Ausregion is a model of the Australian economy that depicts the eight states and territories as well as sub-state regions. Ausregion is an in house ABARES development with a range of unique innovations and characteristics including detailed representation of agricultural industries utilising ABARES Farm Survey data.
Ausregion brings to ABARES comprehensive capability for quantitative assessments at the national, state and regional level of a broad range of issues.
Full account is taken of the interactions and interdependencies between sectors and elements of the economy enabling Ausregion to take full account of direct and flow-on impacts of the issues being assessed. In depicting issues facing the Australian economy, Ausregion can be used in conjunction with ABARES’ suite of sector specific partial equilibrium models as well as its global model GTEM.
Global trade and environment model (GTEM)
ABARES' dynamic multi region, multi sector, general equilibrium model of the world economy - the global trade and environment model (GTEM) - is the basis for our international policy analysis.
GTEM was developed by ABARES specifically to address policy issues with long term global dimensions. We apply GTEM in examining issues such as the climate change response policies, trade reform under the World Trade Organisation, and trends and issues in international commodity and energy markets.
GTEM captures the impact of policy changes on large numbers of economic variables in all sectors of the economy including gross domestic product, prices, consumption, production, trade, investment, efficiency, competiveness and greenhouse gas emissions. The strength of GTEM lies in its extensive detail: the database represents many regional/national economies and many production sectors across the world economy.
GTEM policy analysis results are reported as deviations from a reference case. The reference case provides a 'business as usual' outlook for the economy in the absence of any major policy changes, which enables us to accurately quantify the impacts of policies on indicators of interest.
Climate change analysis using GTEM can include the modelling of market based policy instruments either in the form of ‘cap and trade’ schemes (such as, the Kyoto Protocol) or carbon taxes. The modelling of a domestic and international emissions trading can feature options for the banking of emissions quota and market power, carbon sinks, or some well known flexible mechanisms (for example, the clean development mechanism in the case of Kyoto Protocol). GTEM can also be used to produce emission projections for various sectors and examine the impacts of climate change regulatory strategies, such as mandatory renewable energy targets.
GTEM analysis is backed up by a comprehensive emissions database. It includes combustion and non combustion carbon dioxide, methane and nitrous oxide emissions, which account for around 98 per cent of global anthropogenic greenhouse gas emissions.
Global energy analysis can also be underpinned by GTEM, enabling us to examine the impacts of policies likely to affect global energy markets, such as energy subsidies and carbon taxes. The GTEM energy database includes the three categories of coal - brown thermal coal, black thermal coal, and coking coal - and competing fossil fuels, as well as electricity and major energy intensive industries that influence energy consumption. It also includes all the major energy producing and trading regions. GTEM-Coal is an extension of the model that enhances our capacity to model international coal markets. It has a more comprehensive treatment of the different types of coal, and includes sophisticated representation of technological change and interfuel substitution in the energy sector. It also captures substitution between technologies in response to changes in their relative costs.
GTEM is an appropriate framework for analysing complex trade policy issues because it takes into account the interactions between different sectors in each economy and between economies through bilateral trade flows in goods and services. Also, GTEM models the interactions among policies, namely domestic support, export subsidies and import tariffs that significantly affect international trade. The model provides estimates of the impacts of policy changes on key economic variables including trade and investment flows, the price of consumer goods and inputs to production, sectoral and regional output and, ultimately, regional income and expenditure. ABARES has used GTEM extensively for analysis of agricultural trade liberalisation issues in the context of the WTO negotiations.