nile that allows for different climate change scenarios. This research combines climate projections; hydrological, river system and economy-wide simulators; and artificial intelligence multi-objective design and machine learning algorithms.

The scientist tackling global warming through comedy
Photo of Matt Winning

The scientist tackling global warming through comedy

Matthew Winning, Senior Research Fellow at UCL ISR and core member of the macro-economic modelling team, uses comedy to communicate climate change. In his recent book “Hot Mess: What on earth can we do about climate change?, Matthew aims to both lighten the mood and enlighten readers on climate change. Matthew performs live climate change comedy across the UK with several sell-out Edinburgh Fringe shows and has a TEDx talk about the importance of using humour to discuss climate change. He hosted the BBC Radio 4 shows ‘Net Zero: A Very British Problem’ and  ‘Mark Watson and Matt Winning: Seriously, Though, The Planet’.

Increased economic benefits and resilience with collaborative management of the Nile’s Grand Ethiop…
Birds eye view of the river Nile

Increased economic benefits and resilience with collaborative management of the Nile’s Grand Ethiop…

A coordinated filling and operation of the GERD increases the total electricity generation from both the GERD and the Nile system, sustains Sudan’s water consumption, decreases Egypt’s irrigation water deficits, and increases Egypt’s gross domestic product and other macroeconomic indicators compared to an approach that resembles a recently negotiated proposal in Washington D.C.. This research links a water and economic modelling representing two-way hydro-economic feedbacks to capture the dynamic interactions between the Nile’s hydrology and infrastructure and Egypt’s economy.

Recent projects

Our portfolio is spread over several national and international research projects. The UCL Environmental Global Applied General Equilibrium model, developed by the macro-economic modelling team at UCL Institute for Sustainable Resources, is one of the main tools supporting the analysis of climate, environmental, resource, energy and economic policies. While the multi-sector, multi-region nature of the UCL ENGAGE model allows the evaluation of policies across sectors and across regions, ISR’s macro-economic modelling team also uses detailed single-country CGE models to assess the impacts across different socio-economic groups and regions within the country.

Macro-economic modelling in teaching

Economic modelling is an integral part of our Master 'sprogrammes. We cover from simple resource economic models to more sophisticated economy-wide models.

Economics and Policy of Energy and the Environment MSc

In Economics and Policy of Energy and the Environment MSc a comprehensive introduction to economic modelling, methods and applications to the assessment of decarbonisation scenarios are covered in the core module 'Introduction to modelling, methods and scenarios'.

Our researchers also support dissertations for the Master's degree. An example of a dissertation title in this area is “The Economic Impact Analysis of Korea's Net-Zero Scenario - Focusing on Power Sector”.

Sustainable Resources: Economics, Policy and Transitions MSc 

In Sustainable Resources: Economics Policy and Transitions MSc the economic theory behind the supply, use and conservation of key natural resources is taught by using simple economic models in the core module 'Introduction to Resource Economics and Policy'. The construction of a Social Accounting Matrix, main data input for CGE models, and multiplier analysis is taught in the core module 'Tools for Assessing Sustainable Resource Use'.

Our researchers also support dissertations for the Master's degree. An example of a dissertation title in this area is “Missing Forests for the Trees: Analysis and Bio-Economic Model of Illegal Harvest of Dalbergia (Rosewood)”.

Doctoral research (PhD)

Doctoral research relating to macro-economic modelling:

  • Ge Yin - 'Integrated Assessments of the Economic and Environmental Impact of China's Energy Investment on the Countries along the Belt and Road Initiative (BRI).'
  • Diana Ramirez- 'Food security and ecosystem services in Mexico: the risks under climate change.'
  • Zijie Ma - 'Analysing the potential of secondary aluminium in achieving decarbonisation of the global aluminium industry.'
  • Zein Khraizat - 'Managing Water under Uncertainty: Challenges and Perspectives in Water-Scare Countries.'
  • Husain Al Meer

Researchers

Alvaro Calzadilla 
Professor
a.calzadilla@ucl.ac.uk

Matthew Winning 
Senior Research Fellow
m.winning@ucl.ac.uk

Metin Piskin 
Research Fellow
m.piskin@ucl.ac.uk