Footnotes
1 AMOS is an acronym for A Model of Scotland, so called because the modelling framework was initially calibrated on Scottish data (see Harrigan et al, 1991).
2 the rebound effect should be calculated as:
where E T is total energy use and a is the share of total energy use affected by the efficiency improvement.
3 This work was carried out with Sam Anson, an Economic Adviser with the Scottish Government, and student on our MSc in Economic Management and Policy, for his dissertation in the summer of 2008. We hope to extend this analysis in a co-authored paper in the near future.
4 The most recent GROS figures for their "Principle" scenario assumed a net migration of 8500 p.a. Details of the differences between the scenarios presented here and the GROS projections can be found in Lisenkova et al. (2008) and Lisenkova et al. (forthcoming).
5 Figures on the generation of electricity from different technologies in Scotland, and the capacity of renewable energy technologies, between 2000 and 2006 are given in Tables A4.1 and A4.2 of Technical Appendix 4.
6 In total, we ran approximately 500 simulations, with different levels of taxes and subsidies such that we held total electrical output approximately constant, and increased the share of electricity from renewable sources.
7 As in the IO analyses in Section 5, we assume that total electricity output remains at its current levels. In the sensitivity analyses reported in Technical Appendix 6 we do allow for total generation to be lower, which would be consistent with projected deadlines in UK demand. It would be possible, of course, to also explore alternative assumptions about future consumption and production, so the present analysis should be regarded as indicative.
8 A SAM is typically built around an input-output ( IO) table that identifies the structure of the economy in terms of flows of goods and services and generation of GDP.
9 The GTAP web-site can be found at http://www.gtap.org.
10 The point is that other countries feel most of the benefits derived from Scotland lowering its domestic emissions of greenhouse gases because climate change affects everyone. However, the benefit to Scotland of being part of a successful global environmental policy might be large.
11 For example, in Wissema and Delink's (2006) Irish model, the production function for the electricity production sector has a distinctive structure.
12 See project information on the ESRC funded project 'An empirical general equilibrium analysis of the factors that govern the extent of energy rebound effects in the UK economy' at http://www.fraser.strath.ac.uk.
13 Hanley et al (2008) and Turner (2008) provide a more formal and detailed introduction to the literature on and basic theory of rebound effects.
14 Note that we focus on modelling improvements in energy efficiency in production activities. Future research under Dr Turner's ESRC First Grant Project (grant reference RES-061-25-0010) will develop the AMOSENVI framework to allow us to model the impacts of efficiency improvements in the household (final consumption) sector.
15 A more general point to note is that any change in efficiency is a supply-side shock that cannot be effectively modelled in an IO framework (given the assumptions of passive supply and universal Leontief - fixed proportions - technology).
16 This work was carried out with Sam Anson, an Economic Adviser with the Scottish Government, and student on our MSc in Economic Management and Policy, for his dissertation in the summer of 2008.
17 The most recent GROS figures for their "Principle" scenario assumed a net migration of 8500 p.a. Details of the differences between the scenarios presented here and the GROS projections can be found in Lisenkova et al. (2008) and Lisenkova et al. (forthcoming).
18 This is one of the objectives of the current First Grant Project on modelling the impacts of improved energy efficiency.
19 In previous work on energy efficiency improvements (Allan et al., 2007) we modelled the impact of recycling increased government revenues back to the economy increasing government expenditure or lowering taxes. In these simulations however, this loop back to the economy is not closed, with increased government revenues retained through increased savings.
20 Income tax is modelled as a percentage share of total wage income and equals 16.1% in the base year data. A 6.3% increase in the rate of income tax increases the rate of total income tax to 17.1% of total wage income.
21 Hunterston B obtained a five-year lifetime extension to allow it to operate up to 2016, while Torness has yet to apply for a lifetime extension, but could extend its lifetime by up to ten years ( i.e. to 2033).
22 Scottish Power announced in 2006 that Longannet (capacity 2304MWe) will be opted-in to the EU's LCPD, but operation at Cockenzie (capacity 1152 MWe) has opted-out of the LCPD and so is allowed to run for 20,000 hours of operation from 2008, or until the end of 2015, whichever comes sooner.
23 The measurement of this target will be total electricity generated from renewable sources divided by the sum of total electricity generated minus electricity exports plus electricity imports, multiplied by 100, or equivalently, total renewables generation as a percentage of generation required to support domestic consumption.
24 Sections A5.2.1, A5.2.2 and A5.2.5 draw liberally from material published in Allan et al (2007a).
25 It would be possible to incorporate the impacts of changes in Y, however this is not carried out in the current analysis.
26 That is, it is not the same IO database as used in the current AMOSENVI framework.
27 In the CGE analyses elsewhere in the report, we relate emissions to input use, rather than output production (see sections 1.2 and A1.4). However, in an IO modelling framework, where there is a fixed proportional relationship between inputs and outputs, it is more common, and makes no numerical difference, to use output-pollution coefficients. However, as explained in Section A1.4, this limits the range of pollution effects modelled.
28 Note, however, that there may be other sectors with greater CO2-output coefficients and multipliers, and such sectors would be revealed by a full industrial analysis of the CO2 intensity of output across all sectors of the Scottish economy.
29 We assume that total electricity output remains at its current levels. It would be possible, of course, to explore alternative assumptions about future consumption and production, so the present analysis should be regarded as indicative.
30 See BERR (2008) for details of the UK Government's support for Carbon Capture and Storage.