The MIT EPPA6 Model: Economic Growth, Energy Use, and Food Consumption

Abstract

The MIT Economic Projection and Policy Analysis (EPPA) model has been broadly applied on energy and climate policy analyses. In this paper, we provide an updated version of the model based on the most recent global economic database with the base year data of 2007. Also new in this version of the model are non-homothetic preferences, a revised capital vintaging structure, separate accounting of residences, and an improved model structure that smooths its functioning and makes future extensions easier. We compare reference (“business-as-usual”) and policy results for the latest model to the previous version. We also present how projections for the final consumption of food and agricultural products are improved with non-homothetic preferences, and how various assumptions for reference GDP growth, elasticity of substitution between energy and non-energy input, and autonomous energy efficiency improvement may change CO2 emissions and prices.