Over the last years, the EU has set a number of policies in place to support energy efficiency and a transition to a low carbon economy. In October 2014, the European Council agreed the EU’s mid-term climate and energy targets under the 2030 Climate and Energy Framework: a 40% domestic reduction in GHG emissions, a minimum of 27% of energy consumed from renewable sources, and a reduction of energy consumption by least 27% by 2030 (compared to 1990) through greater energy efficiency. Additionally, the EU Energy Roadmap models five decarbonisation scenarios based on different technology choices up to 2050 and compares the additional investment needs in each scenario. Further, the EU Energy Union Package, published in February 2015, created a new momentum to bring about the transition to a low-carbon, secure and competitive economy.
This major project for the European Commission (DG Energy), led by Cambridge Econometrics and including E3Modelling and Trinomics as partners, is extending the capability of two global energy-economy-environment models to give a fuller assessment of the impact of policies designed to promote energy efficiency and a transition to a low carbon economy. The improved capability relates to the treatment of (1) policy-induced technological innovation in energy production and use, and (2) the role played by money and finance in the availability of funding for investment. The two models have been chosen to represent two very different traditions in economics, so as to test the extent to which differences in assumptions about behaviour in the economy affect the assessment of the potential impact of policies: post-Keynesian macro-econometric modelling (the E3ME model) and Computable General Equilibrium modelling (GEM-E3). The enhanced models will be applied to assess the impact of potential policies in the energy-environment field and the impact of changes in the global economic and policy environment on economic, energy and environmental emission outcomes in the EU.
If you have any questions or comments, don’t hesitate to contact Jeroen van der Laan.