Four main strands of socio-economic modeling: Agent-based, system dynamic models (ECF, MADIAMS)

1. CLIMARES – possible contributions from ECF and other partners to socio-economic modeling of the Arctic regions Klaus Hasselmann, Max Planck Insitute of Meteorology and ECF, (with NIERSC, St. Petersburg, FEEM, and others) • Four main strands of socio-economic modeling: • Agent-based, system dynamic models (ECF, MADIAMS) • Participatory agent-based models (FEEM, Carlo Giupponi) • General equilibrium models, including induced technological change (FEEM ) • Regional, sector-based models focusing on Arctic (Russian, Norwegian and other partners)

2. CLIMARES – possible contributions from ECF and other partners to socio-economic modeling of the Arctic regions Klaus Hasselmann, Max Planck Insitute of Meteorology and ECF, (with NIERSC, St. Petersburg, FEEM, and others) • Four main strands of socio-economic modeling: • Agent-based, system dynamic models (ECF, MADIAMS) New modeling trend, but exists so far only in global version • Participatory agent-based models (FEEM, Carlo Giupponi) • Experience in regional applications (river basin areas), but not yet in larger areas such as Arctic • 3. General equilibrium models, including induced technological change (FEEM) • Reduced credibility through global financial crisis and recession, but important as reference to main stream • 4. Regional, sector-based models focusing on Arctic (Russian, Norwegian and other partners) • Essential for bringing all strands together

3. CLIMARES – possible contributions from ECF and other partners to socio-economic modeling of the Arctic regions • Four main strands of socio-economic modeling: • Agent-based, system dynamic models (ECF, MADIAMS) New modeling trend, but exists so far only in global version • Participatory agent-based models (FEEM, Carlo Giupponi) • Experience in regional applications (river basin areas), but not yet in larger areas such as Arctic • 3. General equilibrium models, including induced technological change (FEEM ?) • Reduced credibility through global financial crisis and recession, but important as reference to main stream • 4. Regional, sector-based models focusing on Arctic (Russian, Norwegian and other partners) • Essential for bringing all strands together

4. MADIAM (Multi-Actor Dynamic Integrated Assessment Model) climate policy regulatory instruments Actors: governments, public, media, consumers, firms, workers, … scenario predictions ghg emissions climate system economic system impacts on production,welfare,… Dynamic evolution, governed by agent strategies

5. The “real economy”: Production output in physical units (Vensim diagram)

6. The “real economy”: Production output in physical units (Vensim diagram) y: total production , invested in: k: physical capital h: human capital g: consumer goods and services

7. The “virtual economy” (financial system): money circulation between firms, banks and households

8. And: apply Occam’s razor: use the simplest model that explains the phenomenon!

9. The challenge: To combine the four strands in an integrated coupled climate socio-economic modeling system