E3ME’s origins lie in post-Keynesian economic theory. This is a defining characteristic of the model and contributes to several of the tool’s unique advantages over other macroeconomic tools.
E3ME has been designed to address some of the key challenges facing society in the 21st century. The E3ME model embodies three core strengths:
- Integrated treatment of the world’s economies, energy systems, emissions and material demands, enabling the model to capture two-way linkages and feedbacks between these components. Key environmental factors, such as greenhouse gas emissions and resource use are represented explicitly in the model using physical units where appropriate.
- A high level of disaggregation, enabling detailed analysis of sectoral and country-level effects from a wide range of scenarios. Social impacts (including unemployment levels and distributional effects) are important model outcomes.
- E3ME’s specification enables the model to fully assess both short and long-term impacts. It is not limited by many of the restrictive assumptions common to Computable General Equilibrium (CGE) models.