AIM/Material Japan
Activities in 2002
Toshihiko Masui
Maho Miyashita (Tokyo Institute of Technology)
The 8th AIM International Workshop
14th March, 2003
National Institute for Environmental Studies

Progresses of AIM/Material in FY2002
 Structure (AIM/Material Japan)

Waste from stock and reuse : with Ms. Miyashita (TIT)
Reproduction of detailed waste flow
 Simulation (AIM/Material Japan)

Reform of taxation in Japan
Simulation of environmental policies
 Others: with Dr. Rana & Dr. Yang
Simple AIM/Material (for India Workshop)
Comparison analysis (India & China, not yet
completed)
Introduction of natural assets: with Ms. Suwa (TIT)AIM, NIES

AIM/Material Japan

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Background of AIM/MaterialVarious environmental problems should be solved
simultaneously.
CO2 reduction, solid waste management, air pollution, watermanagement, ...
These problems ... trade-off/independent/concurrent



Various environmental protection activities can beprojected.
Which is the most effective?
How much are direct/indirect impacts to economy and otherenvironment?

➜ Quantification of benefits from environmental policies

including environmental industry/investment by using
environment-economy (AIM/Material) model
CO2 reduction and solid waste reduction
AIM, NIESAIM/Material Japan

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Overview of AIM/Material Japan
Computable general equilibrium modelJapan
1995 to 2010, year by year (recursive dynamic)
41 sectors and 49 commodities
18 waste types of industrial waste and 8 types ofmunicipal waste
Environmental industry and environmental investment
Keep economic balance and material balance
Environmental constraints
 CO2 emissions reduction based on Kyoto Protocol
 Reduction in quantity of final disposal of solid waste
to half 2010/1997 proposed by government

AIM, NIES

AIM/Material Japan4

Basic structure of AIM/Material
produced commodity
pollution
waste

pollution
managementCO2
energyintermediate

production
sectorCO2

energyintermediate
pollution
capitalwaste
laborhouseholdAIM, NIES

abroadrecycleimportexportmarketenv. capitallaborenvironmental
Industry/investment
CO2energyfinal demand

AIM/Material Japan

government5

Progress in structure: (1) Waste from stock and reuse

Purpose

Direct reuse of waste is effective environmental
policy or not?
It seems to be effective to solve waste issues.
But, it seems to delay energy efficiency improvement.

In order to answer this question, following module isdeveloped and integrated with AIM/Material
production/consumption (AIM/Material)Î stock (durable goods)
Î waste (Weibull distribution)
Î reuse / treatment

AIM, NIES

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Progress in structure: (1) Waste from stock and reuse

Model

Low energy efficiency

RepairProduction

Reuse

Stock in t-1

Reuse

Waste (stock)
Durable goods
Household

Stock in t

Othertreatment

Municipal waste (flow)
Stock in t+1
Waste management service
RecycleFinal disposal
AIM/Material

AIM, NIES

Waste generation model
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Progress in structure: (1) Waste from stock and reuse
rate:
Waste generation model Total disposal  t α F (t ) = 1 − −     β  
total disposal rate: Weibull distribution

total disposal rate: Weibull distribution
total disposal rate: Weibull distribution
100%
total disposal rate: Weibull distribution
100%
100%
100%
50%
50%
50%
50%
0%
0%
t t+1 t+2 .... t+x-1 t+x
0%t+1 t+2 t+3 .... t+x t+x+1
equipment i consumed in t=t x=durable years
0% t t+1 t+2 .... t+x-1 t+x
equipment i consumed in t=t+1 x=durable years
t+1 t+2 t+3 .... t+x t+x+1
equipment j consumed in t=t
x=durable years
equipment j consumed in t=t+1 x=durable years
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Progress in structure: (1) Waste from stock and reuse

Scenarios Reference case
 Reuse promotion scenarios

promotion of reuse in household
small scale expansion of reuse
expansion of reuse in government
large scale expansion of reuse
expansion of rental service
reduction of repair costAIM, NIES

AIM/Material Japan9

Progress in structure: (1) Waste from stock and reuse

Simulation results: GDP change
20

bil yenat 1995 price

15
105
small
largerental
repair

0-5-10-15-20
1995

AIM, NIES

1998

2001

2004

AIM/Material Japan

2007

10

Progress in structure: (1) Waste from stock and reuse

Simulation results:
Municipal waste disposal change
20000

ton-2000
-4000

small
large
rentalrepair-6000-8000-10000-12000
1995

AIM, NIES

1998

2001

2004

AIM/Material Japan

2007

11

Progress in structure: (1) Waste from stock and reuse

MtC

Simulation results:
CO2 emission changeAIM, NIES

160
140
120
100
80
60
40
20
0-20-40

small
large
rentalrepair1995 1997

1999 2001

2003 2005
2007 2009

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Progress in structure: (1) Waste from stock and reuse

Messages from simulation
 Expansion of reuse will make quantity ofmunicipal final disposal decrease.
 CO2 will increase in small expansion of reuse,
because reuse delay energy efficiency
improvement.
 On the other hand, CO2 will decrease in large
amount of reuse, because economic
structure itself will shift from manufacture toservice industry such as repair.
 Please contact Ms. Miyashita for more detail!
AIM, NIES

AIM/Material Japan13

Progress in structure :(2) Reproduction of detailed waste flow
Additional flow
self treatment18 industrial
wastesfin. disp.
int. man.

industrial
waste man.
sectorproduction

recycledir. reusedir. disp.

8 municipal
wasteshouseholdAIM, NIES

8 municipal
wastesint. man.
municipal
waste man.
sectorfin.
disp.
recycledir. reusedir. disp.

AIM/Material Japan

recycle

fin.
disp.
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Simulations :(1) Taxation reform in Japan

Outline From 2003, taxation to energy will bereformed as follows;
Energy[present] → [in 2007](increase ofcarbon price)¾ Steam coal:
0 → 700 ¥/ton (1065 ¥/tC)¾ Natural gas:
720 → 1080 ¥/ton ( 490 ¥/tC)¾ LPG:
670 → 1080 ¥/ton ( 500 ¥/tC)¾ Electricity: 0.445 → 0.375 ¥/kWhAIM, NIES

AIM/Material Japan15

Simulations :(1) Taxation reform in JapanResults

Year
1995

2000

2005

2010

CO2 Change [MtC/year]

0.00
-0.05
-0.10
-0.15
-0.20
-0.25
-0.30
-0.35
-0.40

AIM, NIES

1% more rapid
2% more rapid
5% more rapid“X% more rapid” means that by energy price increase,
the related energy efficiency in new capital is changed
from α%/year to α(1+X/100)%/year.
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Simulations :(2) Simulation of environmental policies

Outline Environmental constraints will

decrease economic activity.
CO2 reduction and solid waste disposal
reduction
 Appropriate environmental policy will

recover economic losses.
environmental investment, technology
change, taxation reform, preferencechangeAIM, NIES

AIM/Material Japan17

Simulations :(2) Simulation of environmental policies

Result: GDP in reference case
Trillion yen at 1995 price

600
580
560
540
520
500
480460440
1995

2000

2005

2010

Year
Actual valuesAIM, NIES

Calculated values

AIM/Material Japan18

Simulations :(2) Simulation of environmental policies

Result: GDP loss by CO2 and final disposal
waste reduction
Year2000

2005

2010

GDP change[tri. Yen at 1995 price]0.0-0.2-0.4-0.6-0.8-1.0

0.5% of GDP-1.2-1.4
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Simulations :(2) Simulation of environmental policies

Result: GDP recovery by environmental
investment
Year2000

2005

2010

-0.2

GDP loss

GDP change[tri. Yen at 1995 price]0.0-0.4-0.6-0.8-1.0-1.2

Mitigation by env. Industry
and investment-1.4
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Simulations :(2) Simulation of environmental policies

Result: GDP recovery by technologyimprovement
Year
2000

2005

2010

GDP loss

GDP change[tri. Yen at 1995 price]0.0-0.2-0.4-0.6-0.8-1.0

Mitigation by technology
improvement-1.2-1.4
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Simulations :(2) Simulation of environmental policies

Result: GDP recovery by taxation systemchangeYear2000

2005

2010

GDP loss

GDP change[tri. Yen at 1995 price]0.0-0.2-0.4-0.6-0.8

Mitigation by subsidy
to waste treatment-1.0-1.2-1.4

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Simulations :(2) Simulation of environmental policies

Result: GDP recovery by preferencechangeYear
2000

2005

2010

GDP loss

GDP change[tri. Yen at 1995 price]0.0-0.2-0.4-0.6-0.8

Mitigation by green
consumption-1.0-1.2-1.4

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Simulations :(2) Simulation of environmental policies

Result: GDP recovery by various
countermeasures
Year2000

2005

2010

-0.2
-0.4
-0.6
-0.8
-1.0-1.2-1.4

AIM, NIES

Mitigation bygreen consumption
Mitigation by subsidy
to waste treatment
Mitigation by technology
improvement
Mitigation by env. Industry
and investment
AIM/Material JapanGDP loss

GDP change[tri. Yen at 1995 price]

0.024

Simulations: (2) Simulation of environmental policies

Messages from this simulation
 In Japan, constraints on CO2 and final

disposal of solid waste will bring 1.4
trillion yen of GDP loss in 2010.
 But Environmental industry will
mitigate more than 30% of GDP loss.
 Moreover, the encouragement of green
consumption or related policies will
improve environment and economy.
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AIM/Material Japan25

Other topics
 Simple AIM/Material (for India Workshop)
 Comparison analysis (India & China, not yetbe completed)
Please refer to Dr. Rana’s presentation!
Please refer to Dr. Yan’s presentation!
 Introduction of natural assets: with Ms. Suwa(TIT)
Please refer to next my presentation!

AIM, NIES

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