The project delivered a “workhorse” model (GreenREFORM EU), capacity building through workshops and study visits, and national implementation support for beneficiaries (Belgium, Finland, Italy, Austria, Poland), plus a Danish benchmark dataset.
GreenREFORM EU presents a new, policy-ready modelling framework developed under the European Commission’s Technical Support Instrument to assess the macroeconomic and emissions impacts of green policies. The model is a dynamic, small-open-economy CGE model with forward-looking agents, Keynesian short-run dynamics, and a modular architecture that allows users to switch sub-modules on or off. A key innovation is a hard‑linked abatement sub-model that brings bottom‑up technology detail into the CGE framework: instead of coarse “green vs brown” energy nests, firms and households choose among discrete technology options (approximated continuously for solver efficiency), enabling realistic representation of electrification, heat‑pump adoption, CCS, and other sectoral abatement pathways.
The model is designed for practical policy analysis. It operates on detailed input‑output and energy accounts and can be readily calibrated to national datasets; Statistics Denmark supplied a Danish benchmark dataset (57 industries, 25 energy products, five emission types) used here to demonstrate functionality. The modular design supports simultaneous solution of the CGE core and the abatement module, while also permitting standalone runs of sub-models for transparency and testing. The model is extensible to country‑specific regulation and more detailed sectoral sub‑models and is available (GAMS code with Python integration) on request for advanced users seeking to perform tailored green policy assessments.
Two simulation experiments illustrate model behaviour. In a €100/tonne CO₂e tax scenario (phased in to 2030, revenues recycled to households), the CGE core alone predicts roughly a 6% emission reduction driven by structural shifts toward less emission‑intensive, more labour‑intensive production; GDP and household welfare decline as higher prices and lower wages outweigh revenue recycling. When the abatement module is activated, technology adoption—particularly electrification—strengthens emissions reductions, moderates price and wage impacts, and cushions GDP and welfare losses. However, outcomes depend critically on assumed technology costs: inexpensive abatement reduces economic costs and welfare losses, while costly abatement can erode tax revenues and dampen welfare gains.
GreenREFORM EU therefore provides policymakers with a flexible tool to evaluate both economy‑wide and sector‑specific effects of climate policies, offering insights into emission trajectories, fiscal implications, distributional consequences, and investment needs.