Response measures models - MDM-E3


Name and contact of the organization

Cambridge Econometrics

Covent Garden, Cambridge, CB1 2HS, UK

Tel: ++44 (0)1223 460760

Tel: ++44 (0)1223 460760

Description of model

MDM-E3 is the UK's most detailed econometric energy-environment-economy (E3) model, designed to analyse and forecast changes in economic structure, energy demand and resulting environmental emissions. It is very similar to E3ME in structure, and its close links between energy demand and economic indicators make it well-suited to assessing the economic impacts of response measures.  In particular, additional taxes or the removal of subsidies can be assessed with the model in the UK.  MDM-E3 can also be used to examine the impacts of efficiency measures, including rebound effects.

Particular relevance

MDM-E3 is relevant in assessing the socio-economic impacts of the climate change mitigation policies  in the UK. MDM-E3 can be particularly useful in analysing changes to policies regarding taxation, subsidies and efficiency improvements of  activities relating to fossil fuels


United Kingdom

Model applications

Projecting Scottish CO2 emissions to 2030 - This study constructed CO2 projections for the non EU ETS traded sector for Scotland to 2030 using MDM-E3, using a given economic forecast.

Evaluating the impact of the economic recession on UK carbon budgets - MDM-E3 was used to model the impact of the global recession, assessing the trade-off between falls in economic activity (which typically reduce greenhouse gas emissions), falls in energy prices (which often lead to increased emissions) and the fall in investment which can lead to both an increase or a reduction in carbon emissions depending on the investing sector and the type of investment.  The outcome was an integrated set of environmental and economic indicators.

Organization's main area of research

Independent economic analysis and forecasting services.

Other projects / reseach

Other MDM-E3 projects (