Reference Scenarios

Building future socio-economic-environmental scenarios into a macro-economic framework implies making assumptions on trends of exogenous variables or calibrating endogenous variables. Typically, modellers start with building reference/business-as-usual ‘no policy’ scenarios and then simulate policy experiments in order to achieve policy targets.

The APPS project uses as a reference source for scenarios those developed by the climate change community and known as Shared Socioeconomic Pathways (SSPs). They are connected to different mitigation/adaptation challenges and, more extensively, to sustainable pathways of future economic development.

Scenarios are based upon specific assumptions on both exogenous and endogenous variables at the national/regional level. SSPs provide future patterns for population as well as labour force and cropland area. Other trends for exogenous drivers such as primary factor productivity, sector-specific efficiency, total factor productivity and energy prices are then used in order to calibrate given endogenous variables, namely GDP, energy use, emissions and value added shares.