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The role of innovation and policy design in energy and environment for a sustainable growth in europe ('TCH-GEM-E3')

Project information

Grant agreement ID: ENG2-CT-1999-00002

  • Start date

    1 February 2000

  • End date

    31 January 2002

Funded under:

FP5-EESD

  • Overall budget:

    € 451 233

  • EU contribution

    € 399 753

Coordinated by:

KATHOLIEKE UNIVERSITEIT LEUVEN

Belgium

Objective

Objectives and problems to be solved:
The objective is the development of the GEM-E3 model and the analysis of policy design and of specific policy case studies. The GEM-E3 model is a general equilibrium model for the EU, consisting of 14 inter-linked country-modules. The model development covers two aspects. The first one consists in the improvement of the model realism through an aggregate but engineering-oriented representation of the energy system and through the modelling of imperfect market structures in goods and permits markets, allowing the modelling of strategic behaviour of firms and countries. The second activity aims at the endogenous representation of the dynamics of innovation and technological progress. Regarding policy analysis the focus lies on the study of policy design in the presence of market imperfections and on the role of innovation and R&D policies for a sustainable growth in Europe. Based on the analysis described above, specific case studies addressing energy and environment themes on the EU agenda, will demonstrate how this type of analysis can contribute to the orientation of EU policies in the domains covered.
Description of work:
The project can be separated into different interrelated components, involving modelling research work, analysis of policy design and specification of case studies for energy and environmental policies. The modelling research work mainly consists of two activities, the full implementation of model developments to improve its realism and the development of the endogenous representation of the dynamics of innovation and technological progress. Moreover, the geographic coverage of the model is extended to potential Eastern Europe member states, Switzerland is fully integrated and the database is updated. The model improvements consist in the integration of bottom-up/top-down modelling for the electricity sector, modelling of the supply of energy and modelling of imperfect competition on product, input and tradable permits markets. The second activity develops the representation of endogenous growth and of basic and public research, including the knowledge externalities from this research. The component regarding policy design focuses on the implications for the design of energy/environmental policies of elements such as the market structure and transaction cost and on the role of R&D policies in the development of efficient energy or environmental-friendly technologies. The last component uses the results of the analysis described above for specific case studies on Energy/Environment policies, covering a wide range of topics such as the phasing out of nuclear, Kyoto policies and the impact of the enlargement to Eastern Europe. Expected Results and Exploitation Plans: The GEM-E3 model has been frequently used in the past by the project partners for policy-oriented research activities. The new model developments will widen the scope for interesting issues and therefore the range of potentially interested organisations. The multi-purpose nature of GEM-E3 (national, EU-wide, world wide applications, endogenous innovation, alternative assumptions about expectations of agents, new instruments etc.) makes it an appropriate tool for the evaluation of policies in many domains, also outside energy and environment. The exploitation of the results of this project will go through two channels. The model development and results will be published in academic journals and presented at international and national workshops and conferences. This will lead to a large dissemination of the project results in the academic world. The model will also be presented to organisations/authorities (national and international) which could be interested in results from model simulations for their own decision process.

Coordinator

KATHOLIEKE UNIVERSITEIT LEUVEN

Address

69,Naamsestraat 69
3000 Louvain / Leuven

Belgium

Participants (5)

BUDAPEST UNIVERSITY OF ECONOMIC SCIENCES AND ADMINISTRATION

Hungary

CENTRALE RECHERCHE SA

France

CENTRE FOR EUROPEAN ECONOMIC RESEARCH

Germany

Institute of Communication and Computer Systems

Greece

UNIVERSITY OF MAASTRICHT

Netherlands

Project information

Grant agreement ID: ENG2-CT-1999-00002

  • Start date

    1 February 2000

  • End date

    31 January 2002

Funded under:

FP5-EESD

  • Overall budget:

    € 451 233

  • EU contribution

    € 399 753

Coordinated by:

KATHOLIEKE UNIVERSITEIT LEUVEN

Belgium