Therefore, capital and labour market segmentation is introduced by specifying a CET structure (Keeney and Hertel, 2005). The elasticities of transformation have been calibrated to fit estimates of the elasticity of labour supply from PEM (OECD, 2003). At this moment most sectors have the possibility to substitute between different production factors and between capital and energy. The petroleum sector has the possibility to substitute between ethanol, biodiesel and fossil fuels.