Projection of World Socio-economic and Industrial Activities for - PowerPoint PPT Presentation

Projection of World Socio-economic and Industrial Activities for AIM/Enduse[Global] Osamu Akashi (Kyoto University) The 13th AIM International Workshop 16-18, February 2008 @NIES, Tsukuba, Japan

Outline of AIM Enduse[Global] � Expansion of Enduse[Country] to cover world � Target regions: 23 world regions (Japan, China, India, Indonesia, Korea, Thailand, Other South- east Asia, Other South Asia, Middle East, Australia, New Zealand, Canada, USA, EU-15 in Western Europe, EU-10 in Eastern Europe, Russia, Argentine, Brazil, Mexico, Other Latin America, South Africa, Other Africa, Rest of World) � Time horizon: mid-long term ( ～ 2030, ～ 2050) � Bottom-up type model � Simulate GHG emissions under given energy service demand such as production of steel, transport volume, space heating, etc.

International trade model Overall framework World trade balance equation of Enduse[Global] 23 region Production International price Domestic price Export, Import Macro economic Production function indicators Socio-economic Consumption function macro frame model Export and import function Production of tradable Macro Population commodity economic scenario indicators Enduse model Energy Service Residential Sector Transport Sector Industrial Sector Demand Energy service Service Sector demand model ( Transportation, Space heating etc) Technology DB Final Energy Demand ・ Initial cost ・ Energy consumption per operation ・ Transformation Sector Service supply per operation ・ etc GHG emission

Outline of socio-economic macro frame model � Macroeconomic model which estimates macro economic indicators such as GDP, final consumption expenditure, capital formation, value added of 3 sectors � Supply-side model (GDP is estimated from capital stock and labor force) � Input is population � 27 equations for each region � Parameters are estimated by econometric approach (historical data is used to estimate parameters)

Structure of socio-economic macro frame model Population Capital Stock Gross capital (age: 15-64) formation Labor GDP Time trend force Value added of Private final agriculture, industry consumption and service expenditure Endogenous Exogenous variable variable

Model performance test � Dynamic simulation (1960 – 2005) � Comparing simulated value with reported value � Mean Absolute Percentage Error (MAPE*) are used as index Mean Absolute Percentage Error (MAPE) V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e a d d e d o f a d d e d o f G D P a d d e d o f a d d e d o f G D P a d d e d o f a d d e d o f a g r i c u l t u r a g r i c u l t u r i n d u s t r y s e r v i c e i n d u s t r y s e r v i c e e e J a p a n 1 . 2 6 . 9 3 . 6 1 . 9 U S A 1 . 7 6 . 5 2 . 6 1 . 6 C h i n a 3 . 5 6 . 5 7 . 1 8 . 4 E U - 1 5 i n W e s t e r n E u r o p e 1 . 8 3 . 0 2 . 1 1 . 9 I n d i a 4 . 1 6 . 1 6 . 2 6 . 2 E U - 1 0 i n E a s t e r n E u r o p e 3 . 4 7 . 6 4 . 4 4 . 3 I n d o n e s i a 2 . 1 4 . 5 5 . 9 4 . 0 R u s s i a 7 . 7 6 . 3 8 . 2 9 . 6 K o r e a 4 . 3 5 . 8 4 . 6 6 . 9 A r g e n t i n e 3 . 9 1 3 . 4 7 . 1 7 . 8 T h a i l a n d 1 . 9 8 . 8 3 . 0 2 . 4 B r a z i l 2 . 2 1 0 . 2 9 . 5 9 . 5 O t h e r S o u t h - e a s t A s i a 4 . 1 5 . 0 4 . 7 5 . 2 M e x i c o 2 . 4 9 . 2 4 . 3 3 . 0 O t h e r S o u t h A s i a 2 . 1 3 . 1 3 . 1 3 . 0 O t h e r L a t i n A m e r i c a 3 . 0 5 . 9 5 . 0 4 . 2 M i d d l e E a s t 4 . 6 1 4 . 9 9 . 7 8 . 9 S o u t h A f r i c a 3 . 1 7 . 7 3 . 2 4 . 6 A u s t r a l i a 1 . 8 1 7 . 8 5 . 1 3 . 6 O t h e r A f r i c a 5 . 2 9 . 0 7 . 1 5 . 4 N e w Z e a l a n d 1 . 5 1 0 . 2 3 . 9 3 . 0 R e s t o f W o r l d 2 . 6 9 . 8 4 . 6 5 . 3 C a n a d a 3 . 5 6 . 9 6 . 3 2 . 5 ( % ) ∑ − Ye Yr t t MAPE = Ye : estimated value, Yr : reported value t ∑ Yr t t

Simulation result (1) Simulation 2000 - 2050 � Medium population of World population prospects (UN, 2006) are used as � population scenario World GDP 7 6 ) 5 1 r e s u l t = 0 S R E S - A 1 B 0 4 0 2 S R E S - A 2 ( x 3 S R E S - B 1 e d n I S R E S - B 2 2 1 0 2 0 0 0 2 0 1 0 2 0 2 0 2 0 3 0 2 0 4 0 2 0 5 0 Annual GDP growth rate of the world is projected to be 2.8%/year � during 2000 - 2050 It’s very similar to B2 of SRES scenario �

Annual GDP growth rate (2000-2050) of regions % / y e a r 0 1 2 3 4 5 6 7 W o r l d J a p a n Simulation result (2) C h i n a I n d i a I n d o n e s i a K o r e a T h a i l a n d O t h e r A s i a U S A E U - 2 5 R u s s i a B r a z i l O t h e r L a t i n A m e r i c a A f r i c a O t h e r D e v e l o p e d R e g i o n O t h e r D e v e l o p i n g R e g i o n

International trade model [steel] Framework of World trade balance equation Enduse[Global] 23 region Production International price Domestic price Export, Import Macro economic Production function indicators Socio-economic Consumption function macro frame model Export and import function Production of steel Macro Population economic scenario indicators Enduse model Energy Service Residential Sector Transport Sector Industrial Sector Demand Energy service Service Sector demand model ( Transportation, Space heating etc) Technology DB Final Energy Demand ・ Initial cost ・ Energy consumption per operation ・ Transformation Sector Service supply per operation ・ etc GHG emission

Why international trade model [steel] is needed ? � Steel is internationally traded （ Amount of Internationally traded steel is 32 % of world steel production in 2005 ） � Production of steel in each region depends not only consumption but also export and import (Production = Consumption + export - import) � Export and import of steel are needed to be modeled to project future steel production

Outline of international trade model � Partial equilibrium model � Domestic market and international market reach equilibrium with steel price as intervening parameter � Input is value added of industry of 23 regions � Main outputs are production, consumption, export and import of steel for 23 regions � 323 equations � Parameters are estimated by econometric approach (historical data is used to estimate parameters)

Structure of int. trade model Endogenous Exogenous Domestic market equilibrium ： Consumption i = Production i － Export i ＋ Import i ∑ ∑ World market equilibrium ： Export i ＝ i: region Import i i i

Model performance test � Dynamic simulation (1993 – 2005) � Comparing simulated value with reported value � Mean Absolute Percentage Error (MAPE) are used as indicator P r o d u c t i o n P r o d u c t i o n W o r l d 3 . 9 C a n a d a 3 . 2 J a p a n 2 . 7 U S A 4 . 2 C h i n a 1 1 . 4 E U - 1 5 i n W e s t e r n E u r o p e 2 . 3 I n d i a 3 . 2 E U - 1 0 i n E a s t e r n E u r o p e 6 . 5 I n d o n e s i a 2 2 . 8 R u s s i a 3 . 4 K o r e a 2 . 9 A r g e n t i n e 5 . 6 T h a i l a n d 9 . 0 B r a z i l 4 . 9 O t h e r S o u t h - e a s t A s i a 9 . 1 M e x i c o 6 . 9 O t h e r S o u t h A s i a 5 . 9 O t h e r L a t i n A m e r i c a 4 . 3 M i d d l e E a s t 3 . 4 S o u t h A f r i c a 3 . 7 A u s t r a l i a 9 . 9 O t h e r A f r i c a 9 . 2 N e w Z e a l a n d 5 . 7 R e s t o f W o r l d 2 . 5 ( % ) ∑ − Ye Yr t t MAPE = Ye : estimated value , Yr : reported value t ∑ Yr t t

Simulation result Simulation from 2005 to 2050 � Steel production (mil. ton) O t h e r D e v e l o p i n g R e g i o n 2 5 0 0 O t h e r D e v e l o p e d R e g i o n 2 0 0 0 B r a z i l R u s s i a 1 5 0 0 n o t . l E U - 2 5 i m 1 0 0 0 U S A K o r e a 5 0 0 I n d i a 0 C h i n a 5 0 5 0 5 0 5 0 5 0 0 1 1 2 2 3 3 4 4 5 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 J a p a n

Remaining Task � Comparing simulated result of GDP and steel production with other research � Development of other industries model (Cement, Paper and pulp, Petrochemical industry ) � Run Enduse[global] model using those result as input