Managing Local Energy and Environment Interfaces: AIM-Local Model Applications
AIM/Material Model AIM/Material Model Features, model and necessary data Toshihiko MASUI and Ashish...
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AIM/Material ModelAIM/Material ModelFeatures, model and necessary data
Toshihiko MASUI and Ashish RANAToshihiko MASUI and Ashish RANANational Institute for Environmental StudiesNational Institute for Environmental Studies
Session 4: Asia-Pacific Integrated Model (AIM): Introduction to Component Models (Cont.)
APEIS Capacity Building Workshop onAPEIS Capacity Building Workshop onIntegrated Environment Assessment in the Asia Pacific RegionIntegrated Environment Assessment in the Asia Pacific Region
October 24-26, 2002October 24-26, 2002Hotel Grand Inter-Continental, New Delhi, IndiaHotel Grand Inter-Continental, New Delhi, India
Coverage in this workshopCoverage in this workshop
• Summary (This session)Summary (This session)For understanding AIM/Material modelFor understanding AIM/Material model– What is AIM/Material model?What is AIM/Material model?– Model formulationModel formulation– Necessary data for simulationNecessary data for simulation– Future scenarioFuture scenario
• Training (Session 5)Training (Session 5)– Operation of AIM/Material modelOperation of AIM/Material model
• Application (Session 7)Application (Session 7)– Application of AIM/Material model to India and JapanApplication of AIM/Material model to India and Japan
Features of AIM/Material ModelFeatures of AIM/Material Model• Top-down modelTop-down model• Domestic modelDomestic model• Computable General Equilibrium modelComputable General Equilibrium model• Recursive dynamicsRecursive dynamics• Treatment of pollution generation, Treatment of pollution generation,
management and dischargemanagement and discharge• Activity of environmental industry and Activity of environmental industry and
environmental investmentenvironmental investment• Consistent material balanceConsistent material balance• Link with technology model such as Link with technology model such as
AIM/Emission model for technology progressAIM/Emission model for technology progress
--What is AIM/Material Model?-
We have been developing AIM/Material forWe have been developing AIM/Material forboth CO2 and other environmental problems.both CO2 and other environmental problems.
Structure of AIM/Material ModelStructure of AIM/Material Model
• Production sectorProduction sector– Input: capital, labor, energy, other intermediate Input: capital, labor, energy, other intermediate
input, pollution (inputs for pollution management)input, pollution (inputs for pollution management)– Output: commodityOutput: commodity
• HouseholdHousehold– Endowment: capital, laborEndowment: capital, labor– Demand: household final consumption, Demand: household final consumption,
investmentinvestment
• GovernmentGovernment– Revenue: tax including environmental taxRevenue: tax including environmental tax– Demand: government final consumption, Demand: government final consumption,
government investmentgovernment investment
--What is AIM/Material Model?-
Structure of AIM/Material ModelStructure of AIM/Material Model
productionsector
household
capitallabor
government
abroad
market
importexport
produced commodity
energyintermediate
CO2
energyfinal demand
CO2
pollutionpollution
management
energyintermediate
CO2
env. capitallabor
environmentalIndustry/investment
recycle
--What is AIM/Material Model?-
Procedure of model analysisProcedure of model analysis
1. Formulation of model
2. Preparation of dataset in initial year, and calibration
3. Preparation of future scenarios
4. Simulationi. Reference case
ii. Policy case
--What is AIM/Material Model?-
Social account matrixSocial account matrixfor AIM/Materialfor AIM/Material
--Model formulation-
Production sector Investment
Se
ctor
1
Sect
or 2
Sect
or 3
Fina
l C
onsu
mpt
ion
Sect
or 1
Sect
or 2
Sect
or 3
Supply
Pric
e
End
owm
ent
Commodity 1 X11 X12 X13 C1 I11 I12 I13 Y11+Y21+Y31 P1
Commodity 2 X21 X22 X23 C2 I21 I22 I23 Y12+Y22+Y32 P2
Inte
rmed
iate
in
puts
Commodity 3 X31 X32 X33 C3 Y33 P3
Capital K1 K2 K3 PK K*
Labor L1 L2 L3 PL L*
Inpu
t
Final disposal W3 PW W*
Commodity 1 Y11 Y21 Y31 P1 Commodity 2 Y12 Y22 Y32 P2
Out
put
Commodity 3 Y33 P3
Formulation of AIM/MaterialFormulation of AIM/Material
• Market equilibriumMarket equilibrium– Produced commodity
– production factor (capital, labor, ...)
3 3 3
1 1 1( ) 0i ji ij i ijj j j
P Y X C I
0iP
3 3 3
1 1 1( ) 0ji ij i ijj j j
Y X C I
3 3* *
1 10, 0, and 0K j K jj j
P K K P K K
3 3* *
1 10, 0, and 0L j L jj j
P L L P L L
3 3* *
1 10, 0, and 0W j W jj j
P W W P W W
--Model formulation-
Production sector Investment
Sect
or 1
Sect
or 2
Sect
or 3
Fina
l C
onsu
mpt
ion
Sect
or 1
Sect
or 2
Sect
or 3
Supply
Pric
e
End
owm
ent
Commodity 1 X11 X12 X13 C1 I11 I12 I13 Y11+Y21+Y31 P1
Commodity 2 X21 X22 X23 C2 I21 I22 I23 Y12+Y22+Y32 P2
Inte
rmed
iate
in
puts
Commodity 3 X31 X32 X33 C3 Y33 P3
Capital K1 K2 K3 PK K*
Labor L1 L2 L3 PL L*
Inpu
t
Final disposal W3 PW W*
Commodity 1 Y11 Y21 Y31 P1 Commodity 2 Y12 Y22 Y32 P2
Out
put
Commodity 3 Y33 P3
Production sector Investment
Sect
or 1
Sect
or 2
Sect
or 3
Fina
l C
onsu
mpt
ion
Sect
or 1
Sect
or 2
Sect
or 3
Supply
Pric
e
End
owm
ent
Commodity 1 X11 X12 X13 C1 I11 I12 I13 Y11+Y21+Y31 P1
Commodity 2 X21 X22 X23 C2 I21 I22 I23 Y12+Y22+Y32 P2
Inte
rmed
iate
in
puts
Commodity 3 X31 X32 X33 C3 Y33 P3
Capital K1 K2 K3 PK K*
Labor L1 L2 L3 PL L*
Inpu
t
Final disposal W3 PW W*
Commodity 1 Y11 Y21 Y31 P1 Commodity 2 Y12 Y22 Y32 P2
Out
put
Commodity 3 Y33 P3
Formulation of AIM/MaterialFormulation of AIM/Material
• Balance of production sectorBalance of production sector
• Balance of final demand sectorBalance of final demand sector
• Capital stock and investmentCapital stock and investment– for dynamics
3 3 3
1 1 1K j L j W jj j jH P K P L P W
3 3
1 1( )i i iji j
H P C I
3
, 1 , 1(1 )j t j j t iji
K K I
3 3
1 1i ij K j L j W j i iji iPX P K P L P W PY
--Model formulation-
Production sector Investment
Sect
or 1
Sect
or 2
Sect
or 3
Fina
l C
onsu
mpt
ion
Sect
or 1
Sect
or 2
Sect
or 3
Supply
Pric
e
End
owm
ent
Commodity 1 X11 X12 X13 C1 I11 I12 I13 Y11+Y21+Y31 P1
Commodity 2 X21 X22 X23 C2 I21 I22 I23 Y12+Y22+Y32 P2
Inte
rmed
iate
in
puts
Commodity 3 X31 X32 X33 C3 Y33 P3
Capital K1 K2 K3 PK K*
Labor L1 L2 L3 PL L*
Inpu
t
Final disposal W3 PW W*
Commodity 1 Y11 Y21 Y31 P1 Commodity 2 Y12 Y22 Y32 P2
Out
put
Commodity 3 Y33 P3
Production sector Investment
Sect
or 1
Sect
or 2
Sect
or 3
Fina
l C
onsu
mpt
ion
Sect
or 1
Sect
or 2
Sect
or 3
Supply
Pric
e
End
owm
ent
Commodity 1 X11 X12 X13 C1 I11 I12 I13 Y11+Y21+Y31 P1
Commodity 2 X21 X22 X23 C2 I21 I22 I23 Y12+Y22+Y32 P2
Inte
rmed
iate
in
puts
Commodity 3 X31 X32 X33 C3 Y33 P3
Capital K1 K2 K3 PK K*
Labor L1 L2 L3 PL L*
Inpu
t
Final disposal W3 PW W*
Commodity 1 Y11 Y21 Y31 P1 Commodity 2 Y12 Y22 Y32 P2
Out
put
Commodity 3 Y33 P3
Formulation of AIM/MaterialFormulation of AIM/Material
• Relationship between input and output– Production function– Demand function
CES, Leontief, Cobb-Douglas, Linear, ...
• Household: Maximize utility
• Production sector: Maximize profit
Find equilibrium solution
--Model formulation-
Dataset for AIM/Material ModelDataset for AIM/Material Model
• IO table (commodity x commodity)IO table (commodity x commodity)• U matrix (commodity x sector)U matrix (commodity x sector)
– Disaggregate pollution managementDisaggregate pollution management
• V matrix (sector x commodity)V matrix (sector x commodity)• Investment by sectorInvestment by sector
– Disaggregate pollution managementDisaggregate pollution management
• Pollution flow by sectorPollution flow by sector– Generation, treatment, discharge, Generation, treatment, discharge,
recycle, ...recycle, ...
• Supply and demand of reused material Supply and demand of reused material
- - Necessary data for simulation-
Input-Output tableInput-Output table
commodity 1 ... commodity i final demand total output
commodity 1
:
commodity i
value added
total output In order to produce commodity, what kind of inputs andhow much of them are necessary.
Distribution of produced commodityto production of commodity andfinal demand is presented.
household consumption,government consumption,investment, export
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
U matrix (Use matrix)U matrix (Use matrix)
sector 1 ... sector j final demand total output
commodity 1
:
commodity i
value added
total output What kind and how muchof input for production activityare necessary in sector.
Distribution of produced commodityto sectors and final demandis presented.
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
originalU matrix
sector j
production
management
of pollution a
... managementof pollution p
total
commodity 1
:
commodity i
value added
total output
Revised U matrixRevised U matrix(disaggregate production and pollution management)(disaggregate production and pollution management)
Data of original U matrix are disaggregateinto production and pollution management.
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
commodity 1 ... commodity i total output
sector 1
:
sector j
total output How much of commodity iproduced by sector j is represented.
V matrix (Make matrix)V matrix (Make matrix)IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
commodity 1 ... commodity itotal
investment
sector 1
:
sector j
total output
Investment by sectorInvestment by sector
How much of commodityinvested to sector j is represented.
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
Pollution flow by sectorPollution flow by sector
Pollution typePollution type
• Air pollution: SOx, NOx, CO2, ...Air pollution: SOx, NOx, CO2, ...
• Water pollution: BOD load, COD load, ...Water pollution: BOD load, COD load, ...
• Solid waste: sludge, scrap metal, slag, ...Solid waste: sludge, scrap metal, slag, ...– In the case of Japan, the number of the most In the case of Japan, the number of the most
detailed classification is almost 70. detailed classification is almost 70.
• Other: Other: – Toxic waste: Pb, dioxin, ...Toxic waste: Pb, dioxin, ...
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
Pollution flow by sectorPollution flow by sector
sector j
pollutiongeneration
dischargeinto env.
selftreatment
othertreatment
reduction
recycle
dischargeinto env.
IO/U/V/investment/pollution/reuse
sector j
pollution a ... pollution p
generation discharge into environment
without treatment
self treatment
discharge intoenvironment
after treatment
reduction recycle
other treatment
direct other treatment
- - Necessary data for simulation-
SupplySupply and demand and demandof reused material of reused material
commodity 1 ... commodity itotal generation of
reused pollution
pollution a
:
pollution p
total supply of
reused commodityHow much of pollution pcan be supplied as commodity i.
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
Supply and Supply and demanddemandof reused material of reused material
sector 1 ... sector jtotal supply of
reused pollution
commodity 1
:
commodity i
total demand of
reused commodityHow much of recycled commodity ican be demanded in sector j.
IO/U/V/investment/pollution/reuse
- - Necessary data for simulation-
Optional DataOptional Datafor AIM/Material Modelfor AIM/Material Model
• Energy balance tableEnergy balance table– Link physical data from energy balance Link physical data from energy balance
table and monetary data from U matrixtable and monetary data from U matrix
• Other physical material dataOther physical material data– Raw materials such as wood, paper, Raw materials such as wood, paper,
steel, ...steel, ...– Link these physical data and monetary Link these physical data and monetary
datadata
Not yet completedNot yet completed
- - Necessary data for simulation-
Scenarios for AIM/Material ModelScenarios for AIM/Material Model
• Technology changeTechnology change– Energy efficiency, pollution generation, pollution Energy efficiency, pollution generation, pollution
management, recycled material input, and so on management, recycled material input, and so on for new equipment (investment)for new equipment (investment)
• Labor forceLabor force
• Export and importExport and import
• Preference changePreference change– Final consumption, investment, ...Final consumption, investment, ...
- - Future scenario -
Application of AIM/Material ModelApplication of AIM/Material Model
• Economic impacts due to environmental Economic impacts due to environmental preservationpreservation– CO2 reduction (Kyoto target), waste reduction, waste CO2 reduction (Kyoto target), waste reduction, waste
water treatment, ...water treatment, ...
• Mitigation by countermeasuresMitigation by countermeasures– Environmental investment, preference change, new Environmental investment, preference change, new
technology, tax reform, CDM, ...technology, tax reform, CDM, ...
• Link with bottom up model such as Link with bottom up model such as AIM/EmissionAIM/Emission
Detailed results will be represented in session 7.Detailed results will be represented in session 7.