Walid OUESLATI and Ioannis TIKOUDIS from OECD Environment Directorate
Discussion of the structure and different applications of MOLES: a new urban Computable General Equilibrium (CGE) model with microsimulation elements developed in the Environment Directorate. It has many features of an Agent-Based Model (ABM) but is also embedded in a more traditional framework.
The model is tailored to examine the economic and environmental impact of policies targeting the housing and transportation markets in modern cities. Such policies include constraints in long run housing supply (e.g. building height restrictions, no-development zones), property taxation and interventions in the transport system (e.g. fuel and kilometre taxes, public transport subsidies, incentives for electromobility).
Presentation of the final results from the application of MOLES in a sprawled urban area (Auckland, New Zealand). The study explores three central questions. The first is whether the rate of technological change and cost reductions in the electric vehicle industry will be able to achieve significant reductions in greenhouse gas emissions from urban transport. The second concerns the effectiveness of these policy interventions in achieving emission reduction targets. The third question looks at how transport and land use policies affect living costs and housing affordability in urban areas. The findings indicate that policy inaction can prevent urban transport from reaching carbon neutrality any time soon. Under the reference scenario, in which no substantial policy change occurs, total emissions from road transport will continue increasing, while 60% of the per capita emissions in 2018 will still be produced in 2050. Stringent policies that promote public transport and electric vehicles, as well as interventions that give rise to a more compact urban form may reduce the latter number to 30%. The economic impact of these interventions is shown to be particularly diverse: the various policies may yield very different welfare effects, whose magnitude also depends on the time they are implemented. Therefore, the analysis does not only focus on highlighting the policies that curb greenhouse gas emissions and increase welfare, but also on identifying the order at which these policies should be implemented.