11. AIM/Material Model
Toshihiko Masui1, Ashish Rana1, and Yuzuru Matsuoka2
Summary. The AIM/Material model has been developed for assessing policy
impacts not only on CO2 emissions reduction but also other environmental issues,at present mainly focusing on solid waste management. Some activities for CO2
emissions reduction are related to solid waste management. By using this model,
both global climate policies and the domestic environmental policies can beassessed simultaneously. Other features of this model are as follows; not only an
economic balance but also a materials balance is reproduced, and environmental
industry and environmental investment to reduce environmental burdens are
introduced. This model has been applied to Japan and India. In the case of Japan,
the reduction of CO2 emissions and final disposal of solid wastes in 2010 based on
the Kyoto Protocol and government targets, respectively, will lead to a 0.5% loss
in the GDP compared with the reference scenario. On the other hand, theintroduction of environmental investment and other policies such as technology
improvements and green consumption will mitigate more than half of the GDP
loss. As for India, since toxic waste is a much more serious environmental
problem than final disposal, this model is applied to the reduction of toxic waste.

11.1 Introduction
The AIM/Material model is a component of the AIM family and is used mainly
for assessing the domestic macro economic impacts of policies on not only CO2emissions reduction, but also other environmental issues. AIM/Material has beendeveloped in order to support solutions to the various environmental problems thateach country may have. In the case of Japan, greenhouse gas emissions reduction
is one of the most important global environmental issues, and moreover, the waste
management problem is one of the most serious domestic environmental issues
due to the scarcity of final disposal sites for solid wastes. In order to solve thissolid waste problem, the “Basic Law for Establishing a Recycling-based Society”
was enacted in May 2000, and the “Basic Plan for Establishing a Recycling-based
Society” will be established in 2003 and will be reviewed every five years. In
developing countries, not only climate change, but also domestic pollution
problems such as water and air pollution problems are important for policy
makers. Besides environmental policies, the environmental industry andenvironmental investment hold the key to realizing both economic development
and environmental conservation. At present, this AIM/Material model can deal
with both CO2 emissions reduction and solid waste generation and treatment
12

National Institute for Environmental Studies, Tsukuba 305-8506, Japan
Kyoto University, Kyoto 606-8501, Japan

178 Masui, T. et al.

simultaneously. In this chapter, the structure of the model and its application to
Japan and India are introduced.

11.2 Structure of AIM/Material Model
11.2.1 Overview
The AIM/Material model is a top-down type macroeconomic model based on thecomputable general equilibrium model for each country. This model has recursive
dynamics year by year. One of the features of this model is that it represents a
consistent approach not only to the economic balance, but also the materials
balance. Due to this feature, solid waste generation and treatment can be dealt
with. This section explains the structure of the AIM/Material model based on its
application to Japan.
In this model, three economic agents are taken up: the production sector, thehousehold sector, and the government. AIM/Material applied to Japan has 41
economic sectors and 49 commodities. Table 1 shows the economic sectors andcommodities in the Japan model. Figure 1 represents the overall model structure.
The production sectors produce economic goods through inputs of capital, labor,energy, other intermediate inputs, and pollutants. Pollutants as an input factor
means the inputs necessary for the treatment of the generated pollutants, such as
the cost of introducing environmental control and monitoring equipment and its
operation, since it is assumed that the discharge of pollutants should not exceed
the related environmental standards. That is to say, below the environmental
standard, the generated pollution can be discharged into the environment, but any
excess beyond the standard should be treated in appropriate ways. In the
production sectors, the solid waste management sectors are different from normal
production sectors. Solid wastes are mainly disaggregated into two types:
industrial waste and municipal waste. Industrial waste is defined as waste fromproduction processes, and municipal waste is from the household and businesssectors. Each type of waste is disaggregated into more detailed waste categories.
Table 2 shows the waste categories in this model. Each waste category of bothindustrial waste and municipal waste is disaggregated into 3 subsectors; direct
reuse, direct final disposal, and intermediate management, such as incineration.
Each sub-sector manages the solid wastes by inputting capital, labor, energy, andother intermediate inputs. The total quantity of the direct reused wastes and thereusable residual materials after intermediate management are supplied to themarket as recycled materials. The total quantity of direct disposal wastes and theresidue from intermediate management are dumped. In order to maintain theconsistency of the materials balance, the share of recycled materials input in eachsector is fixed in advance based on the capital, as shown in Table 2. The
environmental industry is disaggregated from the other production sectors. In thismodel, the environmental industry is defined as the sector producing theenvironmental equipment to manage pollutants. The output of the environmental

11. AIM/Material Model

179

industry is supplied as an environmental investment in the other sectors.
The household sector retains labor and capital, and supplies it to the production

Table 1. Sectors and commodities in AIM/Material [Japan]
SectorCommodity
agr Agriculture, forestry and fisheries
min Mining except energy
mcc Coking coalm_c Coal mining
msc Coal for general use, lignite, anthracite
m_o Crude oil mining
m_g Natural gas mining
fod Manufacture of foodtex Manufacture of textile mill products
plp Manufacture of lumber, wood products, pulp, paper and paper productschm Manufacture of chemical and allied products
pls Manufacture of plastic
nmm Manufacture of ceramic, stone, and clay products
stl Manufacture of iron, steel, ferrous metals and products
nsm Manufacture of non-ferrous metals and products
fmt Manufacture of fabricated metal products
mch Manufacture of general machineryelm Manufacture of electrical machinery, equipment and supplies
tre Manufacture of transportation equipment
pri Manufacture of precision instruments and machinery
oth Miscellaneous manufacturing industries
cns Construction
het Steam and hot water supply
wtr Water supply
sal Wholesale and retail trade
fin Finance and insurance
est Real estate
trs Transportation and communications
pub Education, research, medical service, health & hygiene, and social welfare
rnt Goods renting and leasing
rep Car and machine repairing
prs Other service
gov Government service
emc Environmental industry
sew Sewage service
mwm Municipal solid waste treatment service
iwm Industrial solid waste treatment service
cck Cokecol Manufacture of coal products
ccg Other coal products
cbf Paving materials
ogl Gasoline
ojf Jet fuel oil
okr Kerosene
olo Light oil
oil Manufacture of petroleum
oho Heavy oil
onp Naphtha
olp LPG
oot Other petroleum refinery products
gas Manufacture of gas
gtg Town gas
the Thermal power generationele Electricity
hyd Hydro power generation
nuc Nuclear power generation

Note: In the model, one sector can produce plural commodities using V matrix (makematrix).

180 Masui, T. et al.

sectors. As a result, households receive income as wages and rent from theproduction sectors. Under the constraints of income, households demandcommodities based on the demand function. In the demand function, savings arealso included as demand for investment goods. The demand for investment goods
is determined by the fixed capital matrix.
The government sector imposes taxes on the production sectors and household
sector. In this model, the tax is aggregated into 4 types: capital tax, labor tax,
Table 2. Classification of solid waste and assumption of recycling flow

OOT

CCK

NSM

STL

CHM

NMM

PLP

TEX

FOD

MIN

Commodity substituting to recycled
waste

Waste

○ ○
ASH Ash○ ○○SLD Sludge○○
WOL Slush, waste oil○
WAC Waste acid○
WAL Waste alkali○○
WPL* Waste plastics○
WPP* Waste paper○○
WWD* Waste wood○
WTX* Waste fiber and textile○
WAP* Animal and plants wastes○
WRB* Waste rubber○ ○SCM* Metal trash, scrap metal○
WGC* Waste glass○
SLG Slag
WCT Construction and demolition waste ○○DST Dust, soot○
EXC Animal excrement○
CRC Animal carcass
●
AGR
TEX
●
PLP
●
CHM
●
PLS
●
NMM
●
●
Sector utilizing waste material
●
●
STL
NSM
●
OTH
●
CNS ●
COL
●
OIL
●
Note: Refer Table 1 for names of sector and commodity.
* in waste category shows the classification of both municipal and industrial waste. Others
are for only industrial waste.
○ means the waste indicated by row can be used as the commodity indicated by column.
● shows that the reused material indicated by column is input to the sector indicated byrow.

11. AIM/Material Model

181

production tax, and import tax. In the case of a reduction in CO2 emissions and thefinal disposal of solid waste, the related taxes, such as a carbon tax and solid wastetax, are imposed on the agents. Based on tax revenues, the government sector
provides public services and public investment.
Although this model is a country model, international trade is very significant.
Especially in Japan, the importation of fossil fuels is essential to its economic
activities. In this model, the international price is fixed in advance based on thesmall country assumption. The international prices of all commodities except forenergy are fixed at the initial year. The international energy price is given
according to the scenarios based on the AIM/Emissions model. Moreover the total
value of imports and exports in the future is given according to the scenario, andindividual imports and exports are calculated endogenously.
11.2.2 Mathematical formulation of AIM/Material
For simplicity, the model of the following three sectors as shown in Table 3 isassumed. Sectors 1 and 2 are ordinary economic sectors and sector 3 is a waste
management sector. Commodities 1 and 2 are ordinary commodities andcommodity 3 is a waste management service.
Market for produced commodities and production factors
The market equilibrium for produced commodities can be represented by thefollowing equations.

Sector 1

Sector 2

Sector 3

I11

I12

I13 Y11+Y21+Y31 P1Commodity 2 X21 X22 X23

C2

I21

I22

I23 Y12+Y22+Y32 P2

Commodity 3 X31 X32 X33

C3CapitalLabor
Final disposal
Commodity 1
Commodity 2
Commodity 3

K1
L1

K2
L2

Y11 Y21Y12 Y22

K3
L3
W3
Y31
Y32
Y33

Supply

Y33

Price

Final
Consumption
C1

Sector 2

Commodity 1 X11 X12 X13

Sector 1
Intermediate
inputs

Input
OutputInvestment

Sector 3

Production
sectorEndowment

Table 3. Social accounting matrix in the hypothesized economy

P3
PK K*
PL L*
PW W*
P1
P2
P3

182 Masui, T. et al.

{}Pi ∑ j =1Y ji − (∑ j =1 X ij + Ci + ∑ j =1 I ij ) = 0 , Pi ≥ 0 , and33∑ Y − (∑
3

j =1

ji

3

X ij + Ci + ∑ j =1 I ij ) ≥ 0

3

3

j =1

These equations indicate the relationship between the commodity price Pi andthe demand and supply of that commodity. The excess demand for eachcommodity i does not exist. In the case of a market equilibrium, that commodity
has a positive price, Pi. On the other hand, in the case of a disequilibrium state,that is to say, in the case of excess supply, the price of this commodity i becomes
0. In the example of Table 3, there is no demand for the waste management
service produced by sector 3 as investment goods. In addition, Y31 and Y32, which
are commodity 1 and 2 produced by sector 3, can be regarded as recycled goods.
The capital market and labor market also can be explained by the following
equations.

{}
P {L − ∑ L } = 0, P ≥ 0, and L − ∑ L ≥ 0

PK K * − ∑ j =1 K j = 0, PK ≥ 0, and K * − ∑ j =1 K j ≥ 0
3

*

L

3

3

*

j =1

j

L

3

j =1

j

Government

Taxes, subsidies,public services, andpublic investment

Households
Final consumption

Environmental
industry

Resource inputs

MarketReuse
Production
sector

Solid
waste

Waste
management

Intermediate
treatment
Disposal

Investment

Final disposal site
CO2
Capital Labor Energy Other intermediate inputs

Pollution

Environmental Investment

Recycling

Resource inputs

Note:shows the flow of solid waste. In the model, municipal waste management sector
and industrial waste management sector are set by the waste category. As for the waste
category, see Table 2.
shows the flow of the capital investment and environmental investment. Although
the capital is endowed in household, for simplicity, the investment is input from market
or environmental industry directly in this figure.
Fig. 1. Overview of AIM/Material11. AIM/Material Model183

In the capital market and the labor market, total demand for these is less thanthe endowment of capital and labor, respectively. In a state of equilibrium forthese production factors, these prices become positive values, but in a state of
disequilibrium, that is to say, the supply of these factors is more than the demand,the prices become 0.
As for the quantity of disposable waste, W, sector 3 disposes of the residualmaterials generated through waste treatment. The maximum quantity of thismaterial for final disposal is W*. Sector 3 cannot dispose of more than W* of theresidual materials. When the quantity for disposal is equal to W*, the marginal costfor dumping, PW, becomes a positive value. The situation in which the quantity forfinal disposal is less than W* is regarded as an excess supply, and the price of final
disposal is 0. That is to say, the quantity of materials for final waste disposal canbe expressed by the following equation in the same way as for capital and labor.

{}

PW W * − ∑ j =1W j = 0, PW ≥ 0, and W * − ∑ j =1W j ≥ 0
3

3

In the example of Table 3, the values of W1 and W2 are 0, since only sector 3
generates materials for final waste disposal. If the self management of solid wastes
and the dumping of the residual materials from this self management areconsidered, the values of W1 and W2 are effective.
Production sectors
The revenues and expenditures in each production sector can be expressed by thefollowing equation.

∑ P X + P K + P L + P W = ∑ PY
3

i =1 i

3

ij

K

j

L

j

W

j

i =1 i ij

The left hand side of this equation shows the expenditure for buying
intermediate goods and other production factors in order to produce commodities.
The right hand side represents the total revenues from selling the produced
commodities in each sector. This equation also shows that the revenues andexpenditures are balanced in the sector j. In order to represent the relationshipbetween inputs and outputs, the appropriate production function is defined. In thismodel, in order to maintain a materials balance besides a monetary balance, thevalues of the elasticity of substitution or distribution are assumed to be 0 or
infinity, except for the aggregation of different type of materials, such as capitaland labor.
Household sector
The household retains resources such as capital, K, labor, L, and the final disposal
area for solid waste, W. The household sector supplies these resources to the
production sectors, and receives the income as the counter values of theseresources. The household consumes the goods to maximize its utility, subject toincome constraints. The income of the household can be expressed as follows byusing the rent for capital, PK, the wages, PL, and the marginal cost of the final
disposal of solid waste, PW.

184 Masui, T. et al.

H = PK ∑ j =1 K j + PL ∑ j =1 L j + PW ∑ j =1W j
3

3

3

On the other hand, in order to calculate the quantity of demand for eachcommodity, the demand function has to be specified. Here, savings are included in
the demand function as the demand for investment goods Iij besides the final
consumption Ci. The next equations show the expenditure of the household sector,
and the change in capital stock. The total of new investment is added to theexisting stock depleted at δj. The parameters for technological change, such asenergy efficiency improvements, are calculated from the new technology
assumption and the new equipment as a proportion of the total capital.

H = ∑ i =1 Pi (Ci + ∑ j =1 I ij )3

3

K j ,t +1 = (1 − δ j ) K j ,t + ∑ i =1 I ij
3Flow of solid waste
In Table 3, the solid wastes can be managed only by the waste management sector.
However, in reality, the quantity of solid wastes managed by each sector isrelatively large. As a result, this model includes not only a waste management
sector, but also the self management of solid wastes in each sector. The generated
solid wastes in each sector are distributed between the self management sub-sector
in the sector itself or the waste management sector. After the management of solid
wastes, some of the solid wastes are recycled to the market, some of them are
reduced through the incineration process, and the rest are dumped at the final
disposal site. The endowment W* represents the maximum quantity of the final
disposal of solid wastes. W* can be defined with respect to each waste type.
Through the definition of this solid waste treatment activity, the appropriate solid
waste treatment strategies can be estimated, such as the recycling policy andintroduction of innovative technologies in solid waste management.
CO2 emissions
The CO2 emissions from each sector are calculated from the quantities ofcombusted fossil fuels and their emission factors. If the CO2 emissions exceed an
upper limit, such as the Kyoto Target, a carbon tax is imposed on the combusted
fossil fuels, as with the PW in Table 3.
Government
The government sector is also one of the final demand sectors, in the same way as
the household sector. However, the roles of the government sector are quite
different from those of the household sector. The roles of the government in thismodel are defined as follows:• The government sector collects taxes, supplies public services and makes
public investment.

11. AIM/Material Model

185• When an environmental burden is beyond the standard, the government sector
imposes an environmental tax. The rate for this environmental tax is equivalent
to Pw in Table 3.

11.3 Application of AIM/Material to Japan
11.3.1 Economic impact of the management of CO2 and solid wastes
Currently Japanese society has many environmental problems that require
immediate attention. For example, greenhouse gas emissions reduction, waste
management, air pollution, and so on. While considering these environmental
problems, economic growth should not be ignored. It is generally thought thatenvironmental conservation and economic development are in conflict. However,in order to achieve a sustainable society, these two problems need to be solved
simultaneously. AIM/Material indicates one solution.
In order to apply the AIM/Material model to Japan, a social accounting matrix
is constructed based on input-output tables and other related databases for 1995.
Table 4 represents the database used for this application. The simulation period isfrom 1995 to 2010. In order to estimate the economic impacts from theenvironmental constraints and mitigation due to environmental policies, thefollowing scenarios were proposed.
1) Reference scenario
2) Environmental constraints scenario
3) Environmental constraints and countermeasures scenario
In scenario 2) and scenario 3), two environmental constraints were considered.
One is the CO2 emissions reduction target based on the Kyoto Protocol. The other
Table 4. Dataset for AIM/Material [Japan]
EconomyWaste

Management and Coordination Agency ed. (1999)
Ministry of Health and Welfare (1998a)
Ministry of Health and Welfare (1998b)
Investment
Management and Coordination Agency ed. (1999)
Department of National Accounts, Economic Research Institute,
Economic Planning Agency (1999)
Environmental The Japan Society of Industrial Machinery Manufacturers
industry
Tax

Management and Coordination Agency ed. (1999)
Ministry of FinanceResearch institute of international trade and industry (2000)
EnergyMinistry of international Trade and Industry (1996, 1997)
Agency of Natural Resources and Energy, Ministry of International
Trade and Industry (1999)
Note: The names of ministries are the names when these literatures were published.

186 Masui, T. et al.

is the reduction in the final disposal of solid waste based on the government target
that the quantity of materials for final disposal as waste in 2010 should be half ofthat in 1996. The countermeasures in scenario 3) represent the increase inenvironmental investment, the introduction of efficient equipment for solid waste
treatment, subsidies for power generation from waste, and the shift to green
consumption, that is to say replacement of ordinary commodities by eco-products.
Until 2000, in order to reproduce the actual values, the parameters fortechnological improvements, propensity to save and so on are adjusted. Moreover,in the reference scenario, these parameters are calibrated in order to follow the
future economic development path represented in the existing estimations. Figure
2 represents the GDP trajectory in scenario 1).
Figure 3 shows the change in the GDP in scenario 2) and scenario 3) based on
scenario 1). From a comparison between scenario 1) and scenario 2), theTrillion yen at 1995 p rices

600
580
560
540
520
500
480
460
440
1 995

2000

2005

2 010

Year
A ctual values

Calculated values

2010

GDP change[trillion yen at 1995 prices]

0.0
-0.2
-0.4
-0.6
-0.8
-1.0
-1.2

M itigation of GDP loss
‡C Green consumption‡B Subsidies to waste treatment‡A Technological improvements‡@ Environmental investment& environmental industry-1.4
Fig. 3. GDP loss from environmental constraints and its mitigation

GDP loss
after mitigation

Year
2005

Mitigation of
GDP loss

2000

GDP loss from environmental constraints

Fig. 2. GDP trajectory of scenario 1)

11. AIM/Material Model

187

environmental constraints will have a negative impact on the economy. In 2010,
the GDP loss will be 0.5 % of the GDP in scenario 1). On the other hand,
introducing various countermeasures as shown in scenario 3) will make it possible
to recover more than half of the economic losses suffered from the environmental
constraints.
The reasons for the mitigation of the GDP losses are considered to be as
follows. Firstly, the mitigation of environmental constraints will be achieved bythese countermeasures. The second reason is the increase in environmental
investment and green consumption will activate environmental industries and the
production sectors that produce the eco-products. Moreover, the increase inenvironmental investment and eco-products has the potential to reduce theenvironmental burden. These advantages affect the mitigation of the GDP loss andeconomic activities.
11.3.2 Linkage of AIM/Material to the bottom-up model
AIM/Material is a top-down model. In order to solve the AIM/Material model,
assumptions related to the efficiency of technology and social change are required.
The solution of AIM/Material can reproduce consistent interaction among sectors.
In order to assess the feasibility of the introduction of technology, the support of abottom-up model, such as the AIM/Emissions model, is inevitable.
In order to meet the needs, a technology model on sewage sludge treatment has
been constructed and linked to the AIM/Material model as a trial. Since thestructure is too complex and the numbers of the variables are too large when thetechnology model is included in the AIM/Material, AIM/Material and thetechnology model are linked serially year by year. The concept for this linkage isshown in Fig. 4. In this linkage, the quantity of sewage sludge generation, theprice of final disposal and materials recycling demand calculated in AIM/Material
from one model are used for the assumptions in the technology model. The
efficiency of sewage sludge treatment from the technology model is used for the
Sewage sludge generation
Price of final disposal
Recycle materials demand

Technology
model
in 1995
Productivity of sewage sludge treatment
Generation of final disposal

AIM/Material
in 1995

AIM/Material
in 1996

Fig. 4. Linkage of AIM/Material and technology model

Technology
model
in 1996

188 Masui, T. et al.

assumption in AIM/Material. Figure 5 shows the changes in the technologies
under different constraints in relation to the final disposal of solid wastes. In thecase of the reference case without constraints on final disposal sites, only standard
technologies will be introduced. On the other hand, the scenario with constraints
on final disposal sites introduces new technology that is more efficient, although
the cost is higher.
By linking these two types of models, a top-down model and a bottom-up
model, more realistic countermeasures can be assessed. The AIM team is now
trying to expand the technology model in order to analyze other fields.
11.3.3 Effects on CO2 emissions from changes in the tax rates on
fossil fuels
In Japan, taxes imposed on fossil fuels are very high at present. The current tax
rates are tentative, and are planned to be reduced to almost half in 2003. Table 5
represents the values for the tax rates. These high tax rates have a role in reducing
CO2 emissions, just like a carbon tax. If the tax rates are now returned to theoriginal (after 2003) values, the opposite effect of a carbon tax, that is to say, an
increase in CO2 emissions, may occur. By using AIM/Material and changing thetaxation rates on fossil fuels, the changes in CO2 emissions can be estimated.
Figure 6 shows the results for CO2 emissions. CO2 emissions in 2010 will
increase by 6.5 MtC according to the change in the tax rates. These values areequivalent to 2.2 % of the emissions in 1990. That is to say, more than half of theamount of the carbon sink under the Bonn agreement, 3.9% of the emissions in
1990, are offset.
100%
80%
60%
40%

100%

2
0
0
0
%
% 1222
9000

80%
60%
40%
20%

20%
0%
1995

2000

2005
Year
No constraints casenew others
new compost
new incineration

2010

conv. othersconv. compost
conv. incineration

0%
1995

2000

2005
2010
Year
With constraints casenew drying
new melt furnace

Note: “Conv.” means “conventional.”
Fig. 5. Changes of technology share in two scenarios

conv. drying
conv. melt furnace

11. AIM/Material Model

189

Table 5. Tax rate of gasoline and light oil in Japan

M t-C/year

Gasoline
Light oil
390
380
370
360
350
340
330
320
310
300
1995

Present (tentative) rate
53.8yen/l
32.1yen/l

Original (after 2003) rate
28.7yen/l
15.0yen/l

Reference case(present rates)
Tax reform case(original rates)
Actual values

2000

2005

2010

Year
Fig. 6. CO2 emissions change by tax reform

11.4 Application of AIM/Material to India
11.4.1 Modifications to the model
For the application of AIM/Material to India, some changes were incorporated
taking into consideration the specific environmental problems of India as well as
problems related to the availability of data that is as detailed as in the case ofJapan. In India the problem of hazardous waste has a higher priority than dealing
with other types of industrial solid waste. To take this into account, a significant
modification in the India model is the separate treatment of hazardous, or toxic,
waste and its disposal. A separate limit is set for the discharge of toxic waste into
the environment. This limit is similar in character to the limit on the final disposalof waste, W*, described in section 11.2.2.
Due to the limited data, the present version of AIM/Material [India] has 26
economic sectors and 24 commodities as shown in Table 6. The base year is taken
as 1994 and the model is calculated year by year until 2010. Solid wastes are
categorized into 15 types, including toxic waste, as shown in Table 7.
Furthermore, solid wastes are classified as either industrial or municipal wastes.
The industrial wastes are defined as wastes generated from production processes,
and municipal wastes are defined as wastes from households and businessactivities.

190 Masui, T. et al.

11.4.2 Data sources
An input-output table, with data on the energy sector and data on solid wastes isrequired for the model. The input-output tables for 1993-94 available from theCentral Statistical Organization of the Government of India were utilized (CSO
2000). Data on the energy sectors were taken from TEDDY 2000-2001 (TERI
2001). To estimate solid wastes from individual sectors, data on waste generation
intensities for industries available from the documents of the Central Pollution
Control Board of India (CPCB, various issues) and some other published sources
was compiled. Typically, waste generation intensities are tabulated by waste type
and production quantities in the base year and are applied to arrive at an
estimation of the total waste generated in the sector. Usually the task is notstraightforward as the waste generation intensities as well as waste types may
differ within a single sector, depending on the technology in use. For example, inthe case of the paper industry, large and medium-sized paper mills use wood as
Table 6. Classification of sectors and commodities in AIM/Material [India]
ID
Description
AGR Agriculture, forestry, fishing
MIN Mining
FOD Food
TEX Textiles
PLP Paper and pulp
CHM Chemicals
NMM Non-metallic minerals
BMT Basic metals
FMT Fabricated metals
MCH Machinery
ELM Electrical machinery
TRE Transport equipment
OTH Other manufacturing
CNS Construction+
Only sector; * Only commodity

ID
WTR
SRV
MWM
IWM
EMC
GOV
COL
OIL
GAS
HYD+
THE+
NUC+
ELE*

Description
Water supply
Services
Municipal waste management
Industrial waste management
Environment industry
Government service
Coal
Oil
Gas
Hydro power generation
Thermal power generation
Nuclear power generation
Electricity

Table 7. Classification of solid wastes in AIM/Material [India]
ID
Description
ID
ASH
Ash
SCM**
SLD
Sludge
WGC**
WOL
Waste oil
SLG
WPL** Waste plastic
WCT
DST
WPP** Waste paper
WWD Waste wood
WZZ**
WWT
WTX** Waste textile
WAP** Animal and plant waste**
Both industrial and municipal waste categories

Description
Scrap metal
Waste glass
Slag
Construction waste
Dust
Other waste
Toxic waste

11. AIM/Material Model

191

well as agricultural residues for pulp making, while small industries use
wastepaper as inputs, which results in a substantial difference in the quantity andquality of their waste generation. In the fertilizer industry, solid waste generation
is 0.085 tons per ton of fertilizer production. Steel plants produce solid waste in
the form of slag and dust. The amount of slag and dust produced is about 500 kg
and 25 kg per ton of pig iron produced from blast furnaces. Pig iron is converted
to steel through an open-hearth furnace or oxygen furnace, producing about 22 kgof dust per ton of steel. The manufacture of sulfuric acid generates solid waste in
the form of sulfur sludge which amounts to 2.5 – 2.8 kg/ton of sulfuric acid.
Construction activity generates solid wastes, which include sand, gravel, concrete,stone, bricks, wood, metal, glass, plastic, paper, etc. The management ofconstruction and demolition waste is a major concern for town planners due to theincreasing quantities of demolition rubble, a continuing shortage of dumping sites,
increases in transportation and disposal costs and, above all, growing concern
about pollution and environmental degradation. The Central Pollution Control
Board has estimated that waste from the construction industry accounts for 25% of
the total volume of solid waste generated in India. Such a high volume of waste
puts enormous pressure on solid waste management systems. Municipal solid
waste data is based on the Planning Commission report published in 1995.
Data on toxic waste is mainly drawn from the report of the High Powered
Committee (HPC) established in 1997 by the Supreme Court of India to produce acomprehensive study related to hazardous wastes in the country. In its detailed
final report in 2000, the committee clearly indicates the dubious nature of data thatis reported by industry with respect to the hazardous wastes generated by them(High Powered Committee on the Management of Hazardous Wastes 2000). The
data, made available at its behest and further refined by officials, records 4.4
million tonnes of hazardous waste being generated per year within the country.
This is further classified under various toxic waste categories according to theHazardous Waste Rules 1989 guidelines. For the present study, the categories of
toxic sludge that contributed the largest proportion were considered, covering
around sixty percent of the total volume of toxic waste. This was done in order tomake it possible to easily attribute the generated waste to the relevant waste
generating sectors. Dealing with all categories together poses a challenge of
attribution, in the absence of other data.
11.4.3 Scenarios
Three scenarios were constructed for this application.
Scenario 1:

This is the reference or business-as-usual scenario and there are
no interventions to limit waste disposal.

Reference case, Scenario 1, depicts an average annual GDP growth of 5.85%
for the period 1994-2010 for India. Figure 3 shows the match between the actual
statistics for the GDP and that simulated using the model in the overlapping
periods. Total industrial waste generation is simulated to grow at 4.9% during the192 Masui, T. et al.

model period. Growth in the disposal of non-toxic waste is 3.5% per year whilethat for toxic waste disposal is 3%. The growth rate for the waste management
service sectors (IWM and MWM) is 5% and the environment industry grows at
6.28%.
Scenario 2:

Toxic Constraints Scenario – In this scenario a limitation on the
discharge of toxic wastes is imposed.

This scenario is not driven by a government target but represents the effect of a
combination of many actions that are expected to be taken by state governments
and pollution control boards. The aforementioned HPC on Hazardous Waste has
made several recommendations regarding the siting of secure landfills, the first ofwhich states that reliance on land-based disposal should be minimized oreliminated as land-based disposal is the least favored method of managing
hazardous wastes. Open dumping contaminates drinking water from undergroundand surface supplies and this practice can lead to real hazards for human healthand the environment. Corrective action is bound to be expensive, complex andtime consuming. Hence, reliance on land-based disposal should be minimized oreliminated. Other actions include stopping indiscriminate disposal of toxic waste,
shutting down illegal dumping sites, relocation of industries away from
ecologically sensitive sites, strict adherence to environment impact assessment
criteria for sites, and so on. Scenario 2 is constructed by limiting the amount of
resources, or endowment, for toxic waste disposal. From the year 2002, theavailable endowment for toxic waste disposal is decreasing at a rate of 10 percent
every year.
Scenario 3:

In this scenario countermeasures are introduced throughincreased environmental investment and labor efficiency
improvements in the waste management sector.

Environmental investment is one way of boosting the capacity for the treatment

Rs. trillion(constant 1993-94 prices)250
Historical
200

Simulated (Scenario 1)

150
100
50
0
1970

1980

Fig. 7. Historical GDP and GDP in Scenario 1

1990
Year

2000

2010

11. AIM/Material Model193

and management of waste, thereby relieving the constraints posed in Scenario 2.
At the same time, as mentioned earlier, it is clear that much of the mitigation canbe achieved at a low marginal cost through improvements in waste management
systems, improvements in organizational efficiency and other low-tech measures,such as greater segregation of wastes. A 5% increase in environment investment
accompanied by labor efficiency improvements of 10% are taken into
consideration in Scenario 3 from 2005.
11.4.4 Results
When faced with a constraint in Scenario 2, the following effects are observed in
the economy. Toxic waste disposal is restricted to 1.29 Mt by 2010, a reduction of
more than 60% over Scenario 1 for the same year, while disposal of other(non-toxic) waste decreases marginally over Scenario 1 (Fig. 8). Reduced toxic
waste disposal is accompanied by restraint on the part of the toxic waste
producing sectors as well as other sectors due to cross-linkages between them. By
comparing the sectoral GDP in Scenario 2 in various years with that in Scenario 1,
the overall GDP loss in 2010 can be observed to be around 2% over Scenario 1.
In Scenario 3, however, some GDP loss is recovered as the capacity to manage
waste is enhanced (Fig. 9). The output for most of the sectors is also recovered in
Scenario 3 (Fig. 10). Only 8 out of 26 sectors show a slight decrease in their GDP
over Scenario 2. These sectors are Agriculture (AGR), Food (FOD), Water
services (WTR), Government (GOV), Gas (GAS), and the two waste management
sectors - MWM and IWM. None of these sectors generates hazardous waste, but
due to the increased output of other sectors there is some level of demandswitching. The reason for the decrease in the output of the waste management
sectors is that there is a reduction in demand for their services since the cost of
direct disposal is lower in this scenario. Among other sectors, the environmental
1.8

Index (1994 = 1)

1.6
1.4
1.2
1.0
Non-toxic (Scenario 1)
Non-toxic (Scenario 2)
Toxic (Scenario 1)
Toxic (Scenario 2)

0.8
0.6
0.4
1994

1998

Fig. 8. Trajectories of final disposal of waste

2002
Year

2006

2010

194 Masui, T. et al.

industry (EMC) output increases substantially and its growth rate in this scenario
is projected to be more than 20% and, compared with other equipment industries(MCH and ELM), to experience lower growth. (EMC is not shown in Fig. 10
because of the scale.) This result indicates the importance of this industry forpollution control.
Simulation results for toxic disposal constraints and mitigation do not indicate
any significant effect on CO2 emissions mitigation. Effects on waste recycling
were not studied in detail since the information provided for the model is limited.

Year
2009

2010

Rs. billion(constant 1993-94 prices)

0
-1
-2
-3
-4
Scenario 2-5

Scenario 3-6

Fig. 9. GDP change in scenario 2 and scenario 3

1.20
1.15

Scenario 2
Scenario 3

1.10

Index

1.05
1.00
0.95
0.90
0.85
AGR
M IN
FOD
TEX
PLP
CHM
NM M
BM T
FM T
M CH
ELM
TRE
OTH
CNS
WTR
SRV
GOV
MW
IWM
COL
OIL
GAS
THE
HYD
NUC

0.80

Fig. 10. Economic sectors showing change in output in 2010 over Scenario 1

11. AIM/Material Model

195

11.5 Conclusion
As shown in the application of AIM/Material to Japan and India, various
countermeasures can be assessed from the viewpoint of both a reduction of theenvironmental burden and the mitigation of economic losses. AIM/Material is asignificant tool for assessing the policies designed to achieve sustainable
development not only in the developed countries, but also in the developing
countries. Although this is the top-down model, the solutions with the reality
based on technology can be presented by linking it to the bottom-up model. Now
the AIM team is trying to include other environmental problems, such as waste
water treatment, and to apply it to other countries in the Asia-Pacific region.

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1bottom-up
11
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14
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8
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10
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197

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10
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13High Powered Committee
15
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2, 13
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5materials balance
1, 2, 7
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11
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2, 13
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7
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2solid waste
1, 8, 13sustainable development
19
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12
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2
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16
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1, 13, 15, 17
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5