Posts: 2
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Joined: Oct 2012
Hi!
I am wondering a bit about the difference of choosing
an internal or an external region for import of energy commodities, eg oil and
coal. As I see it, there is no modeling/calculation difference between these
two options. The main difference is maybe convenience (you need less definition
of an external region and you can separate regions of analysis from endogenous
inputs)?
/Erik
Posts: 390
Threads: 18
Joined: May 2010
I am not sure I fully
understand your question. Maybe you could provide a more concrete real-world example where
you describe the two alternative modeling options you are considering?
Anyway, using external
region(s) for modeling the imports of energy commodities is usually the most
transparent and recommended way in geographically limited models that do not
cover the whole world markets (supply and demand) of those commodities, because
in that case the supply / demand equilibrium usually cannot be modeled. Of
course, you could also introduce into the model an artificial internal region
(e.g. "Global"), which supplies the commodities to the "real"
model regions via endogenous trade. Such an artificial region might be viewed
as representing the "world market" for the traded commodities. In
this case you could again model the supply of the commodities either using
imports from some external region to the artificial internal region, or by
introducing extraction and refining processes into the artificial region. You might then
even include the demand of the rest of the world using exogenous projections.
I agree with you that subjective convenience plays a major role in choosing between various modeling options...
Posts: 2
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Joined: Oct 2012
Thank you Antti, you have answered the question :-)
/Erik