The basis of the Environmental Costing Model (MilieuKostModel or MKM) is a Markal/TIMES model including most sectors (households, service sector, industry, agriculture energy use). The model uses an extensive database of energy related emission sources and abatement measures, with their associated emission reduction potential and annual costs. Techno-economic information on the entire energy system, such as investment costs and efficiency of conversion, is gathered in an economically consistent way.
The MKM for the Flemish Government is a project initiated and coordinated by the environmental economics team of Flanders' Department of Environment, Nature and Energy and has its foundations in the Flanders Environmental Plan 1997-2001 and the Flanders Environmental Plan 2003–2007 . These plans stressed the need and the usefulness of a cost-effective environmental policy. The Flemish government had the ambition to develop an instrument providing more insights in the costs of environmental policy and contributing to a more cost-effective environmental policy by estimating how environmental targets could be achieved at the lowest possible cost.
The MKM model has been applied in numerous studies: revision of the National Emission Ceilings Directive (LNE), Post-2012 European Climate Policy (LNE), Energy and climate scenarios for the Energy Production and Industry (VMM MIRA), eEnvironmental damage costs associated with current and future electricity production (VMM, MIRA), Scenarios for renewable energy and combined heat and power (VEA), ...
EnergyVille is project coordinator of the reference task ‘Environmental Costing Model’ for LNE.