Progress of AIM/Material
Toshihiko MASUI
16 March, 2002
National Institute for Environmental Studies, Tsukuba, JapanThe 7th AIM International Workshop
1Position of AIM/Material
AIM/Local

AIM/Impact

Developed for linking
CO2, SO2, NO2, SPM
reduction program

Detailed process model
Sunshine
for climate change
impact assessment
Water resource
Land use
focused on surface water
recycling, crop
Socio-economic
Crop Productivity
productivity andindicator
vegetation
Impact on food demand

Temperature
Precipitation

Emission Intensity of SO2 in China

Adaptation strategy

AIM/End-use

AIM/Top-down

Country Based
Technology Model

World Economic
Model

AIM/MaterialEnvironmental
Environburden
mentalBurden Environmental
Industry
Green Purchase
Industry
Consumer
Environment Fund
WastesRecycleOne country CGE modelwith CO2 and materialbalance, interface withenvironmental
technology model

AIM Family

Environmental
BurdenEnvironmental Industry(waste management, recycle)
Technology assessment

Technology needs

Research on new technologies

AIM/Trend

Futureeconomic trend
Futureenvironmental trend

Korea
Developed as a
ChinacommunicationIndia
platform in order
to construct
ThailandJapan
Asia-pacificregional environmental
outlook supported withmulti-regional environment-economic CGE model2Background of AIM/Material Not only CO2 reduction but also solid

wastes & other pollutants should bemanaged simultaneously.
 Not only environmental preservation
but also economic progress should beachieved.
Relationship between environment & economy
is described through environmental
investment and environmental industry.
3

Objects of AIM/Material
 For environmental policies in Japan CO2 reduction strategies
 Solid waste management for recycling society
 Environmental industry & investment andenvironmental constraint

 For environmental policies in Asian region
 Economic growth & material flow change

Domestic flow & International flow
 Role of environmental industry & investment
4Features of AIM/Material
 CGE model with recursive dynamics
 Time period: 1995-2010
 Region: Japan
 Consistent material balance Carbon emissions
 Solid waste generation & treatment

5What’s new in 2001More detailed disaggregation of commodities &activities; (31 x 33)Î(49 x 41)
Esp. detailed fossil fuels

6New economic activities &commodities
AGR Agriculture, forestry andfishery
MIN Mining except fossil fuel
*M_C Coal mining#MCC Coking coal
#MSC Steam coal, lignite andanthracite*M_O Oil mining#MCO Crude oil*M_G Gas mining#MNG LNG, Natural gas
FOD Food and beverages
TEX Textiles
PLP Pulp, paper and wooden
products
CHM Chemicals
PLS Plastic
NMM Non-metallic mineralproducts
STL Steel
NSM Non ferrous metal
FMT Fabricated metal
MCH Machinery* only activity# only commodity

ELM Electrical machinery andequipment
TRE Transport equipment
PRI Precision instrument
OTH Others except plastic
CNS Construction
HET Heat
WTR Water supply
SAL Wholesale and retail trade
FIN Finance and insurance
EST Real estate
TRS Transportation andcommunication
PUB Public service
RNT Renting and leasing
REP Reparing
PRS Other service
GOV Producers of government
services
EMC Environmental capitalproducts
SEW Sewage sector
MWM Manicipal waste
management sector

IWM Industrial waste
management sector*COL Coal production andrefinement#CCK Coke#CCG COG#CBF Other coal products*OIL Oil production andrefinement#OGL Gasoline#OJF Jet fuel oils
#OKR Kerosene#OLO Light oils
#OHO Heavy oil#ONP Naphtha#OLP LPG#OOT Other oil products*GAS Gas production#GTG Town gas#ELE Electricity supply*THE Thermal electricgeneration activity*HYD Hydro power generation*NUC Nuclear power
7

What’s new in 2001
More detailed disaggregation of commodities &activities; (31 x 33)Î(49 x 41)
Esp. detailed fossil fuels Structural change in waste treatment
 Detailed waste flow in Japan Link top-down (AIM/Material) & bottom-up(sludge treatment)Application to India ⇒ Dr. Rana8

Overview of AIM/Material
Government

Pollutant
HouseholdPollutantCommodity

Production
sectorCapitalLabor

EnergyEnvironmental
Industry

Pollutant

OthersEnvironment
support9Tentative simulation results
GDP [mil yen]
Reference case
6.0E+08

Growth rate: 0.8%/year(2000-2010)

5.8E+08
5.6E+08
5.4E+08
5.2E+08
5.0E+08
4.8E+08
1995

1997

1999

2001

2003

2005

2007

2009

10

Tentative simulation results
GDP change [mil. yen]
2.0E+05
0.0E+00-2.0E+05-4.0E+05-6.0E+05

CO2 constraint.

-8.0E+05

waste constraint-1.0E+06

CO2 & waste constraint0.1% of GDP loss

-1.2E+06-1.4E+06

0.2% of GDP loss
0.3% of GDP loss

-1.6E+06-1.8E+06
1995

1997

1999

2001

2003

2005

2007

2009

Necessary for technology model!

ÎSome assumptions such as waste reduction affect the results.
ÎExogenous parameters should have meaning.
11

Necessary for bottom-up model Elasticity of substitution in AIM/Material= 0 or ∞Í to keep material balance
ex. produced pulp and waste pulp Î 0
produced energy and by-product energy Î ∞ÎNeed scenarios on structural changeÎFor support scenarios, bottom-up model torepresent the technology change has beenconstructed.
12Overview of bottom-up model
Simple linear model (Sewage sludge treatment);
Minimizing Total Cost =initial cost + running cost + final disposal costs.t. D≦Σi Xi: service demand of sewage sludge
Xi≦Ai･li: treated sewage sludge
Rj=Xi･rij=rdj: Recycle demand
ΣiDi=Xi･di: final disposal
i: technologies,
X: treated sludge, A: capacity of sludge treatment,
R: recycled products, D: other residuall, r, rd, d: parameters
13How to link 2 models?

Bottom-up
model

AIM/Material

AIM/Material

Bottom-up
model

14

Linkage of 2 models- sewage sludge treatment AIM/Material
In 1995

Sewage sludge generation
Price of final disposal
Recycle material demandBottom-up
ModelIn 1995

Productivity of sewage sludge treatment
Generation of final disposal
AIM/Material
In 1996

Bottom-up
ModelIn 199615

Results of 2 models- Marginal cost of pollutants 40000

C O 2 em issions (yen/tC )30000

finaldisposalof solid w astes(yen/ton)

20000
10000
0
1995

2000

Y ear 2005

2010
16

Results of 2 models- technology change 100%

100%

80%

80%
60%

60%

Introduction of new technologies40%Ô

2 0 0 %0 %40%

1 9 92 50 0 02 0 02 50 1 020%

20%

0%
1995

0%
1995

2000

2005

2010

Year
No constraints casenew othersconv. dryingnew melt furnace
conv. incineration

conv. others
new compost
conv. melt furnace20002005
YearWith constraints case2010

new drying
conv. compost
new incineration
17

Results of 2 models- Economic impact of constraints & technologies In 2010
 Environmental constraints on CO2 emissions

and final disposal of solid waste will bring
1.8 trillion yen of GDP loss.

In case of no constraints, GDP in 2010 will be 638 trillion yen.
 By introducing new technologies (systems) in

sewage sludge management,
10 billion yen of GDP will be recovered.
 Both increase of recycle material demand andintroduction of new technologies will makeGDP loss will be mitigated by 200 billion yen.
18

Tax reform in Japan
 Present tax rates on gasoline & light oil

are tentative for road construction.
ÎChange tax rate on gasoline & light oil;gasoline 53.8yen/l Ö 28.7yen/llight oil 32.1yen/l Ö 15.0yen/lÎOpposite effects to carbon tax!
ÎHow much of CO2 emissions increase?
19

Tax reform
3.8E+08
3.7E+08

9MtC increase!

Ï

3.5E+08
3.4E+08
3.3E+08

Ï Change tax rate

3.2E+08
3.1E+08
3.0E+08

2009

2007

2005

2003

2001

19991997

2.9E+08
1995

ton-Carbon

3.6E+08

Year
Actual values

BaUTax reform20

Future works


Revise for developing countries
 Simplify model structure Impossible to prepare detailed dataset
 Flexible structure for different environmental problems

 Aggregation of economy data (ex. GTAP) & physical data(ex. ITC UNCTAD)

 Fossil fuels, steel, wood, ...

⇒Link CGE model (by Dr. Fujino)Bottom-up model development
 Municipal waste treatment in Japan21