An Environmental Medium Term Economic Model - EMEC

This paper describes the structure of a new CGE model of the Swedish Economy called EMEC. The model can be used for analysing economic implications on a disaggregated level of changes in variables that are exogenous to the economy. It incorporates the interaction between the economy and the environment and can thus be used for analysing enonomic implications of various environmental restrictions such as the Kyoto agreement on CO2 reductions. The model distinguishes 17 industries, 20 composite commodities, 19 groups of consumer goods, three kinds of labour and 15 pollutants. Apart from the level of disaggregation, the strength of the model is that it produces results, which can be interpreted fully in terms of the model`s theory, data and the assumptions underlying the exogenous input.