REMIND (Regional Model of Investments and Development) (Marian Leimbach 2010; Luderer et al. 2012; Bauer et al. 2012a; Bauer et al. 2012b; Luderer et al. 2013) is a global multi-regional model incorporating the economy, the climate system, and a detailed representation of the energy sector. It solves for an inter-temporal Pareto optimum in economic and energy investments in each model region, fully accounting for inter-regional trade in goods, energy carriers and emissions allowances. REMIND allows for the analysis of technology options and policy proposals for climate change mitigation.
The macro-economic core of REMIND in each region is a Ramsey-type optimal growth model, where the inter-temporal welfare of each region is maximized. It is possible to compute the co-operative Pareto-optimal global equilibrium including inter-regional trade as the global social optimum using the Negishi method, or the non-cooperative market solution among regions using the Nash concept. In the absence of non-internalized externalities between regions, these two solutions coincide. The inclusion of inter-regional externalities (in particular technology spillovers ) causes a difference of the market solution and socially optimal solution. Macro-economic production factors are capital, labor, and final energy. Economic output is used for investments in the macro-economic capital stock as well as consumption, trade, and energy system expenditures.
The macro-economic core and the energy system module are hard-linked via the final energy demand and costs incurred by the energy system (see Bauer et al. (2008) for further details). Economic activity results in demand for final energy such as transport energy, electricity, and non-electric energy for stationary end uses. A production function with constant elasticity of substitution (nested CES production function) determines final energy demand. The energy system module accounts for regional endowments of exhaustible primary energy resources as well as renewable energy potentials. More than 50 technologies are available for the conversion of primary energy into secondary energy carriers as well as for the distribution of secondary energy carriers into final energy.
The model accounts for CO2 emissions from fossil fuel combustion and land use as well as emissions from other greenhouse gases (GHGs). REMIND determines non-CO2 GHG emissions The latter are by applying marginal abatement costs curves to emission baselines that depend on activity variables or by assuming exogenous scenarios. For numerical reasons, we use a reduced-form climate module, which is calibrated to the MAGICC-6 model (Meinshausen et al. 2011a), to translate emissions into changes in atmospheric GHG concentrations, radiative forcing, and global mean temperature. For a more detailed evaluation, the model can be linked to the full MAGICC-6 climate model in an ex-post mode.