New Econometric Model for Environmental Strategies. Implementation for Sustainable Development / Endogenous Technical Change – NEMESIS/ETC
The project intends to assess the socio-economic impacts of technological change in energy systems induced by enhanced research activities and environmental policies. The study is based both on a generic technology assessment approach and global system analysis.
Recent results of theoretical and empirical modelling suggest that recognising the endogenous nature of technological change (ETC) modifies the impact on both environment and economy of environmental policies. With an analysis of ETC a new perspective is given on the potential importance of environmental policy instruments. Models with ETC have only recently emerged as the appropriate way to address sustainability questions; for this reason they require major developments to allow for a proper analysis of environmental policies and technological transitions. In fact, the aim of the NEMESIS-ETC project is to develop new insights for technological change in different families of applied models: econometric, general equilibrium and techno-economic ones.
Started in February 2002, the project will use different approaches in order to develop insights into how to realise technological transformation towards non carbon emitting production and growth: endogenous technical progress in econometric models, in applied general equilibrium ones, and bottom up technological approach. The Centrale Recherche S.A/ Lab ERASME (France) co-ordinates the activity of other seven partners. In particular, FEEM will take active part to three work packages, and will be responsible of the one labelled ‘Policy Instruments’. FEEM will be engaged in the simulations of various policy scenarios (e.g. Business-As-Usual, Kyoto Forever, Bush Forever) in order to provide the European Commission with insights on the relationship between the political environmental constraints and incentives to undertake environmental and non environmental R&D. Moreover, the role of environmental taxes and/or emissions trading will be part of our analysis.