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Climate change is a major global challenge today. To assess how policies maylead to mitigation, economists have developed Integrated Assessment Models,however, most of the equilibrium based models have faced heavy critiques.Agent-based models have recently come to the fore as an alternativemacroeconomic modeling framework. In this paper, four Agent-based IntegratedAssessment Models linking environment, energy and economy are reviewed. Thesemodels have several advantages over existing models in terms of theirheterogeneous agents, the allocation of damages amongst the individual agents,representation of the financial system, and policy mixes. While Agent-basedIntegrated Assessment Models have made strong advances, there are severalavenues into which research should be continued, including incorporation ofnatural resources and spatial dynamics, closer analysis of distributionaleffects and feedbacks, and multi-sectoral firm network structures.

Agent-based Integrated Assessment Models: Alternative Foundations to the Environment-Energy-Economics Nexus