Work package 10 – Policy Assessment with macro models

By ,

Participants: Seureco, ICCS, FPB

The objectives of this work package will be (1) to develop reference scenarios for NEMESIS and GEM-E3 models, in order to reveal the main challenges that will face the European countries over the next 20 years and (2) to achieve different policy assessments with the two models, in the areas of technological and social innovations.

(1) The starting point of any analysis using quantitative detailed applied models such as NEMESIS and GEM-E3 are specific simulations that describe particular paths of the European economy over the next decades. These simulations are what we call reference scenarios that are not intended as actual predictions, but rather as instruments to highlight salient aspects of potential future developments. References scenarios are based on the notion of potential growth that is conditioned on assumptions on population and labour productivity growth, and by all particular processes that may influence the evolution of socio-economic indicators: development of word trade, oil and raw material prices, exchange rates…, and all the policies already adopted in the EU countries.

(2) Once reference scenarios are available, different policy assessment will be realized with the models, in close relation with the results from the other work packages, and in interaction with the European Commission: it is aimed at assessing the impact of specific policy measures, as they emerge from the analysis in the other parts of SIMPATIC, or as they are formulated by actual policymakers. These policy assessments will be implemented by comparing results of the reference scenarios with specific simulations for particular policy options for technological and social innovation, including the “grand challenges” for Europe (competitiveness, growth, employment, energy, GHG emissions…). The main bulk of the work will be achieved using the NEMESIS model, while the GEM E3 model will focus more specifically on policies related to low-carbon technologies and environmental regulation, with their impact on welfare, energy consumption, pollutant and GHG emissions. But the state of the art of modelling is already advanced enough to pursue the assessment for policies that was already undertaken with the DEMETER project that ends up in December 2011 (Cf. Fougeyrollas et al. 2010, Zagamé 2010). For this reason, the state of the art of modelling will be used to make assessments for policies, from the very start of the project at month 1.