Carbon Budget 5 analysis macroeconomic modelling

Descriptions

DECC is looking for a contractor(s) to conduct modelling using HMRC’s environmental CGE model to help inform the decision making on Carbon Budget 5. The purpose is to estimate the macroeconomic and business competitiveness impacts of setting Carbon Budget 5. In proposing a suitable methodology, the contractor must address the research questions and/or objectives outlined in the attached Invitation to Tender. The work specified here forms part of a wider work programme to assess the appropriate level at which to set Carbon Budget 5. Potential suppliers will be required to have the capacity to work with HMRC’s environmental CGE model within a limited timeframe. The environmental extension of the HMRC CGE model is an important model previously used within government to analyse potential macroeconomic effects of energy and climate change policies. An earlier version of the model was previously used for this purpose for 4th Carbon Budget analysis. While the model is not the only way in which these impacts can be estimated, it is one useful source of evidence. Carbon Budgets place restrictions on the total amount of greenhouse gases the UK can emit over a 5-year period. The government has set the first 4 carbon budgets in law, covering the period from 2008 to 2027. The fifth carbon budget covering 2028 to 2032 is scheduled to be set by June 2016. A peer review of the environmental model, completed in October 2013 (and attached to this ITT), identified some ways in which the model could be improved. It was then updated in November 2014. Interim results w/c 4th January 2016; Final Results, Outline of Draft Final Report and in person presentation of findings draft final report w/c 18th January 2016 and Final Report agreed by 12th February 2016.