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Industrial benefits and costs of greenhouse gase abatement strategies - applications

Objectif



Conformity with Joule III Objectives
Task 1.3. in the Joule Workprogramme Non-Nuclear Energy 1994-1998 is the Utilisation of the E3 models developed within JOULE II...The proposal is to carry out this task for the E3ME (Energy-Environment-Economy Model for Europe) model which is currently bieng developed under a JOULE III project extending the model to cover the new member states. The model has been designed to link developments qnd policies in the areqs of energy, the environment and the economy at an industrial and regional level, particularly those aiming towards sustainable ernergy use in Europe.
Proposed Research Tasks
The project proposes to address several issues associated with the achievement of substantial reductions in greenhouse gas emissions, with the following detailed objectives:
- preparation of a suitable baseline scenario to 2010
- improvement in the forecasting and simulation properties of large industrial models
- improved assessment of teh robustness and range of the projections - assessment of incentives for energy efficiency via patents and RTD - measurement of the effects of energy policies via changes to best available technology
- analysis of sustainable household consumption and its implications for industry
- consideration of the effects of shifting the tax burden from employment to CO2 emissions via increases in excise duties
- analysis of the potential costs and gains form coordinated EU strategies on GHG abatement

Strengths of the Modelling Approach
The value of E3ME in comparison to other modelling tools for E3 application derives from its industrial disaggregaton and its dynamic properties. E3ME treats 15 EU regions and 30 industries in each region as distinct economic entities interacting with one another; but at the same time it is one model giving the benefits of common classifications, definitions and methodology, with equation estimates and results capable of European-level aggregation. The main energy industries are includes, but there is also q detailed, 17 user, 11-energy-carrier treatment of energy demand with associated atmospheric pollutants. As a detailed econometric industry E3 model for Europe capable of addressing both cyclical and long-term problems, E3ME is a complement to the general equilibrium GEM-E3 model also developed in the Joule III programme. Applications of E3Me, compared to those of GEM models, will
- be based on estimated parameters form more formal methods and more data
- treat the dynamic adjustment to long-run development
- derive policy implications more by analysis of the data and less by assumption.

The Partnership
The partnership repersents a balance between public and private organisations, commercial and non-profit making interest, large and small companies, which has worked successfully together in the past. There is representation from central (UK, Germany, France, Austria) Scandinavian (Norway, Denmark, Sweden) and southern (Spain) member states. The majority of the tasks are joint activities among several partners, and reflect expressed research/application interest.

Benefits and Impacts
The wide range of appkication will inform business and policy makers at all levels of government in Europe. The industrial and member-state result for E3 policie will allow for the better application and evaluation of policie designed to reduce GHG emissions in the EU over the next decade. European Dimension
The project is seen as best supported as an Eu coodinated action, rather than relying on independent action from partners. Indeed, without support from the European Commission, the individual institutes would be unable to justify the budget and cross-collaboration needed to successfully apply a pan-European model like E3ME.
European Dimension

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CAMBRIDGE ECONOMETRICS LTD.
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