AIM/Material Model
1. Modified Structure
2. India Application
Ashish Rana
(NIES, Japan)
The 8th AIM International Workshop
13-15 March 2003, Tsukuba
Part 1: Modified Structure
• Need for application to countries with
limitations of dataset
• APEIS training workshop in Delhi
Coverage in this workshop
AIM/Material Model
• Summary
(This
session)
Features,
model
and
necessary data
For understanding AIM/Material model
– What is AIM/Material model?
– Model formulation
Toshihiko
MASUI
and Ashish RANA
– Necessary
data for
simulation
National Institute for Environmental Studies
– Future scenario
Session 4: Asia Pacific Integrated Model (AIM):
Component Models (Cont.)
• TrainingIntroduction
(Sessionto5)
APEIS
Capacity Building
Workshop on
– Operation
of AIM/Material
model
Integrated Environment Assessment in the Asia Pacific Region
• Application (Session
7)
October 2424-26, 2002
– Application
of AIM/Material
model
to India
Hotel Grand
InterNew
Delhi, and
IndiaJapan
Inter-Continental,
-What is AIM/Material Model?-
Structure of AIM/Material Model
produced commodity
pollution
waste
pollution
management
CO2
energy
intermediate
production
sector
CO2
energy
intermediate
pollution
capital
waste
labor
household
abroad
recycle
import
export
market
env. capital
labor
environmental
Industry/investment
CO2
energy
final demand
government
Modifications
• Waste management sector is unified
• Import matrix not used
• Possible to include natural resources
sectors
– Presentation of Dr. Masui in next session
-Model formulation-
Formulation of AIM/Material
Final
Consumption
Sector 1
Sector 2
Sector 3
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
Commodity 3
X31
X32
X33
C3
Y33
P3
K1
L1
K2
L2
Y11
Y12
Y21
Y22
K3
L3
W3
Y31
Y32
Y33
Capital
Labor
Final disposal
Commodity 1
Commodity 2
Commodity 3
PK
PL
PW
P1
P2
P3
Endowment
Sector 3
Supply
Price
Sector 2
Investment
Sector 1
Output
Input
Intermediate
inputs
Production sector
K*
L*
W*
-Model formulation-
Formulation of AIM/Material
• Market equilibrium
– Produced commodity
Pi


 j 1Yji  ( j 1 X ij  Ci   j 1 Iij )  0
3
3
3
Pi  0
 j 1Yji  ( j 1 X ij  Ci   j 1 Iij )  0
3
3
3
– production factor (capital, labor, ...)


P L   L   0, P  0, and L   L  0
P W   W   0, P  0, and W   W  0
PK K *   j 1 K j  0, PK  0, and K *   j 1 K j  0
3
3
*
*
3
*
j 1
L
W
3
j
j 1
L
3
j 1
*
j
W
j
3
j 1
j
-Model formulation-
Formulation of AIM/Material
• Balance of production sector
i1 Pi X ij  PK K j  PL L j  PWWj  i1 PYi ij
3
3
• Balance of final demand sector
H  PK  j 1 K j  PL  j 1 L j  PW  j 1W j
3
3
3
H   i 1 Pi (Ci   j 1 I ij )
3
3
• Capital stock and investment
– for dynamics
K j ,t 1  (1   j ) K j ,t  i 1 Iij
3
-Model formulation-
Formulation 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
- Necessary data for simulation-
Dataset for AIM/Material Model
• IO table (commodity x commodity)
• U matrix (commodity x sector)
– Disaggregate pollution management
• V matrix (sector x commodity)
• Investment by sector
– Disaggregate pollution management
• Pollution flow by sector
– Generation, treatment, discharge, recycle, ...
• Supply and demand of reused material
IO/U/V/investment/
pollution/reuse
- Necessary data for simulation-
household consumption,
government consumption,
Input-Output table
investment, export
total
commodity 1 ... commodity i final demand
output
commodity 1
:
commodity i
Distribution of produced commodity
to production of commodity and
final demand is presented.
value added
total output
In order to produce commodity,
what kind of inputs and
how much of them are necessary.
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
U matrix (Use matrix)
sector 1
...
sector j
final demand total output
commodity 1
:
commodity i
Distribution of produced commodity
to sectors and final demand
is presented.
value added
total output
What kind and how much
of input for production activity
are necessary in sector.
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
Revised U matrix
(disaggregate production and pollution management)
sector j
production
management ... management
of pollution a
of pollution p
total
commodity 1
:
Data of original U matrix are disaggregate
into iproduction and pollution management.
commodity
value added
total output
original
U matrix
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
V matrix (Make matrix)
commodity 1
...
commodity i
total output
sector 1
:
sector j
total output
How much of commodity i
produced by sector j
is represented.
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
Investment by sector
commodity 1
...
commodity i
sector 1
:
sector j
total output
How much of commodity
invested to sector j.
total
investment
IO/U/V/investment/
pollution/reuse
- Necessary data for simulation-
Pollution flow by sector
Pollution type
• Air pollution: SOx, NOx, CO2, ...
• Water pollution: BOD load, COD
load, ...
• Solid waste: sludge, scrap metal,
slag, ...
• Other:
– Toxic waste: Pb, dioxin, ...
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
Pollution flow by sector
sector j
recycle
pollution a ... pollution p
generation
discharge into
environment
without treatment
self treatment
discharge into
environment
after treatment
reduction
reduction
discharge
into env.
self
treatment
discharge
into env.
recycle
other treatment
direct other
treatment
other
treatment
pollution
generation
sector j
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
Supply and demand
of reused material
commodity 1
commodity i
total generation of
reused pollution
pollution a
pollution p
total supply of
reused commodity
How much of pollution/waste
can be supplied as commodity i.
- Necessary data for simulation-
IO/U/V/investment/
pollution/reuse
Supply and demand
of reused material
sector 1
sector j
total supply of
reused pollution
commodity 1
commodity i
total demand of
reused commodity
How much of recycled commodity i
can be demanded in sector j.
- Necessary data for simulation-
Optional Data
for AIM/Material Model
• Energy balance table
– Link physical data from energy
balance table and monetary data from
U matrix
• Other physical material data
– Raw materials such as wood, paper,
steel, ...
– Link these physical data and
monetary data
Not yet completed
- Future scenario -
Scenarios for AIM/Material Model
• Technology change
– Energy efficiency, pollution generation,
pollution management, recycled material
input, and so on for new equipment
(investment)
• Labor force
• Export and export
• Preference change
– Final consumption, investment, ...
Application of AIM/Material Model
• Economic impacts due to environmental
preservation
– CO2 reduction (Kyoto target), waste reduction,
waste water treatment, ...
• Mitigation by countermeasures
– Environmental investment, preference change,
new technology, tax reform, CDM, ...
• Link with bottom up model such as
AIM/Emission
Part 2: Application to India
• Sectors
– From 26 commodities, 24 sectors
– To 40 commodities, 33 sectors
• Electricity sector
– Disaggregated
• Pollutants
–
–
–
–
Wastewater
Sox
CO2
Solid waste
• Time period – till 2030
Baseline trends
1800
Billion Rs (Constant 2000)
1600
1400
1200
1000
800
600
400
200
0
2000
2005
2010
2015
2020
2025
2030
Baseline
trends
3
2.5
2
CO2
Wastewater
1.5
Solid waste
SOX
1
0.5
2030
2025
2020
2015
2010
2005
2000
0
Scenarios
0
-2000
-4000
-6000
-8000
-10000
-12000
-14000
-16000
-18000
s_w constraint
environment innovation
2030
2025
2020
2015
2010
2005
Million Rupees (Constant 2000)
GDP Change over baseline
Future works of AIM/Material
• Part 1: Modification
– Application to other countries
• Part 2: Application to India
– New scenarios of environmental innovation
– CDM scenarios
– Link to bottom-up model