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Content archived on 2024-04-19

A general energy-environment-economy model for Europe (E3ME)

Objective

To construct a general sectoral model for Europe, capable of addressing issues that link developments and policies in the fields of energy, the environment and the economy.

The model will treat the Community as a whole (States being treated as regional entities. It will be provided with inputs dealing with energy production and consumption, population and economic activities in one modelling framework. It will have to be able to deal with long term structural changes in energy demand and supply, and will focus on the contribution of R&D and technological innovations and investments to the dynamics of growth and change.

The final E3ME is a detailed model of 31 sectors, including the main energy carriers to model energy-environment-economy interactions, which can be estimated and solved for 14 European regions/countries chosen for the project; this has since been extended to 19 regions to cope with the accession of the new Member States, plus Norway and Switzerland. The model permits a full simulation of the effects on the EU macro-economy of policies and changes in behaviour of sectors and agents, both at the regional and sectoral levels. The model allows in particular for the quantification of the respective economic impact of taxes and tradable emissions permits in terms of reduced CO2 emissions, therefore contributing to an evaluation of policies to reduce anthropogenic emissions of greenhouse gases in Europe by 60% over the next 50 years.
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Conventional econometric models are "neo-keynesian" and do not properly X cope with supply-side phenomena. Applied general Equilibrium models are X therefore often preferred for long term analysis of energy and X environmental issues, as they provide a framework in which supply and X demand are assigned the same importance. X The project will specifically address three problems : X 1 - how best to use neo-keynesian econometric models in a general X equilibrium framework for long term analysis; X 2 - how to make sure that long term convergence properties of X econometric models are characterized by General Equilibrium and X 3 - how should the transition between two long term equilibria be X analyzed. X X
It seems to be necessary to improve the treatment of the response by X representative sectors to new economic conditions imposed by technical X innovations. X X
Progress in the field of time series analysis ought to be integrated with X the development of structural econometric models. The project will adopt X the new econometric approach, beginning with the most sensitive sectors. X X
Research in the field of analysis of the role of environmental X externalities will be analyzed and incorporated in the approach of this X project. Appropriate specification of the model in order to be able to X achieve this will be considered from the beginning of the work. X X
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Fields of science (EuroSciVoc)

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Programme(s)

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Topic(s)

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Call for proposal

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Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

CSC - Cost-sharing contracts

Coordinator

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

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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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Participants (2)

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