Challenges in top-down and bottom-up soft-linking: Lessons from linking a Swedish energy system model with a CGE model

This paper proposes and discusses a soft-linking procedure between a Computable General Equilibrium (CGE) model and an energy system model with the aim to improve national energy policy decision-making. Significant positive and negative experiences are communicated. Specifically, the process of soft-linking the EMEC and TIMES-Sweden models is presented, and unlike previous work we rely on the use of multiple direction-specific connection points. Moreover, the proposed soft-linking methodology is applied in the context of a climate policy scenario for Sweden. The results display a partly new description of the Swedish economy, which when soft-linking, generates lower CO2-emissions in the reference scenario due to a decline in industrial energy demand. These findings point at the importance of linking bottom-up and top-down models when assessing national energy and climate policies.