2021

The purpose of developing the assessment of the scenarios and forecasts of Latvia's macroeconomic development is the assessment of Latvia's strategic policy documents and planned investments, based on the global development trends (changes caused by the Covid-19 pandemic, global technological changes, climate change - the Green Course and progress towards climate neutrality, etc.), and also, by evaluating Latvia's demographic development trends and economic development opportunities, to develop Latvia's macroeconomic assumptions and influencing factors for medium (up to 2030) and long-term (up to 2050) for 3 development scenarios (pessimistic, optimistic and base). The scenarios will be the basis (input conditions) to determine the economic impact of achieving the identified economic and climate goals under various hypotheses using the energy and climate TIMES (Integrated MARKAL-EFOM System) and CGE (Computable General Equilibrium)  models. The research will also include a theoretical review of the factors affecting energy costs, based on the experience of other countries, other models (references) and the analysis of scientific literature on the principles of energy price formation. Hypotheses will be put forward about how energy-related policies, incl. Elements of the European Commission's revised directives on energy efficiency and renewed energy resources may affect the costs of energy users in Latvia. Identified hypotheses will be tested in the modeling process.

The study is available here (in Latvian):

Latvijas makroekonomiskās attīstības scenāriju un prognožu novērtējums, lai izvērtētu Eiropas Komisijas pārskatīto energoefektivitātes un atjaunoto energoresursu direktīvu ietekmi PDF

The purpose of the study is to define the improvement mechanisms of the CGE (Computable General Equilibrium) model in order to provide an internationally competitive general equilibrium model for assessing the impact of climate policy on the national economy and its effective connection with the Institute of Physical Energetics (IPE) TIMES (Integrated MARKAL-EFOM System) model for the case of Latvia. Based on the scientific literature, the advantages and limitations of different types of CGE models (static, dynamic - recursive and fully dynamic) will be explored, as well as the possibilities of applying good practice to the case of Latvia. A concept for the inclusion of greenhouse gas emissions in the CGE model will be developed, as well as an evaluation of the advantages and limitations of the indirect linking of CGE-TIMES models ("soft linking") compared to other linking methods ("hard linking" and "hybrid linking"). After the audit of the existing version of the CGE model, in cooperation with the IPE, an analysis of the availability of the data required for modeling will be carried out, if necessary, proposals for the improvement of statistics will be developed and/or alternative methods of data collection will be offered. Hypotheses will be put forward regarding the optimal type of CGE model for the case of Latvia, as well as the optimal type of connection with the IPE TIMES model.

The study is available here (in Latvian):

Latvijas VLA modeļa pilnveides mehānismi, lai Latvijas gadījumam nodrošinātu starptautiski konkurētspējīgu vispārējā līdzsvara modeli klimata politikas ietekmes uz tautsaimniecību novērtēšanai un tās efektīvu sasaisti ar FEI TIMES modeli PDF