Environmental Assessments using Environment-Economy Integrated
Models for the Asia-Pacific Innovation Strategy Project
J. Fujino, T. Masui, K. Takahashi, M. Kainuma, Y. Hijioka, H. Harasawa, Y. Matsuoka,
and T. Morita
AIM Project Team, National Institute for Environmental Studies (NIES)
16-2 Onogawa, Tsukuba, Ibaraki, 305-8506 Japan
1.
Introduction
The Asia-Pacific region is expected to lead world economy growth in 21st century, and its stable
development with half of the world population would become a key to secure global economic
activities. However, environmental problems in this region are threatening its economic growth.
Moreover, less availability of scientific knowledge on environment obstructs solving the problems.
Therefore, the balancing environmental protection and economic growth is an urgent
issue in Asia-Pacific region for the next decade, and it is crucial from longer-term
viewpoint to design more efficient and effective policies in order to introduce innovative
technologies/measures into the integration between environmental conservation and
economic development.
The international team of the Asia-Pacific Integrated Model (AIM) Project has been
developing environment-economy integrated models to assess the future scenarios of
socioeconomic development and environmental change in the Asia-Pacific region as well
as at global level. The team is also establishing a new type of database which supplies
not only basic socioeconomic and environmental data but also key indicators linked to
the data as well as several model to predict these indicators for policy makers’ use. The
model development and database establishment were adopted as core research works
for the Asia-Pacific Environmental Innovation Strategy Project (APIS).
This paper explains the outline of model development and database establishment
planned for the APIS project, with special reference to the AIM/trend model.
2.
Required innovation for Asia-Pacific sustainable development
Innovations in environmental field have been urgently required in the Asia-Pacific
region to bring in something new to break through the tradeoffs between environmental
conservation and economic growth as well as other policy goals. These innovations
include technological innovations, new products development, new production processes
penetration, establishment of new industrial organization, shifting to new consumption
1
patterns, new market creation, and new integration of innovations. Such innovations
are expected to solve the tradeoffs of policy goals not only between environmental field
and other policy field such as economic growth, but also among different environmental
policies, for example, global environmental policies vs. local environmental policies,
environmental policies in developed regions vs. those in developing regions, biomass
energy supply for climate policies vs. nature conservation for biodiversity policies, and
long-term environmental policies vs. short-term environmental policies.
Major innovation strategies for the Asia-Pacific region can be identified based on
the innovation type and the tradeoffs to be broken throw by innovations. Table 1 shows
the tentative list of these strategies which was used for determining the direction of
model development.
Table 1 Tentative list of innovation strategies
to solve tradeoffs between
environmental goal and other goals such
as economic growth
to solve tradeoffs among goals of
different environmental policies
technological innovations,
new products
development,
new production processes
penetration
Strategy of advanced environmental
technology development,
Environment-IT integration strategy,
Strategy of wide-area recycle system
introduction, etc.
Region-based zero-emission system
introduction strategy,
Strategy of supplemental new
environmental technology development,
etc.
establishment of new
industrial organization,
shifting to new
consumption patterns,
new market creation
Strategy for environmental industry
development,
Strategy of establishing new
environmental finance market,
Environmental premium raise strategy,
Strategy of consumers’ participation in
production process, etc
Strategy for comprehensive economic
incentive introduction,
Environmental government bond
strategy, etc.
new integration of
innovations
Strategy of soft-hard integrated
technology transfer,
Strategy for expanding international
environmental market, etc.
Global-local integration strategy,
Kuznets-Footprint integration Strategy,
Environmental turnpike strategy,
Inter-urban network strategy, etc.
3.
Applicable AIM modules for the APIS project
The set of AIM model were developed primarily for assessing effects of climate
policies and climate change impacts, but it can be applicable to other environmental
fields such as air pollution, water resource, land use change and ecosystem assessment.
Among of the AIM modules the following environment-economy modules could be useful
for the APIS project:

AIM/trend: communication platform to assess future trend of each countries in the
Asia-Pacific region supported with multi-regional environment-economy CGE
2
(Computer General Equilibrium) model

AIM/emission: Detailed technology selection model supported by CGE model to
estimate emissions of CO2, SO2, NOx, SPM and other pollutants, bottom-up type

AIM/material: CGE-supported model integrated with material balance to assess
recycle process and environmental industry

AIM/ecosystem: Detailed process model for ecosystem assessment focused on
surface water recycling, crop productivity and vegetation

AIM/CGE: General equilibrium model to simulate multi-regional global economy
with trade of commodities
Fig. 1
Applicable AIM modules for the APIS project
The above five types of modules can cover most of the request to analyze the
environmental innovation strategy in the Asia-Pacific region. Table 2 shows the
correspondent relationship, which module can be used to assess the effects of which
innovation strategy listed in Table 1.
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Table 2
AIM modules and correspondent strategy to be assessed
correspondent innovation strategies to be assessed
AIM module
AIM/trend
General analyses on the demand of environmental innovations,
Strategy of advanced environmental technology development,
Strategy for expanding international environmental market,
Strategy of advanced environmental technology development,
Environment-IT integration strategy,
Strategy of supplemental new environmental technology development,
Strategy of soft-hard integrated technology transfer,
Environmental turnpike strategy,
Inter-urban network strategy,
Strategy of advanced environmental technology development,
Environment-IT integration strategy,
Strategy of wide-area recycle system introduction,
Region-based zero-emission system introduction strategy,
Strategy for environmental industry development,
Strategy for comprehensive economic incentive introduction,
Environmental premium raise strategy,
Environmental turnpike strategy,
Strategy of advanced environmental technology development,
Strategy of supplemental new environmental technology development,
Strategy for comprehensive economic incentive introduction,
Global-local integration strategy,
Kuznets-Footprint integration Strategy
Strategy for environmental industry development,
Strategy of establishing new environmental finance market,
Strategy for comprehensive economic incentive introduction,
Environmental government bond strategy
Environmental premium raise strategy,
Global-local integration strategy,
Kuznets-Footprint integration Strategy
Environmental turnpike strategy,
Strategy for expanding international environmental market,
AIM/emission
AIM/material
AIM/ecosystem
AIM/CGE
3.
Development of strategic database
In addition to several models as assessment tool, a strategic database links various
types of supporting data and environmental indicator data, which will be provided from
model base, countermeasures option base, and index base (Fig. 2). This database will be
set in a useful form for policy makers and other related parties.
Model Base
Emission
Prospect of
Countermeasures Effect
EcoSystem
Economy
Environmental
Burden
Prospect of
Future Environmental Issues
Circulation
Prospect of
Economy
Prospect of
Environment
Index Base
Countermeasures Option Base
Technological Innovation
Life-style Innovation
・・・
Global Warming
Air Pollutants
・・・
Biodiversity
Database
Industrial Innovation
Comprehension of
Present
Countermeasures
Identification of
Present
Environmental
Issues
Identification of Necessary Countermeasures
Fig. 2 Strategic database development
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Evaluation Index of
Environmental Issues
4.
AIM-Trend Model
In order to clarify the demands of innovation introduction in the Asia-Pacific region,
we have been developing the model for assessing the future environmental burdens
based on the past socio-economic trends and future scenarios. By using this model, the
environmental trends until 2032 in the Asia-Pacific countries have been estimated. This
“AIM-Trend Model” is a communication tool to enhance discussions and search for
countermeasures by envisaging environmental conditions in a consistent way (Fig. 3).
AIM-Trend model is built as a simple econometric model and written in ATPL (AIM
Trend Program Language) using VBA in Microsoft Excel. The user can change the
model structure and make sensitivity analysis.
Fig. 3 Concept of AIM-Trend Model
4.1
Structure of AIM-Trend Model
AIM-Trend model is an econometric model to project economy, energy, and
environment situation in middle-term future. It calculates the relationships between
each parameter by regression method and extrapolates those relationships for the
future projection. It makes simulations of energy supply and demand, GHGs emissions
and water supply and demand by setting basic data –population GDP, GDP per capita,
GDP share and so on– as driving forces (Fig. 4). In this paper the module of energy
supply and demand is mainly focused.
5
Energy Supply and Demand
Population
Economic Parameter
GHGs Emissions
Driving
Forces
Water Supply and Demand
Fig. 4 Model Structure
Model Region:
This model covers 42 countries in Asia-Pacific region. They are divided into two
categories: Model A and Model B (Table 3). Model A uses detailed energy data, IEA
energy balance data. Model B uses less detailed energy data, UN energy data. The
countries are grouped in four categories: OECD (OECD members in 1990), CPA
(Centrally Planned Economy Asia), OAP (Other Asia-Pacific), and CA (Centrally Asia)
Table 3
Tentative Model Countries (left: Model A, right: Model B)
Code
AUS
JPN
NZL
CHN
PRK
VNM
BGD
IDN
IND
KOR
LKA
MMR
MYS
NPL
PAK
PHL
SGP
THA
TWN
IRN
KAZ
KGZ
TJK
TKM
UZB
Country
Australia
Japan
New Zealand
China
Korea,Dem
Vietnam
Bangladesh
Indonesia
India
Korea,Rep
Sri Lanka
Myanmar
Malaysia
Nepal
Pakistan
Philippines
Singapore
Thailand
Taiwan
Iran
Kazakhstan
Kyrgyz Republic
Tajikistan
Turkmenistan
Uzbekistan
Group
OECD
OECD
OECD
CPA
CPA
CPA
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
OAP
CA
CA
CA
CA
CA
CA
Code
Country
Group
MNG
Mongolia
CPA
BTN
Bhutan
OAP
BRN
Brunei
OAP
FJI
Fiji
OAP
KHM
Cambodia
OAP
KIR
Kiribati
OAP
LAO
Lao
OAP
MDV
Maldives
OAP
NRU
Nauru
OAP
PLW
Palau
OAP
PNG Papua New Guinea OAP
PYF French Polynesia OAP
TON
Tonga
OAP
VUT
Vanuatu
OAP
WSM
Samoa
OAP
SLB
Solomon Islands
OAP
AFG
Afghanistan
CA
6
Simulation Period:
The “Rio+10” summit will be held in South Africa at 2002. The target year is set as 2032
when is 30years after that summit.
Index:

Population: population, rate of urbanization

Economy: GDP (growth rate, per capita), GDP share (agriculture, industry, service,
PFC (private final consumption), car holders

Energy: primary energy supply by fuel, final energy demand by fuel and sector,
energy plant, economic intensity, carbon intensity

Environment: GHGs (CO2, SOx, NOx, CH4, N2O, CO)

Water: withdrawal, consumption (agriculture, industry, domestic), population in
water stress*

Food and Agriculture*: average daily consumption, vegetable food consumption,
animal food consumption, fraction of meat from feedlots, fish production, crop
production, feed production, nitrogen fertilizer consumption

Land use*: crop land, irrigated cropland, potential cultivable land, mature forest,
growing forest, pasture, protected, other land

Human Health*: SPM (PM10, PM2.5)

Biodiversity*: species, degree of threat to biological diversity, area of habitat
remaining
(Note: sign “*” means the element under consideration)
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4.2
Model Run and Results
Through a series of model calculation for each country, following preliminary
results are obtained.
Po p u la tio n ( M ill.)
G D P ( B i l l .U S $ )
1600
8000
1400
7000
1200
6000
1000
5000
800
4000
600
3000
400
2000
200
1000
0
1970
0
1980
1990
2000
2010
2020
2030
2040
1970
1980
1990
G D P/C PT ( 1 0 0 0 U S $ )
2000
2010
2020
2030
2040
T PES ,T F C ( M to e )
6
2000
5
1500
4
1000
3
500
2
1
0
1970
1980
1990
2000
2010
2020
2030
2040
0
1970
1980
1990
2000
2010
2020
2030
2040
T PES
Ele c tr ic ity ( M T O E)
C O 2 E m i s s i o n ( M t- C )
450
1800
400
1600
350
1400
300
1200
250
1000
200
800
150
600
100
400
50
200
0
0
1970
TFC
1980
1990
2000
2010
2020
2030
1970
2040
1980
1990
2000
2010
2020
2030
2040
S O 2 Em is s io n ( G g - S O 2 )
N O x Em is s o n ( G g - N O x )
20
40
18
35
16
30
14
25
12
20
10
8
15
6
10
4
5
2
0
0
1970
1980
1990
2000
2010
2020
2030
1970
2040
1980
1990
2000
2010
2020
2030
2040
Fig. 5 Projection of each index for China
Fig. 5 shows the projection of main indicies for China. These results give an
overview of country-level development. A rapid GDP growth drives energy use.
According to increase of total final energy consumption and total primary energy supply,
8
CO2 emission will be about 1.5Gt-C around 2030. On the other hand, SO2 emission will
decrease after 2020 because of economic growth, known as Kuznetz curve.
CO2 emission per capita (Mt-C/cap)
20
18
16
14
12
10
8
6
4
2
Br unei
Si n gapor e
Naur u
Kor ea, Rep
Tai wan
Aus t r al i a
J apan
Pal a u
Thai l and
Mo ngol i a
NewZeal a nd
Chi na
Mal ays i a
Pol ynes i a
I ndi a
Vi et Nam
I ndo nes i a
Ton ga
Mal di ves
Fi j i
S amoa
Nepa l
Bang l ades h
Sr i Lanka
My anmar
Ki r i ba t i
Vanua t u
Sol omon I s l and s
Lao
Cambodi a
2032
Bhut an
202 5
Year
Pa puaNe wGui n ea
2015
Paki s t an
200 5
Phi l i ppi ne s
1995
Kor e a, Dem
0
Country
Fig. 6 Projection of CO2 emission per capita for each country
Fig. 6 shows the projection of CO2 emission per capita for each country. This figure
gives a comparative view of an index by country and by year. This is one of the effective
ways to show the results.
9
1500
1000
500
2035
2030
2025
2015
2020
2035
2030
2025
2020
2015
3500
3000
OECD.CO2
CPA.CO2
OAP.CO2
CA.CO2
2500
2000
1500
1000
500
2035
2030
2025
2020
2015
2010
2005
2000
1995
1990
2035
2030
2025
2020
2015
2010
2005
2000
1995
0
1990
0
CO2 Emissions (Mt-C/yr)
2000
2010
0
4000
OECD.CO2
CPA.CO2
OAP.CO2
CA.CO2
2010
1000
4500
2500
2005
2000
4000
3000
OECD.TPS
CPA.TPS
OAP.TPS
CA.TPS
3000
4500
3500
2000
4000
2005
2035
2030
2025
2020
2015
2010
2005
0
1995
1990
1000
5000
2000
2000
6000
1990
3000
OECD.GDP
CPA.GDP
OAP.GDP
CA.GDP
1995
GDP (Bil.$/yr)
Total Primary Energy Supply (MTOE/yr)
4000
2000
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
2035
2030
2025
2020
2015
2010
2005
2000
1995
1990
OECD.TPS
CPA.TPS
OAP.TPS
CA.TPS
5000
1990
Total Primary Energy Supply (MTOE/yr)
CO2 Emissions (Mt-C/yr)
OECD.GDP
CPA.GDP
OAP.GDP
CA.GDP
6000
1995
GDP (Bil.$/yr)
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Fig. 7 Projection of GDP, total primary energy supply, and CO2 emission for Model A regions
(left: reference scenario, right: high economic growth scenario)
Fig. 7 shows the projection of regional aggregated results of GDP, total primary
energy supply, and CO2 emission for reference scenario and high economic growth
scenario. These results show the trend of regions and make it easy to compare with
projections of other studies (e.g. IEA; World Energy Outlook, DOE/EIA; International
Energy Outlook, APERC; Supplement to APEC Energy Demand and Supply Outlook,
IPCC; SRES, and so on).
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Conventional
2032
Policy
1995
gC/m2/year
0
5
10 100 1000
2032
Fig. 8 Trajectory of CO2 emission intensity for each scenario
m3/ha/year
2000
0
5 50 500 5000
Agricultural water withdraw intensity at Thailand in 1990
m3/ha/year
2000
0
5 50 500 5000
Agricultural water withdraw intensity at Thailand in 2030
Fig. 9 Trajectory of agricultural water withdraw intensity at Thailand
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Fig. 8 shows the trajectory of CO2 emission intensity for each scenario. Fig. 9 shows
the trajectory of agricultural water withdraw intensity at Thailand. These give
geographical views of each index.
4.3
Preparation for future work
“AIM-Trend model” for assessing the future environmental burdens based on the
past socio-economic trends and future scenarios, has been built. By using this model,
the environmental trends until 2032 in the Asia-Pacific countries can be estimated.
The role of this model is to enhance discussions about country-level projection as a
communication platform between policymakers and researchers.
For this purpose, this model was built as a simple econometric model and written in
VBA in Microsoft Excel. The user can change the model structure and make sensitivity
analysis.
Through a series of model calculation for each country, preliminary results were
obtained for economy, energy, and environment for each country.
Further communications with policymakers and researchers are necessary to grasp
the situation of each country and collect data. It is also important to develop the CGE
type model that explains the relationship between countries comprehensively to support
this country-level econometric model.
5
Concluding remarks
Even though our modeling work for the Asia-Pacific Environmental Innovation
Strategy Project (APIS) has started in this April, the fundamental module of AIM/trend
model has already developed. This module will be distributed to individual countries,
and it will be used as major tool for interactive communication with each country to
identify urgent demands of innovation introduction for sustainable development.
Furthermore, other detailed model such as AIM/emission and AIM/material has already
started to be applied to developing countries for policy assessment of innovation
strategies. However, communication to develop the AIM/ecosystem has been continuing
with experts in the region in order to clarify the interface between innovation
introduction and ecosystem conservation. Recent discussion on ecosystem modeling has
been focusing on the tradeoffs between pollutant/GHG emission reductions and
ecosystem conservation in order to identify innovation strategy to integrate
pollution/climate policies and nature conservation policies.
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