Operational Framework for the Nexus of GDP, Energy, Emission, NDC, and Climate Policy : CO-STIRPAT System Dynamics

This paper presents an operational framework for assessing the trajectories of production, energy, emissions, and capital accumulation to ensure the implementation of Nationally Determined Contributions (NDCs). The framework combines widely used methodologies (STIRPAT, system dynamics, and optimization) to simulate the pathways of variables of interest for a target year. For South Korea's observational data, the predicted baseline pathway under current economic conditions is likely to be higher than the NDC target pathway. The production and emissions trajectories of the scenario with a higher share of clean energy are higher than the scenario with a higher carbon price. In addition, the total revenue per emission of each alternative scenario is higher than the baseline scenario. These results can contribute to designing the optimal policy mix between carbon pricing, energy efficiency improvements, and carbon intensity reduction