Energy-economy linking in MARKAL-MACRO: interplay of nuclear, conservationand CO2 policies in Sweden

The interface between the energy system and the macroeconomy and the use of linked energy-economy models are studied. Linked systems-engineering and m acroeconomic models (such as MARKAL-MACRO) are found to fill an important n iche for national and regional energy systems analyses. The Reference Energ y System is used to distinguish new analytical abilities with this type of energy-economy model. The properties of three descriptors used to model the interface are examined. The model is applied to three important policy iss ues in the Swedish energy system: restrictions of CO2 emissions, phasing ou t of nuclear power, and the availability of energy conservation. The main f indings are: (i) simultaneously restricting CO2 emissions and phasing out n uclear power is very costly, (ii) the major part of the CO2 reduction is ac complished by technological changes within the energy system, and (iii) the rebound effect of energy efficiency measures is larger with CO2 restrictio ns than without.