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Energy economy modelling

Cambridge Econometrics Lead



The main aim of this WP is to understand better the economic opportunities from fostering low-carbon development in Latin American in terms of economic indicators such as energy security, trade, investment, poverty eradication, trade within Latin America, and between Latin America and the rest of the world.


This analysis will be largely based on the E3MG hybrid model, which does not have the same detail of energy technology as LEAP or TIAM, but which links together the economy with energy demand and CO2 emissions. This allows the model to provide projections of energy demand for a given economic forecast, and to assess the economic costs of introducing new energy or climate policy. Outputs from the model include GDP and its components, sectoral output, competitiveness and trade, employment and unemployment; as well as energy demand and CO2 emissions. Where the data allow, this can easily be extended to give distributional impacts, which is important in the Latin American countries with high inequality.

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