AMES: A model for energy, economic and environmental assessment

The paper presents AMES, an open-source, multi-sector macroeconomic model developed by the Stockholm Environment Institute. AMES is designed to integrate with the Low Emissions Analysis Platform (LEAP) to create a hybrid energy-economy model. Unlike neoclassical models, AMES is based on structuralist theory, allowing it to simulate structural change and hysteresis, where energy investments can lead to persistent positive impacts on GDP and employment. It is specifically tailored for the economic conditions of low- and middle-income countries, focusing on demand-led growth and capacity utilization rather than assuming full employment and competitive market equilibrium.

• AMES is a structuralist, demand-led model that allows the economy to operate at less than full capacity, enabling it to simulate hysteresis where energy investment can have persistent positive effects on GDP and employment.
• The model is designed as a hybrid system when combined with LEAP and NEMO, merging top-down macroeconometric assessments with bottom-up energy-systems analysis.
• AMES differs from neoclassical models like TIMES-MACRO by using a multi-sector approach where production is based on capacity utilization and potential output, and prices are set as a markup on costs.
• The model incorporates the Kaldor-Verdoorn law, which posits that labour productivity growth is an increasing function of the investment rate, allowing for the simulation of endogenous structural change.
• To simplify the link between energy and non-energy sectors, AMES approximates that the energy sector's demand for non-energy goods is negligible, a valid assumption in most countries because energy value added is typically small.
• The model uses a linear goal programme (LGP) to ensure supply-demand equilibrium each year, prioritizing capacity utilization, domestic coverage of final demand, and export targets.
• In the sample 'Freedonia' model, the metric R was calculated at 2.52%, supporting the validity of neglecting non-energy demand from the energy sector.
• AMES provides flexibility for specific national needs, such as allowing potential output to be specified exogenously for sectors with high backward linkages, such as oil production.

APA

Kemp-Benedict, E. (2023). AMES: A model for energy, economic and environmental assessment. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2023/09/ames-energy-economic-and-environmental-assessment-model.pdf

Chicago

Kemp-Benedict, Eric. AMES: A model for energy, economic and environmental assessment. Stockholm Environment Institute, 2023. https://www.sei.org/wp-content/uploads/2023/09/ames-energy-economic-and-environmental-assessment-model.pdf.

Wikipedia

{{cite report |last1=Kemp-Benedict |first1=Eric |title=AMES: A model for energy, economic and environmental assessment |publisher=Stockholm Environment Institute |date=September 2023 |url=https://www.sei.org/wp-content/uploads/2023/09/ames-energy-economic-and-environmental-assessment-model.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kempbenedict2023ames, author = {Kemp-Benedict, Eric}, title = {{AMES: A model for energy, economic and environmental assessment}}, institution = {Stockholm Environment Institute}, year = {2023}, month = sep, url = {https://www.sei.org/wp-content/uploads/2023/09/ames-energy-economic-and-environmental-assessment-model.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }