Extending the Cambridge model

As noted above, the model has been extended by the incorporation of an energy sub-model and a set of equations for environmental emissions. The solution for the economic variables yields changes in economic activity and general price levels to the energy sub-model. The sub-model then calculates energy demand by sector and the use of primary fuels in electricity generation. These results can be expressed as changes in the input-output coefficients for the electricity and other industries, thus providing a feedback to the main model. Finally the burning of fuels implies emissions of CO2 and various pollutants such as SO2 and CO into the atmosphere; these add to other emissions, not directly associated with the burning of fossil fuels, which are generated by agriculture, industry and other human activities, and which are calculated from changes in variables in the economic model.

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