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Growth and Development

Research topics

The Macroeconomic Modeling Group of Research Domain III aims at the theoretical foundation, empirical validation and numerical implementation of an economic growth model. This model is part of an Integrated Assessment Model that combines models of the macro economy, the energy system, the climate system and the land use system. The Integrated Assessment Model can be applied to assess climate policies.


Technological change and growth

Technological change is the main driving force of economic growth. Both have a major impact on the costs of mitigating climate change, while simultaneously climate policies induce technological change. Starting from endogenous growth theory, major research activities focus on modeling technological spillovers and investments into R&D.

International Trade

International trade is a major channel of interaction between agents (i.e. world regions) in our model. New concepts of dynamic trade theory have to be taken into account in order to deal with trade as a strategic variable in an intertemporal optimization framework. Moreover, capital trade, foreign investments and energy trade gain importance in the context of international technological spillovers and of the restructuring of the energy systems worldwide. In addition we analyze conceptually the efficiency and equity aspects of the interaction of climate policy and capital mobility.

Computational Economics

Major efforts are made in developing large scale integrated models. Handling complex models like ReMIND-R is a challenging task. Advanced software and hardware tools are used to run ReMIND-R numerically. Additional problems arise when external effects (e.g. spillovers) are modeled. Global optimality can not be guaranteed. In such a framework, a Social Planner optimum differs from a decentralized solution. Non-traditional algorithms have to be developed and used in order to find both types of solution.

Climate Policy Modeling

Major tools and products of the group’s activities are a regionalized version of the ReMIND model family (i.e., ReMIND-G, ReMIND-R, ReMIND-S). We further refine these models and apply them for climate policy analyses. The main focus is on the evaluation of Post-Kyoto climate policy regimes. Furthermore, we explore the inter-generational distribution of the costs and benefits of climate change mitigation policies. To this end, we model mitigation policies in stylized overlapping-generations models.



marian Marian Leimbach
(team leader)
nico Nico Bauer
(2nd team leader)
lavinia Lavinia Baumstark Franziska Piontek
Franziska Piontek


Former team members

  • Niklas Roming
  • Gregor Schwerhoff
  • Anselm Schultes
  • Valeria Jana Schwanitz
  • Michael Hübler
  • Michael Lüken
  • Theresa Lenz




Selected publications


Selected projects

  • CliPoN

Title: Climate Policy and the Growth Pattern of Nations

Duration: September 2011 until August 2014

Budget: 318.799 € funded by BMBF, PT DLR: Okonomie des Klimawandels

Description: Does climate policy hinder economic growth? The literature on climate economics provides indication that climate stabilization goals can be achieved with moderate GDP losses, but this depends on a number of assumptions, e.g. universal climate policy regimes and world-wide availability of low-cost carbon free technologies. Technological progress and technology diffusion play a crucial role. Still it is unclear whether technological progress and climate policy-induced technology diffusion support convergence or divergence of economic growth in different world regions. The first aim of our research project is to contribute to a better qualitative and quantitative understanding of the interconnected mechanisms of climate policy, trade, endogenous international technology diffusion, economic development, cross-country convergence and carbon leakage. The second aim is to examine the economic and environmental effectiveness of climate, trade and technology-related policy instruments in tackling climate change under different growth scenarios, which has been neglected so far in the literature. The project will be coordinated by the Potsdam Institute for Climate Impact Re-search (PIK). PIK will lead the work package on numerical assessments and is respon-sible for creating a project website and organizing the final symposium where the pro-ject results will be presented to the scientific community and to stakeholders.

  • Global-IQ

Title: Impact quantification of global changes

Duration: August 2011 until July 2014

Budget: 397.380 € funded by EU - European Union

Description: Global-IQ is a project with 10 partners from different European countries. It aims to advance the quantification of socio-economic impacts of global changes at global, European and regional scale. This includes but is not limited to climate change. Other global challenges which will be explored include the infrastructure and transportation sector, migration and international trade. Besides impacts also possible adaptation strategies will be studied and the final goal is to evaluate total costs and the optimal mix of adaptation and mitigation against global changes. This will be achieved utilizing a large set of state-of-the-art modeling tools. PIK contributes the ReMIND-R-MAgPIE system to the project. Key sectors of research will be agriculture, forestry, water, energy, EU competitiveness, labor and international trade. Theoretical innovations concerning discounting, risk and ambiguity will also be developed and tested numerically with models.


Title: Enhancing Robustness and Model Integration for The Assessment of Global Environmental Change

Duration: December 2010 until November 2013

Budget: 413.101 € funded by EU - European Union

Description: This international project aims to advance the integration of existing models representing the global economy and climate change mitigation strategies, models representing climate change impacts, and models representing agriculture, hydrology and land use. The resultant integrated modelling systems will be used to produce consistent future world scenarios that respect common sustainability goals.


  • No. 9179 - EntDekEn

Title: Klimaschutz, Entwicklung und Gerechtigkeit: Dekarbonisierung in Entwicklungs- und Schwellenländern

Duration: August 2010 until July 2013

Budget: 500.000 € funded by BMBF

Description: Climate change and the fight against global poverty are two challenges for this century that cannot be seen separately. The challenge is find solutions between promoting economic growth (and thus burdening the climate) on the one hand, and forgoing economic growth (and thus burdening the poor) on the other. To meet this challenge new pathways for low carbon development will be identified.

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