Assessing energy-economy-environment models
Europe has taken the lead globally with respect to adopting policies aimed at protecting the environment. For example, it has set ambitious targets for energy production from renewable sources as well as for reductions in emissions associated with climate change. Environmental policy often has significant economic and social impacts that cannot be overlooked. Sustainability impact assessments (SIAs) can help ensure that a proper balance is struck between competing interests. In the context of the TRANSUST project, the Centre for European Economic Research (ZEW) examined a number of computer models used to perform SIAs. The question ZEW sought to answer was how well do the models account for the economic, environmental and societal aspects. They proceeded by analysing a number of energy-economy-environment (E3) models provided by members of the TRANSUST consortium. What ZEW discovered was that while all relevant economic factors were included, the treatment of environmental and especially societal impacts was less than satisfactory. Environmental indicators were limited to simplistic approaches to carbon emissions and ignored more complicated concepts such as biodiversity. ZEW's recommendations, which have been recorded in a relevant summary paper, include strengthening the environmental and societal components of the E3 models. To do so, the modellers will have to overcome the difficulties associated with assigning value to the often vague societal factors. Finally, ZEW cautioned that E3 model output should not form the basis for policy formulation, which is a complex process involving a variety of stakeholders. The model results can, however, provide useful guidance.
