We enhanced the SICE model developed by Hwang and Lee (2024) for an integrated approach to climate and environmental issues. As an application, we introduced key policies from Seoul’s building and transportation sectors as scenarios within the SICE model. The results revealed that current policy measures are not sufficient for managing greenhouse gas (GHG) and air pollutant emissions in these sectors. However, the implementation of sector-specific policies, such as a GHG emissions limit scheme for buildings and urban access regulations based on vehicle emission grades, was shown to significantly support carbon neutrality while drastically reducing air pollutant emissions. Additionally, we confirmed the necessity of achieving carbon neutrality in the national power generation sector. From the perspective of air pollution, the electrification of buildings was found to have the most substantial impact.
We also calculated the sector-specific abatement costs and benefits. These unit values were integrated into the SICE model to estimate the total costs and benefits of GHG and air pollutant reductions in Seoul. A sensitivity analysis indicated that assumptions used in cost-benefit analyses, such as the social cost of carbon and the service life of abatement equipment, can significantly influence the benefit-cost ratio. Based on reasonable assumptions derived from currently available data, the benefit-cost ratio of Seoul's climate and environmental policies is approximately 1.23.
Furthermore, this application demonstrated the utility of the SICE model. By employing a stock-turnover approach, the SICE model can incorporate detailed sectoral data, including the number of vehicles by type, fuel, size, and age, as well as the gross floor area of buildings by type and age. It can systematically analyze how changes in socioeconomic factors influence sector-specific activities and, consequently, emissions. This makes the SICE model highly valuable for policy design and evaluation processes.