Name: Ireland Environment, Energy and Economy (I3E) model
Type: CGE
Institution: Economic and Social Research Institute (ESRI)
Documentation: Technical documentation–report
Geographic coverage: Ireland
Description: The model is an intertemporal CGE model that represents productive sectors, households, and the government, among others, with a horizon to 2050. Producers and consumers maximize profits and utility, respectively. As sectoral interlinkages are modeled explicitly, wider economic impacts of a (policy) shock via different transmission channels can be examined. This is particularly useful for examining policies that are expected to have a substantial indirect effect in addition to their direct effect, as is the case for energy-related policies.
Questions to be answered/variables considered: The model includes energy flows and emissions in addition to monetary flows. The inputs to production are labor, capital, material inputs, and energy inputs. Carbon commodities represented include peat, coal, natural gas, crude oil, fuel oil, LPG, gasoline, diesel, kerosene, and other petroleum products. Commodities are produced as cheaply as possible, conditional on relative prices and substitution possibilities, such that external shocks (e.g., an increase in carbon tax) can result in substitution away from energy inputs or reduced demand for carbon-intensive energy inputs. Economic growth is driven by population growth, investment, and growth in total factor productivity, with population and productivity assumed to grow at a constant rate.
Use: The model was developed to help inform the design of energy policies to ensure a smooth and least-cost transition to a low-carbon economy, by enabling a better understanding of the economic and environmental impacts of policies.