WITCH (World Induced Technical Change Hybrid model) is one of the main modelling tools developed within FEEM’s Sustainable Development research programme. The model is designed to assist in the study of the socio-economic dimensions of climate change and to help policy makers understand the economic consequences of climate policies.
WITCH is an Integrated Assessment model designed to evaluate the impacts of climate policies on global and regional economic systems and to provide information on the optimal responses of these economies to climate change.
Countries included within the model are grouped into twelve regions which strategically interact using a game theoretic set-up. Note that irrespective of the grouping into twelve regions, regional disaggregation can easily be performed.
The top-down component of WITCH consists of a dynamic economic growth model in which the energy component of the aggregate production function has been expanded to depict the energy sector and to model the carbon mitigation options for the main greenhouse gases.
The model can track all of the actions which impact the level of mitigation—such as R&D expenditures, investment in carbon-free technologies and adaptation, purchases of emission permits, or expenditures for carbon taxes—and thus allows for the evaluation of the equilibrium responses stimulated by different climate policy tools.
A climate module provides information on the effects of a range of GHG emissions. Climate change damage and the level of optimal adaptation response can also be accounted for thanks to an adaptation module.