How many EU environmental targets?
The combined E3ME-FTT model was used in an assessment of possible environmental targets for the EU in 2030. In contrast to the results that are typically found in modelling approaches in which it is assumed that optimal outcomes are achieved, our modelling showed that there could be economic benefits to having targets for both GHG emission reduction and renewables shares. As explained in the paper, the reason is that Europe’s economy is not starting from an optimal position, either in terms of existing policy or in utilisation of economic resources.
For more information contact Hector Pollitt.
Including Road Transport in the EU Emissions Trading System
Cambridge Econometrics was commissioned by the European Climate Foundation to model the effects of including road transport in the EU Emissions Trading System (ETS). The E3ME model was used to assess (1) the effect on CO2 emissions if road transport was included in the EU ETS under current EU ETS price projections; (2) the carbon price required to achieve the same level of emissions reduction as that which could be achieved by anticipated vehicle efficiency standards (of 60gCO2/km for new passenger cars by 2030). The analysis shows that under current ETS price projections, inclusion of road transport in the EU ETS would reduce emissions in the road transport sector by just 3% by 2030. In order to achieve the same level of emissions abatement in road transport as that which could be achieved by vehicle efficiency standards, a carbon price averaging €217 over the period 2020-2030 would be required. The report is available here.
For more information contact Sophie Billington.
Environmental taxes and human capital
The concept of Environmental Tax Reform has been around for a long time now but economists continue to debate how best to use the potential revenues from environmental taxation. Cambridge Econometrics recently presented modelling results based on a new suggestion, to use the proceeds to invest in human capital. The idea is attractive to policy makers both in developed and developing countries, as it could equip workers to deal with the structural changes required to follow a path of green growth.
Our approach draws on detailed labour market analysis. It is still early-stage research but the initial results are positive, as summarised here. For more information contact Hector Pollitt.
The Economic Impact of Modern Retail on Choice and Innovation in the EU Food Sector
Cambridge Econometrics, in a team led by EY France and also including Arcadia, has completed a major analysis of the impact of modern developments in retailing on the choice and innovation in products offered to EU consumers. Carried out for DG Competition, the project was based on some 11 million records of bar-code data for products grouped into 23 product categories for 343 shops in 9 EU countries over the period 2004-12. A number of metrics were constructed to measure different aspects of the choice made available to consumers and different kinds of innovation in products.
CE's role was to carry out econometric analysis to distinguish the role played by different potential drivers of choice and innovation, including the characteristics of the shops, the extent of competition among retailers both nationally and in the catchment area of each shop, the extent of competition among suppliers nationally in each product category, the importance of private labels in each product category nationally and in the assortment offered by each shop, as well as a range of socio-demographic and economic environment drivers.
The report was launched in Brussels at a conference addressed by the Director-General, Alexander Italianer.
Fuelling Europe's Future
Cambridge Econometrics, in collaboration with Ricardo-AEA, Element Energy and a number of independent experts, has undertaken a research project to assess the economic impact of decarbonising cars and vans. The project was commissioned by the European Climate Foundation and was informed by a core working group of experts in the motor vehicles industry as well as other interested stakeholders. The report "Fuelling Europe's Future" considers the economic impact of a series of forward looking scenarios that encompass alternative visions of Europe's future vehicle fleet.
The report won the prize for ‘Low Carbon Report of the Year’ at the Low CVP award ceremony on 10th September. The judges commented that “Cambridge Econometrics prepared a very thorough, authoritative, high quality report; very good macroeconomic analysis which gave a holistic overview.” More information about Low CVP and the award ceremony is available on their website: www.lowcvp.org.uk
The report is available here