AN INTRODUCTION TO THE DIFFERENT APPROACHES FOR SOCIO-ECONOMIC EVALUATION OF PAMs 1 « Workshop on methodologies for socio-economic evaluation of climate change policies and measures » 12th of May, Brussels Inès Sneessens and Marco Orsini

2 Policy evaluation To improve and support decision-making To assess the effectiveness in terms of goals achievment No common framework But No guidelines regarding methods and approaches to use We made a review of the main climate policy methods that have been applied Agriculture, Industry, Energy, Waste, Transport

3 STEP 1 : GENERAL METHOD FOR POLICY EVALUATION STEP 2 : SPECIFIC APPROACH FOR IMPACT ASSESSMENT EVALUATION STUDIES APPROACHES MAY BE CHARACTERIZED BY A TWO STEPS FRAMEWORK

4 STEP 1 : GENERAL METHOD FOR POLICY EVALUATION QUANTITATIVEQUALITATIVE MODELLINGDATABASES [EX-ANTE] [EX-POST] [EX-ANTE OR EX-POST] HYBRID METHODS

5 OPTIMIZATION SIMULATION General equilibrium model Other normative model Other descriptive model Participatory model Partial equilibrium model Integrated model Econometric model Hybrid model

6 OPTIMIZATION MODELS Other optimization model Equilibrium model  General equilibrium model  Selection of a best element with regard to some criteria from a set of available alternatives  “How it must be”  Supply and demand model  Partial equilibrium model  Takes into account only a part of the market  Takes into account the entire economy  Makes sense when macroeconomics effects have to be considered

7 SIMULATION MODELS Other simulation models Econometric model  Projections based on retrospective data  “What… if”  Description of a reality taking into account the perception of stakeholders Participatory model  Takes into account non-pecuniary and non- observable costs (but “constant”)

8 OPTIMIZATION/SIMULATION MODELS Integrated model Hybrid model  Coupling an economic model with a biophysical model  Coupling an optimization model with an simulation model

9 CRITERIA FOR MODEL RELEVANCE EVALUATION  Policy scale Local, (L) National (N), Global (G)  Assessment scale Local, (L) National (N), Global (G)  Time-frame of assessment : Short term (ST) and/or long term (LT) Importance of dynamics  Behavioral factors (Yes/No)  Biophysical factors (Yes/No)

10 Relevance regarding Type of model Policy & Assessment scale Biophysical factors (IAM) Behavioral factors Time-frame Partial equilibriumL - N+- ST Global equilibrium N - G-- LT Other Opt modelsL - N+ + LT Other Simul modelsL - N+ ST ParticipatoryL+ ST EconometricsN++ ST Hybrid modelsL - N+ ST - LT [ L : Local, N: National, G: Global, ST: Short term, LT : Long term]

11  Cost analysis : cost effectiveness of measures or costs impacts decomposition  Cost-Benefit analysis : helps predict whether the benefits of a policy outweigh its costs  Co-benefit analysis : additional benefits beyond GHG reductions resulting from climate policies  Multi-criteria analysis : consideration of multiple criteria for policy evaluation THE PREFERRED CHOICE DEPEND ON THE OBJECTIVES OF THE EVALUATION TASK

12 OVERVIEW OF LITERATURE REVIEW RESULTS General method Specific assessment approach 1.Integrated models (25%) 2.General equilibrium models (17%) 3.Partial equilibrium models (17%) 1.Co-benefit analysis (50%) 2.Cost analysis (42%) 3.Multicriteria and Cost-benefit analysis (8%) Agriculture (67%) Energy (67%) Energy (100%) General Method * Specific approach 1.Integrated models * Co-benefit analysis (±25%) 2.General equilibrium* Co-benefit analysis (± 21%) 3.Partial equilibrium * Cost analysis (± 21%) Energy (80%) Agriculture (67%)

13 EXPERIENCES FROM FRANCE, FINLAND, NETHERLANDS AND BELGIUM Next steps Identify tools easily applicable in Member states Identify data availability Identify the most relevant approaches regarding the specific context of each Member states General methods Specific approach