Data & Models

Intertemporal Computable Equilibrium System - ICES

Intertemporal Computable Equilibrium System - ICES
Intertemporal Computable Equilibrium System - ICES
ICES is a recursive dynamic multiregional Computable General Equilibrium (CGE) model developed by the Fondazione Eni Enrico Mattei (FEEM) to produce a picture of the world economy.   ICES is used to assess impacts of climate change on the economic system and to study mitigation and adaptation policies. The model’s general equilibrium structure allows for the analysis of market flows within a single economy. This implies going beyond the “simple” quantification of direct costs, to offer an economic evaluation of second and higher-order effects within specific scenarios either of climate change, climate policies or different trade and public-policy reforms in the vein of conventional CGE theory. Sustainability is also a crucial aspect that envisages the harmonization of different types of policies to pursue sustainable development while also protecting the environment and guaranteeing a responsible use of natural resources. For this purpose, ICES is at the core of the APPS framework, offering a comprehensive assessment of current well-being and future sustainability based upon 28 indicators related to the 17 Sustainable Development Goals (SDGs).   The model is flexible in regional aggregation and time horizon up to 2050. The Figure below summarises the interaction of regions or countries through economic flows within a country as well as with the rest of the world (Row). In each optimization step, the model gives a snapshot of domestic economic flows among actors (firm, private household, government) in each region and international trade with the rest of the world. ICES is a recursive dynamic multiregional Computable General Equilibrium (CGE) model developed by the Fondazione Eni Enrico Mattei (FEEM) to assess impacts of climate change on the economic system and to study mitigation and adaptation policies.   The model’s general equilibrium structure allows for the analysis of market flows within a single economy and international flows with the rest of the world. This implies going beyond the “simple” quantification of direct costs, to offer an economic evaluation of second and higher-order effects within specific scenarios either of climate change, climate policies or different trade and public-policy reforms in the vein of conventional CGE theory.   Sustainability is also a crucial aspect that envisages the harmonization of different types of policies to pursue sustainable development while also protecting the environment and guaranteeing a responsible use of natural resources. For this purpose, ICES is at the core of the APPS framework, offering a comprehensive assessment of current well-being and future sustainability based upon 28 indicators related to the 17 Sustainable Development Goals (SDGs). ICES has been further developed considering two specific features important for policy design and impact analysis. One is the need for results with a sharper focus, since climate change impacts are differentiated geographically. Therefore, ICES has a regionalized version, for the EU Mediterranean area. The other feature regards the role of the public sector and its implications for policy assessments. For this reason, the model has also been extended with a more detailed description of the public sector. The model’s general equilibrium structure allows for the analysis of market flows within a single economy and international flows with the rest of the world. This implies going beyond the “simple” quantification of direct costs, to offer an economic evaluation of second and higher-order effects within specific scenarios either of climate change, climate policies or different trade and public-policy reforms in the vein of conventional CGE theory.   Sustainability is also a crucial aspect that envisages the harmonization of different types of policies to pursue sustainable development while also protecting the environment and guaranteeing a responsible use of natural resources. For this purpose, ICES is at the core of the APPS framework, offering a comprehensive assessment of current well-being and future sustainability based upon 28 indicators related to the 17 Sustainable Development Goals (SDGs). ICES has been further developed considering two specific features important for policy design and impact analysis. One is the need for results with a sharper focus, since climate change impacts are differentiated geographically. Therefore, ICES has a regionalized version, for the EU Mediterranean area. The other feature regards the role of the public sector and its implications for policy assessments. For this reason, the model has also been extended with a more detailed description of the public sector.  

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