E3-US: A state-level policy assessment tool
E3-US is an innovative new energy-environment-economy model, owned and operated by Cambridge Econometrics. It allows policy makers to assess the impact of policy at either the state or national level, including spillover impacts across states.
The model follows the approach used in the global E3ME model and brings the same key advantages over many other existing tools:
- a high level of disaggregation of sectors and household groups, with over 70 sectors defined in each state
- an econometric specification that gives the model a strong empirical grounding and allows for both short and long-term assessment
- integrated treatment of the energy system, including a bottom-up representation of the power sector
Key economic and social outputs from the model include GDP, employment and unemployment. The model results also include energy consumption and greenhouse gas emissions.
What types of questions can the model help answer?
E3-US addresses questions relating to:
- fiscal policy and redistribution across states, including carbon taxes and other environmental fiscal reform
- elements of a potential Green New Deal
- the direct and indirect effects of social expenditures and other government programmes
- the impacts of new energy regulation, including efficiency measures feed-in-tariffs and support for new technologies
Using the model to explore carbon tax in the U.S.
The model was first applied to explore the impact of a carbon tax on the U.S. economy – the results showed that such a policy could deliver economic benefits under the right conditions. You can read more about the impact of a carbon tax in the USA here.
For more information about E3-US and its applications, please contact Dan Hodge.