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Modelling & training > Our suite of economic models > E3MG: An Energy-Environment-Economy (E3) Model at the Global Level

E3MG: An energy-environment-economy (E3) model at the global level

E3MG is a sectoral econometric model for the world that has been developed with the explicit intention of analysing long-term energy and environment interactions within the global economy and assessing short and long-term impacts of climate change policy. E3MG produces comprehensive annual forecasts to the year 2020, and long-term forecasts to the year 2100 and includes a set of fully endogenous technical progress indicators. The E3MG model provides a single-model framework in which detailed industry analysis is consistent with macro analysis; the key indicators, including world trade and technical progress, are modelled separately for each sector and region, and are aggregated to determine global impacts.

E3MG provides a highly disaggregated breakdown of economic activity (ESA-95 consistent) and energy use, based around the following model classifications:

• 20 World regions, including explicit treatment of the US, Japan, India, China, Mexico, Brazil and the four largest EU economies
• 42 Industrial sectors based on the NACE classification, including 16 service sectors and disaggregation of the energy sectors
• 28 Consumer spending categories
• 12 different fuel types, and 19 separate fuel user groups
• 14 atmospheric emissions

Many of the classifications in E3MG are consistent with those of E3ME and MDM-E3 and the model is solved on the software platform IDIOM.

E3MG has been built by teams at Cambridge Econometrics and the University of Cambridge most recently as a contribution to the work of the UK Tyndall Centre for Climate Change Research. E3MG runs independently, but is also linked into the Tyndall Centre's Community Integrated Assessment System (CIAS), which has modules at an intermediate scale linking climate change and impacts on natural systems. The team in the Cambridge Centre for Climate Change Mitigation Research, Department of Land Economy, University of Cambridge, is funded by the Three Guineas Trust, one of the Sainsbury Family Trusts, to develop the modelling to assess the economics of decarbonising the global economy.

The E3MG model was used to assess the impacts of binding global climate agreements at the Copenhagen United Nations Climate Change Conference in November 2009.


Associated Publications

Barker, T., Dagoumas, A. and Rubin, J. (2009) 'The macroeconomic rebound effect and the world economy', Energy Efficiency, Vol. 2, Number 4, November 2009, Springer.

The Climate Group (2009) ‘Breaking the Climate Deadlock: Cutting the Cost - The Economic Benefits of Collaborative Climate Action’, The Climate Group, The Office of Tony Blair, September 2009. See http://www.theclimategroup.org/_assets/files/Cutting_the_Cost_-_BTCD_Report.pdf

Barker, T. and Scrieciu, S.Ş. (2009) ‘Unilateral climate change mitigation, carbon leakage and competitiveness: an application to the European Union’, Int. J. Global Warming, Vol. 1, No. 4, pp.405–417.

Pollitt, H. and Barker, T. (2009) ‘Modelling the financial crisis with the global E3MG model’, IUP Journal of Applied Economics, Volume-VIII, Issue Nos 5 & 6, Sep-Nov 2009, pp5-31.

Barker, T., Foxon, T. and Scrieciu, Ş.S. (2008), ‘Achieving the G8 50% target: modelling induced and accelerated technological change using the macro-econometric model E3MG’, Climate Policy Special Issue on ‘Modelling long-term scenarios for low-carbon societies’, 8: S30-S45.

Barker, T., Pan, H., Köhler, J., Warren, R. and Winne, S. (2006) 'Decarbonizing the Global Economy with Induced Technological Change: Scenarios to 2100 using E3MG'. In Edenhofer, O., Lessmann, K., Kemfert, K., Grubb, M. and Köhler, J. (eds) Induced Technological Change: Exploring its Implications for the Economics of Atmospheric Stabilization Energy Journal Special Issue on the International Model Comparison Project.

Barker, T., Pan, H., Köhler, J., Warren, R. and Winne, S. (2005) 'Avoiding dangerous climate change by inducing technological progress: scenarios using a large-scale econometric model’, chapter 38 in Schellnhuber, H. J., Cramer, W., Nakicenovic, N., Wigley, T. and Yohe, G. (Eds.) Avoiding Dangerous Climate Change, Cambridge University Press, 2005.