Rhodium’s Global Energy Model (RHG-GEM) and Climate Outlook

Rhodium’s Global Energy Model (RHG-GEM) is designed to consider a wide-range of uncertainties underpinning the global energy system, providing a robust and systematic exploration of the main drivers of regional energy demand, technology deployment, and resulting greenhouse gas emissions through the end of the century. RHG-GEM is the basis for the annual Rhodium Climate Outlook, which provides insights into what climate future the world is on track for, by integrating probabilistic energy and GHG emissions outcomes with a climate model to generate probabilistic temperature rise estimates incorporating climate system uncertainty.

Rhodium’s Global Energy Model (RHG-GEM) is an integrated modeling platform that captures uncertainty in the pace of economic and population growth, oil and natural gas prices, clean energy technology costs and policy to provide probabilistic energy, and emissions projections through the end of the century. Global emissions are coupled with a simple climate model to produce internally-consistent probabilistic global average temperature rise projections. RHG-GEM is a technology-rich market equilibrium model that identifies the most efficient and economically viable pathways to meet global and regional energy demands, aligned with policy constraints, firm and consumer behavior, and technology evolution and costs. With the addition of full Monte Carlo capabilities, RHG-GEM can provide probabilistic projections of energy demand, technology deployment, greenhouse gas emissions and temperature rise, taking into account the inherent uncertainty in global and regional developments.

Our team uses RHG-GEM to assess the impact of current and prospective policies, technology investment and innovation on regional and global energy system outcomes, technology deployment and costs, greenhouse gas emissions and the resulting global temperature rise outcomes.

Our approach

The need to understand what kind of climate and energy future the world is on track for has become increasingly important not just for diplomats and policymakers, but to almost every actor of the global economy. In an increasingly complex and uncertain world, all need access to modeling that incorporates uncertainty in factors over which they have no control—variables like policy, fuel prices, and economic growth. Rhodium’s Global Energy Model seeks to address some of the shortcomings of existing modeling with probabilistic energy, emissions, and temperature projections by incorporating the following innovations, which to our knowledge have never been combined in a single modeling platform:

• Probabilistic projections: RHG-GEM is an integrated platform that produces fully probabilistic policy, socioeconomic, energy price, technology cost and behavioral projections of the energy system and emissions. We do so using a Monte Carlo Analysis, which relies on repeated random sampling of uncertain inputs to estimate a probability distribution of outcomes.
• Policy: RHG-GEM includes an econometrically-based policy projection module that uses evidence of the determinants of climate policy around the world over the past two decades to provide probabilistic projections for how policy is likely to evolve going forward.
• Integrated platform: Our energy and emissions model is linked with the FaIR model. This allows for probabilistic temperature projections derived directly from our emissions projections that include climate system uncertainty as well.

Other features of RHG-GEM include:

• Regional: RHG-GEM models 16 world regions that consist of countries and country groupings within the broad divide of the Organization of Economic Cooperation and Development (OECD) and non‐OECD countries.
• Modular: RHG-GEM has a modular structure. The main modules consist of: electricity and heat, oil and gas supply, industry, transport, buildings, and non-energy emissions, along with a climate policy module. This modularity enables us to design the methodology and assumptions most suited to each sector. RHG-GEM is also designed to easily link with other models.
• Model timeframe: Our time horizon extends to 2100, which allows us to provide a methodologically consistent set of global emissions and temperature rise projections. And as 2050 gets closer, looking beyond mid-century provides useful insights into regional energy and sectoral emissions dynamics.
• Integrated supply and demand: Demand is determined endogenously in the model, based on GDP, population, energy prices, and other drivers. Demand and supply solve iteratively in the model, producing a market equilibrium solution on an annual basis.
• Clean technology characterization: RHG-GEM characterizes commercially available clean technologies, including solar, wind, utility-scale battery storage, and electric vehicles. The model integrates up-to-date technology cost and performance data and captures spatial and temporal variability of renewable energy resources. We also characterize novel clean technologies—which we collectively refer to as Emerging Clean Technologies (ECTs)—with a focus on clean hydrogen, sustainable aviation fuels (SAF), carbon capture, and direct air capture (DAC). To appropriately capture the market for clean technologies, we also characterize complementary and competitor technologies and relevant supporting infrastructure.
• Clean technology demand: In the industrial, transport, and building sectors we allow for fuel substitution and clean technology adoption based on relative costs and performance, consumer behavior, and historically-calibrated fuel-switching potential.

The Rhodium Climate Outlook

RHG-GEM is the modeling platform used to produce the Rhodium Climate Outlook each year, which provides probabilistic projections of the likely evolution of greenhouse gas emissions and associated temperature rise through the end of the century, and insights into what will matter most for decarbonization in the coming decades.

Learn more about the Rhodium Climate Outlook

The ClimateDeck—Rhodium’s interactive database and data visualization platform in partnership with Breakthrough Energy—enables users to explore the results of RHG-GEM modeling, including the annually updated Rhodium Climate Outlook with probabilistic energy and emissions projections through 2100. The data is organized by sector, fuel, greenhouse gas, region/country and time period. All data is available for download and use.

Learn more about the ClimateDeck