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Completion and extension of E3ME

Objective



Objectives

The project addresses a task in the Workprogramme Non-Nuclear Energy - JOULE-THERMIE (1994-1998), the "completion ... of the E3 models developed within JOULE II". In addition, it is proposed to extend the model to include the new member states of the EU, plus Norway and Switzerland, and to introduce new modelling of the supply side. The purpose of the model is to provide a framework for evaluating different policies, particularly those aimed at achieving sustainable energy use over the long term. A main task of the model is the evaluation of policies reducing anthropogenic emissions of greenhouse gases (GG) in Europe by 10 to 20% over the period until 2020.

The set of measurable objectives from the project will take the form of:
- A revised E3ME Users' Manual with associated documentation - A series of working papers
- An operational model solving annually over the period 1985-2010 with a base case scenario covering the EU15 plus Norway and Switzerland.
Technical Approach

The approach to model development can be described in two phases. Phase 1 concerns the updating of the existing model, i.e. version 1.1. This involves producing a revised model (version 1.2) by updating data in each of the member states covered (EU12 minus Greece), re-estimating some economic relationships, making assumptions for exogenous variables, and finally producing a baseline forecast to 2010.

Phase 2 aims to both widen and deepen the model. Widening will be achieved by incorporating the modelling of east-west Germany, north/south Italy, and Greece, and to extend the model to include the remaining economies of Western Europe, i.e. the new member states Austria, Finland and Sweden, plus Norway and Switzerland. This initially involves a similar set of tasks of data collection, validation, and re-estimation of relationships.
Alongside the completion and widening, extra work is to be done in refining the basic sets of equations, with a more satisfactory coverage of fiscal, monetary and institutional relationships. Development work is also planned for the model's energy-environment linkages (demand, prices and taxes). The project also includes new modelling, particularly on the supply-side, treatment of expectations, and a new econometric methodology known as shrinkage estimation.

Expected Achievements and Exploitation

The two main expected achievements of the project are to have baseline forecasts to 2010 for the updated model by summer 1996, and for the widened and deepened model by summer 1997. Alongside the baseline scenarios, a one-region solution is planned with the French economy being chosen as the example, to save solution time and/or to isolate developments in one region.

Funding Scheme

CSC - Cost-sharing contracts

Coordinator

CAMBRIDGE ECONOMETRICS LTD.
Address
Covent Garden
CB1 2HS Cambridge
United Kingdom

Participants (6)

BUREAU FEDERAL DU PLAN
Belgium
Address
47-49,Avenue Des Arts 47-49
1000 Bruxelles
CHAMBRE DE COMMERCE ET D'INDUSTRIE DE PARIS
France
Address
27,Avenue De Friedland 27
75008 Paris
Central Bureau of Statistics
Norway
Address
6,Kongensgatan
0033 Oslo
European Economic Research and Advisory Consortium - ERECO
Netherlands
Address
11,Kp Van Der Mandelelaan 11
3062 MB Rotterdam
Infras AG
Switzerland
Address
18,Rieterstraße
8002 Zürich
University of Oulu
Finland
Address
Linnanmaa
90571 Oulu