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SIMAC(Simulation based on Marginal Abatement Costs) is a flexible partial model specifically designed to simulate certain aspects of the EU carbon dioxide emissions trading regime. It works with abatement cost functions for each of the EU 15 countries. Different cost functions are used for two aggregate sectors of the economy (the ones that are covered by the directive and the sectors which are not covered). SIMAC illustrates the impact of allowance allocation on the costs of implementing the EU burden sharing agreement. Simulated policy scenarios range from purely domestic action via hypothetical least cost allocation in the National Allocation Plans to illustrating consequences of the actual National Allocation Plans with or without a connection of the EU Emissions Trading Scheme to the world market (for certified emission reductions from the clean development mechanism).[1]


Typical Model Applications:

  • Simulation of efficiency effects due to different design of national allocation plans.
  • Simulation of resulting emission imports/exports from other EU countries or the world market.
  • Impact of the design of the National Allocation Plan on the resulting necessary abatement effort in the sectors of the economy which are not eligible to emissions trading.


  • 2 aggregated sectors in each country: (i) sectors covered by the directive; (ii) sectors not covered by the directive[1]

Dynamic structure:

  • SIMAC is a static model.

Main Model Results:

SIMAC simulates

  • the resulting permit price (in the emissions trading sectors) or the tax that would be equivalent to the complementary measures in the sectors not eligible to emissions trading.
  • the emissions of the two aggregate sectors in the respective countries and the resulting CO2 permit imports or exports.[1]

Required technical infrastructure:

The model is formulated and solved as mixed complementarity problem (MCP) within the GAMS mathematical modelling language. The complementarity problem is solved in GAMS using PATH as a solver. It runs on a PC. It is also accessible on the web via a simple Internet Browser.

Structure of Input Data:

Exogenous variables and parameters:

SIMAC has to be provided with (marginal) abatement cost functions for the two aggregate sectors (covered and not covered by the directive) for all EU countries. In case a connection to the world market for emission reductions from the clean development mechanism of the Kyoto Protocol should be simulated, a world market price can be provided.[1]

Model Extensions:


Links to other Models, Projects, Networks:


Regional Scope:

EU 15 member states [1]

See also

Böhringer, C., T. Hoffmann and C. M. de Lara Peñate (2005), The efficiency costs of separating carbon markets under the EU emissions trading scheme: A quantitative assessment for Germany, in: Energy Economics 28(2006), pp. 44-61.

Böhringer, C., T. Hoffmann, A. Lange, A. Löschel, and U. Moslener (2005), Assessing Emission Regulation in Europe: An Interactive Simulation Approach, in: The Energy Journal Vol. 26(4).


  1. 1.0 1.1 1.2 1.3 1.4 JRC European Commission, IA Tools, supporting impact assessement in the European Commission [1]