Bottom-up energy modeling

Two general approaches have been used for the integrated assessment of energy demand and supply: the so-called bottom-up and top-down approaches. The bottom-up approach focuses on individual technologies for delivering energy services, such as household durable goods and industrial process technologies. For such technologies, the approach attempts to estimate the costs and benefits associated with investments in increased energy efficiency, often in the context of reductions in greenhouse gas (GHG) emission or other environmental impacts. The top-down method assumes a general equilibrium or macroeconomic perspective, wherein costs are defined in terms of losses in economic output, income, or gross domestic product (GDP), typically from the imposition of energy or emission taxes.