A Model of the International Steam Coal Market (COALMOD-World)

Abstract

Coal is at the core of the debate about climate change mitigation policies, yet the internationalmarket for it is not well represented in most energy models. This paper presents the COALMODframework which is a model of the international steam coal market that can be readily used toexplore implications of climate policies, but also to analyze market structure or to investigate issue ofsupply security. It features a detailed representation of both domestic and international steam coalsupply, based on endogenously calculated Cost, Insurance, Fright (CIF) costs, and prices that take intoaccount additional rents. It features endogenous investment into production, land transport, andexport capacity, as well as an endogenous mechanism assessing production cost increase due toresource depletion. We provide a detailed model and data description and illustrate the features ofthe model by analyzing to scenarios derived from the IEA World Energy Outlook (New Policies and450ppm scenario), highlighting the functionalities of the model.