Applied Dynamic Analysis of the Global Economy (ADAGE) Model

ADAGE is a dynamic computable general equilibrium (CGE) model capable of examining many types of economic, energy, environmental, climate change mitigation, and trade policies at the international, national, U.S. regional, and U.S. state levels.

This tool is included in the Development Impacts Assessment (DIA) Toolkit from the LEDS Global Partnership.

Approach

The model uses the same theoretical structure to examine policy effects in each of its three modules: International, US Regional, and Single Country. The model’s integrated framework allows its components to use relevant policy findings from other modules with broader geographic coverage, thus obtaining detailed regional and state-level results that incorporate international impacts of policies.

When to Use This Tool

This tool is most useful for development impacts assessments focused on:

Social

Economic

Environmental

Learn more about the topics for assessing the impacts of low-emission development strategies (LEDS).

Key Outputs

Quantitative estimates include:

• Gross domestic product, consumption, industry output, and changes in prices;
• Employment impacts and changes in wage rates;
• Capital earnings and real interest rates;
• Investment decisions;
• Input purchases and changes in production technologies of firms;
• Flows of traded goods among regions;
• Energy production and consumption by businesses and households; and
• Fuel and greenhouse gas permit prices.

How to Use This Tool

Training Available
ADAGE documentation and introduction included. (Free)

Level of Expertise
Advanced

Key Inputs

Economic data from Global Trade Analysis Project (GTAP) and IMpact analysis for PLANning (IMPLAN); Energy data and various growth forecasts come from the International Energy Agency and Energy Information Administration of the U.S. Department of Energy

Case Studies

Examples of how Applied Dynamic Analysis of the Global Economy (ADAGE) Model has helped people assessing the impacts of low-emission development strategies in countries and regions:

This paper used the ADAGE model to assess the "health implications of biodiversity conservation in Brazil" http://www.aere.org/old/meetings/climatechange_workshop_2007.pdf

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"ADAGE is a dynamic computable general equilibrium (CGE) model capable of investigating economic policies at the international, national, U.S. regional, and U.S. state levels. CGE models such as ADAGE combine economic theory and empirical data to estimate policy effects, while accounting for all interactions among businesses and consumers.

ADAGE typically solves in 5-year time intervals from 2005 to around 2050 and can be used to explore dynamic effects of many types of energy, environmental, and trade policies. Of particular note is its ability to investigate climate change mitigation policies at a range of geographic scales.

ADAGE is designed with an integrated, modular structure (see figure). Each module relies on different data sources and has different geographic scopes, but all have the same overarching theoretical structure. The internally consistent, integrated framework connecting ADAGE’s modules allows its components to use relevant policy findings from other modules with broader geographic coverage, while avoiding computational issues that preclude solving for all U.S. states and world nations simultaneously."